Services Provided by Contract Manufacturing Service Provider
Contract manufacturing service provider typically work with customers in a wide range of industries with difference requirement and expectation. It offer a series of services, ranging from proof of concept and prototyping, global sourcing and purchasing, inventory control, wire harness, sub-assembly, and final assembly, panel wiring, modules integration testing, product packaging, product support, updating of drawing and bill of material (BOM) and many more.
Definition of Inventory Method
In some applications, the contract manufacturing service provider simply assembles the wire harness and then ships the wire harness to the customer. In other applications, the contract manufacturer will assemble the complete equipment, set the operational parameters, load software into memory, test the equipment, and update documentation and pack the equipment into a finished product that is shipped to the customer.
Some customers may choose to to provide all of the materials, such as cable and connectors, electronic and electrical components, controller, mechanical structure and fabricated parts and etc. that are required for the job. And the contract manufacturing company assemblies all parts together, performs any required testing, and ships the finished product to the customer. Such arrangement is generally considered as inventory provided on a consignment basis where the contract manufacturing service provider basically provides labor and expertise only.
Other customers may choose to provide a portion of the materials required, such as specialty or high cost controller, proprietary parts such as custom build printed circuit boards, etc. and rely on the contract manufacturing service provider to purchase the remainder of the components needed to assemble the equipment
Most contract manufacturing service providers prefer to use their own sourcing and purchasing expertise through their extensive contacts inventory where applicable to provide all of the required materials as per customer’s particular project BOM list. This method is generally considered as inventory provided on a turn-key basis.
Contract Manufacturing Price Estimation
But before any of this can happen, the contract manufacturing service provider must provide a pricing estimate to the customer for the project. Other than the quantity commitments, production schedule, annual usage quantity, and quantity per order, this pricing process also requires a detailed BOM list and drawing from the customer. The BOM should define all of the components required along with the approved vendor and vendor’s part number for each component. This information allows the contract manufacturing service provider to determine material availability, minimum order quantity (MOQ), packaging size, lead time, cost for each component based on the quantities and vendor information and etc. The BOM also provide information (when match with drawing) to allow a technical review to determine the amount of labor and tooling required to manufactured and assembled each parts together to form the final product.
The assembly and detail drawings provide the contract manufacturing service provider with the information they need in order to develop a manufacturing plan including manpower allocation, shop floor arrangement, material and end product holding area, acquire necessary tooling and etc.
Although it may appear to be a lots of information , but it allow the contract manufacturing service provider to provide the most cost effective pricing for the finished product and avoid future dispute over the deliverable.
Summary:
Necessary information for a contract manufacturer to prepare an accurate quotation for a typical manufacturing project includes:-
Definition of contract manufacturer scope of supply, inventory responsibility (consignment, partial consignment, or turn-key), specific skillset requirement, provision of special tools and /or machine.
Complete set of production drawing with specific production procedure if there is any.
Complete Quality Control and Test specification and procedure.
Estimated annual usage, production schedule, minimum order quantity (MOQ) and forecast.
Provide Golden unit and/or prototype for review. Photos of sub-assembly and final product will be useful as well
