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What You Need to Know When Choosing a Contract Manufacturer

Embarking on a new product idea is exciting, but once you have your idea, you might not know the best way to make it into a reality. Whether you’re looking to make a prototype, or you’re ready to put your idea into production, hiring a contract manufacturer can be a great way to turn your idea into a physical product.

A contract manufacturer (CM) is a company that will use your designs to make your product on your behalf. There are many different types of contract manufacturers, with many different specialties. No matter what you need, there’s a contract manufacturer out there who can help. 

This guide will help you choose the right contract manufacturer to create the best version of your product.

1) Consider the Contract Manufacturer’s Threshold

The EMS (Electronics Manufacturing Services) industry is commonly broken up into different tiers depending on the threshold of work that they typically provide. Some contract manufacturers specialize in low volume, some are mid-range and others specialize in high production runs. A higher-level tier may only work with people or companies who are ready to manufacturer at a higher scale and dollar amount, and not an individual only interested in building a few prototypes.

If you’re producing a large volume, be sure to shop around with different manufacturers to ensure you’re getting a reasonable price. Consider the CM’s location, as well as the time commitment of looking at multiple manufacturers when dealing with a smaller production run.

2) Do Your Research and Visit the CM if You Can

If you are able to visit a CM in person, it might save you future headaches later on. Any CM you work with should welcome a visit, and if they don’t, it may be a red flag. Seeing firsthand how the CM operates can be a good indicator of how your production process will turn out in the long run.

As with all business partnerships, good communication is key. Here are some questions you should be asking as you review CMs:

What types of machines do they have and what manufacturing techniques do they implement?
Get a thorough understanding of how your product will get made. What capabilities do they have? How fast will they be able to produce your product?
Sometimes a CM will have to outsource parts of production. Make sure that the CM is upfront with you if they’ll be outsourcing any part of your production run, so you can have full transparency into how your product will be made. 

Does the manufacturer have the accreditation you need?
Different industries and countries might require different accreditations. Medical devices, food and drug consumer items, industrial or harsh environments are just a handful of the products that could require accreditations from the manufacturing facility. Some examples of common accreditations include the ISO 9001 for quality management and the ISO 13485 which is needed in the medical industry.
Make sure you understand the accreditation requirements for all the markets you hope to serve. Medical devices in particular are heavily regulated, so plan accordingly to ensure your product can be sold into different markets.  

Are they following health and safety codes?
Unfortunately, not every CM follows best practices when it comes to health and safety. Visiting a CM in person will help you get a sense of their practices, their machinery and how they treat their workers. 

Can they assemble and/or package your product for you?
Some CMs will assemble portions of your product, and some may be able to take your electronics, mechanical elements and plastics and put them all together along with finalized product packaging.
It’s obviously simpler to find a CM that can send you a product that’s ready to be stocked on the shelf, but that convenience comes at a cost. If you want to save money, you can project-manage the run yourself by finding multiple CMs to create all the different parts and assemblies you need. 

Do you need to provide your own parts?
Not all CMs can provide every material you need to make a finished product, especially if your product requires an uncommon part.  A detailed Bill of Materials (BOM) will help you communicate your needs with the CM and find out if you need to source items yourself. Arrow’s Online BOM tool is a great way to get started with putting your BOM together. 

Can you do a trial run?
Start small. Order a small quantity of your product to ensure the quality is up to par before you commit to a larger production run. This will allow you to test your boards more inexpensively and easily to ensure they’re working as expected and that your specs are being met. You can also see if the CM does in-house testing, but we advise you to test your product yourself before making a large order.
Another low-volume option is to leverage a shop that specializes in quick-turn prototyping, or on-demand manufacturing. This is a great option to receive high quality prototypes quickly, so you don’t lose time getting to market.

Is the price too good to be true?
There are some online CMs where you can upload your engineering docs, and they’ll mail you a product. An on-site visit is usually out of the question here. A lot of online CMs tout exceptionally low costs but can end up delivering lower quality. Boards produced by these CMs often fail and communication with the CM can be lacking. We advise using them for nothing more than a proof of concept, if at all. 

Have you had a qualified engineer vet your CM?
It is a good idea to have a qualified engineer help you review any CM before you begin working with them. An engineer will be on the lookout to make sure the CM can deliver on its promises and meet all your needs. Entrepreneurs that are part of the Arrow Certification Program can enlist an Arrow engineer to set up time with your CM to go over their capabilities and help vet them for you. 

3) Understand the Pros and Cons of Going Abroad

Manufacturing overseas could save you money in the short term, but consider whether it’s the right choice for you in the long run. Before you decide whether to do your production locally or to take your show on the road, here are some areas where issues might come up.

Transparency.
Communicating with your CM will be more difficult if you must overcome time differences and language barriers. Add that to the fact that it’ll be difficult to visit the facility on a regular basis, and you might find yourself lacking transparency around your product manufacturing.

Shipping.
Tariffs and international shipping fees might take a big bite out of any savings you’d enjoy from manufacturing internationally.

Accreditation.
It’s important to consider where your manufacturer is in relation to your market. Make sure you won’t run into any accreditation issues if you’re using a CM that doesn’t usually manufacture for your target market. 

Volume.
Be sure to balance cost savings with the size of your project. Don’t go abroad for a small project or to make a prototype, since it’s more important to focus on building a relationship with your CM than it is to save a nominal amount. Even if your target market is ultimately in a different country, it can still be beneficial to do your prototyping locally before embarking on a larger production run. 

4) Ask the Experts

You’re not going to be able to anticipate every issue that might come up with a CM, and that’s okay! Checking in with engineering and manufacturing experts as you go can save you a lot of work down the road, as any issues you have with manufacturing will only delay your product and upset your backers. No matter how awesome your prototype might be, if you haven’t done your research, you could start eating away at your margins before you know it. Experts can help you get more detail on things like sourcing components, understanding tariffs, labor and manufacturing costs and more. 

That’s why entrepreneurs have free access to the Arrow Certification Program. The Arrow Certification Program is a partnership between Arrow and Indiegogo that gives entrepreneurs the necessary tools and services to bring their product ideas to life. Participants in the program can get assistance from Arrow engineers on any stage of their product development, from design to prototyping, to materials sourcing and manufacturing processes. If you’re an entrepreneur building a tech product, join the Arrow Certification Program today.

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