Electronics contract manufacturing is not suitable for every type of electronics product in the marketplace today. However, for electronics company products, where suitability for outsourcing manufacturing to a qualified contract manufacturer exists, companies can immediately save 10% to 15% off their internal costs of producing their products.
Changes in product and component lead times can have adverse impacts on a company’s product launch and supply chain into the marketplace.
It’s in an organization’s best interest to manage the flow of materials into the manufacturing center so that finished good inventory (FGI) can be built-up to meet end market demands.
Product and component long lead time management reports by the contract manufacturer will contribute to helping make sure the original equipment manufacturer OEM services have a better chance of meeting scheduling and shipping requirements.
Typically, contract manufacturers will purchase specified quantities of long lead time material and OEM customer-unique materials only when the OEM customer authorizes such in advance and in writing.
Meanwhile, it is reasonable for the OEM customer to ask the contract manufacturer to compile, and maintain, a lead time report concerning product and component long lead time management (and provide an updated version of the report to the customer on a monthly basis to reflect the OEM’s most current requirements)
An example of some of the information a contract manufacturer’s product and component long lead time materials report to be submitted to the OEM customer may include:
Lead time period
Product or component manufacturer name
Manufacturer part number
Quantity required per unit of product
OEM customer part number
Contract manufacturer’s part number
Where the part is used (i.e., location on printed circuit board (PCB))
Purchase quantity authorized by OEM customer
Purchase price authorized by OEM customer