For OEMs, deciding whether they do everything in-house or not is a determining factor in how they structure their supply and distribution chains, and how they manage their costs. In some cases, companies prefer to outsource a part of their production process, while others go fully in-house or exclusively outsourced.
Whether one of these solutions is good for you or not depends on your needs and what you want to prioritize. We will go through the pros and cons of each of the two options: in-house electronic manufacturing and outsourcing.
Pros of Outsourcing Electronic Manufacturing
Whether you outsource part of your electronics manufacturing or all of it, you save money on fixed costs such as location, equipment, workforce, and maintenance. This gives you a bigger budget for investments in other areas of your business.
By passing manufacturing tasks to a third-party provider, you will need a smaller number of workers, reducing labor expenses. Outsourced electronics manufacturers typically have their manufacturing facilities built and ready for production, with projected lead times available.
Outsourced electronics manufacturers can provide even more distinct advantages to you such as:
- Elastic capacity: you only pay for what you use
- Pass-through best practices: they are working with the latest technology and techniques
- Cross-industry expertise: leveraging their deep product experience gives them the unique ability to solve nearly any problem.
Those are a few key benefits of partnering with an outsourced electronics manufacturer.
Cons of Outsourcing Electronic Manufacturing
In some cases, outsourcing can put you at a disadvantage. If your product or service is centered on something you have innovated or has a unique set of characteristics compared to your competition, you will want to keep it in-house.
Outsourcing your production can also mean that you will have to comply with your partner’s schedule, regulations, and policies. By discussing every detail before you sign an outsourcing contract, however, you should be able to avoid most issues.
Pros of In-House Electronic Manufacturing
In-house production gives you total control over the final result, distribution process, and workflow. If you own a unique concept and know-how, hiring an outsourcing contractor can be risky, as many of them comply with relaxed copyright laws (especially when you decide to take it to an international company).
Another advantage of handling manufacturing yourself is the flexibility it provides. You will be able to control when you make more items, how many will be needed and have them ready for the next step in the production process. However, flexibility can also be gained by working with a manufacturer, as long as you choose the right one for the job.
Cons of In-House Electronic Manufacturing
If your company aims to manufacture a large volume of products, outsourcing is probably more cost-effective. You will have to calculate your needs based on realistic expectations and anticipated demand rates to see if you would be able to make a decent profit when keeping production in-house.
What’s The Right Choice?
Whether you should outsource your electronic manufacturing processes or keep them in-house depends on the implications for your business. Ask yourself if your technology or concept needs to be kept a secret, if keeping all the processes within your company is too costly, and how easy it would be to collaborate with an outsourcing company.
Is Outsourcing For You?
At Amtech, we specialize in electronics manufacturing services and work with a large portfolio of clients who trust our processes and high-quality products. With many years of experience in electronics assemblies such as printed circuit board assemblies, we help many manufacturing companies with the electronics components of their products.
Before working together, we always discuss your needs in detail and help you decide how much of your production should be outsourced to maximize cost savings and production efficiencies. We back all of our proposals with reliable estimates and cost strategies, so that you can trust that your business is in good hands when working with us.
Contact us to find out more and discuss whether we are a good fit for your business.