How to Select Contract Manufacturing Services
Image Credit: AEM-LLC Advanced Electronic Manufacturing
Contract manufacturing services provide parts and equipment on behalf of original equipment manufacturers (OEMs). The design and brand name remain the property of the OEM. Contract manufacturing may involve a complete range of services from design and prototyping to final production, assembly, and quality assurance for complete products. Contract manufacturing services may also involve component contract fabrication manufacturing, in which the contract manufacture produces only a component or sub-assembly.
Selection Criteria
When selecting a contract manufacturer there are several things to consider including capabilities, industry expertise and certifications. The type of contract manufacturing services required depends on the industry. Contract manufacturing services are used in many industries including aerospace, automotive, building and construction, electronics, marine, medical or health care, and pharmaceutical, among others.
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Aerospace / Automotive - Automotive and aerospace industries outsource system components so that they can concentrate on the design and development of new products and assembly operations.
- Electronics - Contract electronics manufacturing providers may offer prototypes, board production, or full box build. Some contract electronics manufacturing services involve the use of contract manufacturing software.
- Pharmaceutical - Pharmaceutical companies outsource chemical manufacturing, material processing, formulation, compounding and packaging of pharmaceuticals.
Certifications
Certifications and approvals for contract manufacturing services include AS 9100, ISO 9001, ISO 13485: 2003, ISO 14001, ISO 16949:2002, FDA registration, IPC certification, and others. Contract manufacturers who choose to uphold these standards are reviewed periodically and tested in order to meet the current requirements for any specific certification.
- AS 9100 is an expanded, international version of AS 9000, a standard which defines quality system requirements for suppliers to the aerospace industry.
- ISO 9001 establishes requirements for company quality management systems. Standards range from manufacturing to services such as design, development, production, and installation.
- ISO 13485:2003 specifies quality management system (QMS) requirements for organizations that need to demonstrate their ability to provide medical devices and related services.
- ISO/TS 16949:2002 is an ISO Technical Specification that aligns existing American (QS-9000), German (VDA6.1), French (EAQF) and Italian (AVSQ) automotive quality systems standards for the global automotive industry.
Depending on your industry or application, certification can be an important factor when outsourcing your production department.
Benefits vs. Risks
Contract manufacturers provide goods on the behalf of original equipment manufacturers through a written contract. Almost any products or service completed "in-house" can be outsourced. Outsourcing your production department to a contract manufacturer can help your company focus on its core competencies, but it can also work against you.
Image Credit: Industrial Quick Search, Inc.
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Benefits |
Risks |
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Economical |
Communication / Language Barriers |
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Product Availability |
Lack of Flexibility |
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Increased Resources |
Lack of Control |
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Quality Control |
Intellectual Property Loss |
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Product Standards / Certifications |
Competition with Other OEM's |
Resources
wiseGEEK - What is Contract Manufacturing
Venture Outsource - Contract Manufacturing Risk Mitigation and Risk Management
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