Page 18


www.us- tech.com


December, 2011 ElEctronic Mfg SErvicES Seven Steps to Off-Shore EMS By Tim Tsui, International Production Manager, ACD, Richardson, TX W


hether you are an OEM or a domestic EMS provider, one inescapable truth faces us:


off-shore assembly is now a part of today’s business plans. We might not like to hear it or read it, but it is a fact of life today. Any company needs lower costs and larger margins if it is to succeed. This is how today’s econo- my works. Domestic EMS providers are


pulled in many directions by their customers. The customers are always seeking lower cost and different options to reduce cost. Having a both domestic offshore EMS partners means that an OEM as well as EMS providers can find a low-cost manu- facturing option that works. It also allows for redundancy, backup in case of production issues, and allows the domestic EMS to mix and match assembly and pricing. Domestic EMS companies also can concentrate on projects that would provide more or higher revenue. The question is, at what point


do we start moving manufacturing and technology beyond U.S. borders? At what point does maintaining “Made in U.S.A.” operations become an impediment to the success of a company?


Third, define your requirements up front. Do not wait until business starts and product is being assem- bled. This will prevent issues like the assembly does not meet specification, the product was assembled incorrect- ly or the component parts were swapped, etc. This up-front defining will allevi-


ate confusion, queries, concerns and headaches — unless you like getting calls at 2 a.m., every day, every week, every month, etc. Define which speci- fications need to be met, especially the customer’s, how to assemble the prod- uct, how to inspect and test the unit, and what is required for shipment. The idea here is to prevent holdups and line stoppages. Defining the requirements will


AOI is just part of the mix; any off-shore manufacturing


partner must be able to provide the same kind of expertise and QC as the domestic operation.


To make the decision to transfer


this wealth of knowledge, the produc- tion line, and possibly the company’s future existence, there are some gen- eral steps that should be taken before throwing the switch.


First, define the reason or reasons and establish the philosophy for


going off-shore. This will make it eas- ier to explain “why” to your internal personnel; understand if this is a cost reason or a customer demand; and define exactly how this is to be achieved — establishing a partner- ship with a source, or moving the tasks off-shore and setting up a sub- sidiary there, or purchasing a compa- ny. Whatever the reasons and philos- ophy, always communicate, act with integrity and — above all — be hon- est. The majority of failures occur because the OEM or the domestic EMS and the source were not honest with each other. Do not be bashful about how you want things or how things should be, but also do not be obstinate. Business is always a two- way street and the saying “I’ll scratch your back if you scratch mine,” is the way it’s done.


Due Diligence Needed


Second, know thy source. Do not link up with a source because of a relationship or a recommendation. Visit the place, walk the site and meet with the company. This is the only possible way to get to know the source and its resources. Also, build- ing a personal bond with key people in the source organization will defi- nitely provide an advantage. This way you know who to contact when you need to. Performing a search and due diligence, will go a long way toward selecting the correct off-shore source for your company. Spend the time and money to


meet with the source. Ensure they have the capability, technology and capacity during your meeting or visit. Make sure the source wants to do business and it fits your compa- ny’s needs. It does not make sense to partner with a high-volume shop when you cannot offer high volume. It does not make sense to partner with a high-tech shop if you have simple SMT devices with through- holes.


explain exactly what the company wants and what the source needs to abide by. It also will determine if the source can meet those requirements. This way, there will be no questions later, and it will reduce any confu- sion. Simply informing the source to abide by the specification will end a lot of issues, queries and misunder- standings. Please note that defining the raw materials sources is critical. The raw


Transferring manufactur-


ing off-shore is not an easy task. It requires being


detailed, being proactive and being patient. It


requires due diligence and a lot of communications.


materials must be stable in design as well as quality. Some incoming inspec- tion may be re quired, but for the most part en sure that the raw materials are stable and the material sources are reliable, consistent, and provide quali- ty materials.


RMAs in the Mix It’s important to ensure that


there is a robust RMA (Return Material Authorization) procedure. It will speed things along when issues arise at a customer’s site or in the field. This is needed to ensure that this part of the business is transparent to the transfer. When addressing assembly-related issues, quick, precise analysis and resolu- tion are required. In most instances the return


will be addressed by the assembler with guidance from the OEM or domestic EMS. If the return is accepted, the assembly site will issue an RMA. The suspect lot will be returned and the site will provide resolution. However,


Fourth, selecting the transfer team Continued on next page


in certain


instances the OEM or the domestic EMS may perform the rework if time is of the essence.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84