Looking to outsource low volume, highly complex equipment or mechanical assemblies? CM is still alive and well within the US, if you know where to look. But what exactly should an OEM look for when outsourcing their product within the US?
While some OEMs can afford to manufacture their product using just any local CNC Machining or Assembly house, others require a more sophisticated Contract Manufacturer to manage their needs. Industries such as Defense, Medical, Semiconductor and Energy all have unique requirements that determine how the entire manufacturing and Quality process MUST be handled. To adapt to these exceptional needs, a great CM will have a series of robust systems in place–while also continually striving towards operational improvements internally–to manage any unique requirements set forth by the OEM, as the customers’ products flow through each stage within the manufacturing process.
The best way to know if the CM is the best fit for your unique needs? Take a tour through the facility, and you’ll be sure to see the stark contrasts between a high-end CM and its more basic counterpart.
Manufacturing and engineering production teams
Once you’ve entered a high-end manufacturing plant, you’ll be sure to see an array of teams collaboratively working together as they ensure that each project makes it to its completion seamlessly. The transition of turning the product from raw materials into finished goods will visually appear to move smoothly and logically.
When looking for a great CM, you’ll clearly see technicians on the floor producing parts, inspection personnel in the QA department, engineering teams for routing and optimizing the process, and finally assembly workers and supervisors ensuring that the product is assembled correctly. Look a bit deeper, and you’ll see manufacturing managers, industrial process engineers, test personnel, purchasing and production supervisors acting as the glue to manage and monitor Quality, Delivery and Cost.
A CM needs to constantly adapt to the changes within the industry. If you’re looking to outsource to a CM, then you’ll need the reassurance that your product will be produced as efficiently as possible. Make sure that the CM is incorporating lean practices, six sigma, TOC and other methods which will increase both profitability and marketability for new customers like you. The management team should actively pursue these efforts and lead the other employees to understand the benefits of implementing continuous improvement efforts in a company-wide effort.
Extensive In-House Capabilities
Great Contract Manufacturers all share a common theme: Vertically Integrated Business Models. This is what sets contract manufacturers apart from contract assemblers. A great CM should have the capabilities to manufacture approximately 50% or more of the value-add within the final product.
For example: if an OEM’s product is a piece of high tech machinery or equipment, then the CM should have the capability to produce the following:
- CNC Machine parts
- Sheet metal
- Welded frames
- Electrical wiring
- Clean room
- Assembly & Testing
Each part is critical to the OEM’s final product and avoiding potential issues from outside vendors is a great way to avoid Quality and Delivery issues. Don’t miss out on your important deadlines as an OEM just because the CM you hired heavily relies on outside vendors. Be sure to ask which manufacturing services are provided in-house when touring your next CM facility.
Top Down Management Commitment
The key to a highly successful CM is a management team that is 100% committed to their process and people. Visibility and KPIs are managed at the highest level to ensure to ensure each individual customer requirement is aligned with the operational capabilities. An agile Program Management that is empowered in their ability to move product through the facility with the manufacturing team as efficiently as possible is a very important asset.
These managers are the tactical advantage for CEOs and VPs above them, and by aligning the roles and responsibilities of these management members, communication is quick and effective. You, as the customer, will benefit in building these personalized relationships with key internal personnel.
Highly Trained Workforce
It is imperative to remember that manufacturing companies within the US have taken a difficult hit over the past 20 years. However, there is an enormous advantage for OEMS that select a CM consisting of a highly trained and nurtured workforce. The manufacturing skills needed to execute an OEM’s unique needs do not happen overnight and take years to cultivate.
If the CM has a history of training and retaining their internal labor, you can be sure that the internal labor will be ready and able to handle your project from its onset. Unfortunately, this may be difficult to see when on a tour of the facility but will be immediately felt when the manufacturing tasks become “tough.” A supplier that is prepared and has invested in its employees is a supplier that will be successful.
Quality and Process Controls
Great CM’s don’t just operate by the seat of their pants. They have years of experience from which to learn and utilize their successes and failures to create new and improved systems. When looking at the landscape of Contract Manufacturing firms you’ll find an extremely wide range of capabilities and process controls, and then an even larger range of Quality and Delivery scores from their customers. These Quality and Process Control systems help in managing new, complex and unique programs based on the customers’ needs. By wrapping a complex product in the arms of a robust Quality System, great products will be built from the ground up repeatably and reliably. As an OEM, you know this type of reliable system is what sets apart a great CM from one that is not quite yet up to par.
Not all contract manufacturing companies are created equally. By touring the facilities of a few good candidates, and using this list above, you will easily be able to differentiate which company is best fit to handle your unique requirements and needs as a customer. If the CM is continually striving to improve their business, you’ll be sure to trust that the CM of your choosing will be able to produce a product for you as efficiently, timely and seamlessly as possible.
If you are interested in learning more download our manufacturing Insights E-Guide.