Five Ways to Reduce Electronic Manufacturing Costs

2021-04-15 11:57 - MADES

We have seen instances of entrepreneurs underestimating the cost of developing, scaling and manufacturing an electronic product. Ultimately, their businesses suffer or even fail. If you are reading this article and are in electronic business, you definitely don’t want to be part of this statistics. In your search for the best way to reduce electronic manufacturing costs, you may already have searched an EMS partner in the traditional low cost regions. You don’t have to go to extreme lengths or compromise product quality to save money in manufacturing.


Getting good Quality and Affordable Electronic Manufacturing Service (EMS)

You should search for the Best Value option, not always the cheapest or the most expensive ones. But you can get quality affordably, if you apply the right strategy. For instance, you can get EMS provider that is capable of providing a wide range of services. Bundling pricing is preferable because it lowers manufacturing costs. The best and most affordable EMS companies often offer secondary services, such as industrialization, full box build and functional testing, environmental screening or distribution under such arrangements. You can also get really experienced companies, like MADES, with proven international projects.

Fig 1: MADES, offering a mixture of quality, experience and affordability


1. Apply Lean Manufacturing Methods

It can be challenging to achieve cost reduction all at once, but that doesn’t mean you should not try at all. In this regard, you have the option of trying a lean manufacturing approach, whereby continuous improvement takes centre-stage. Companies are using several tools, including the popular Six Sigma or Kaizen principles. For more than twenty years MADES has been using its rigorous Six Sigma programme as a means of achieving ever-higher levels of value for our clients.


2. Minimize and/or Alter Materials Used 

Materials is usually the first cost driver in every electronic product. Some electronic components can be extremely expensive. Yet, you can take care of this aspect by managing the volume of purchasing, lot deliveries, alternative parts, material excess and through specific long term agreements with your EMS partner. If there is a way to economize on material, please do it. Discuss openly with your supplier as there are different proven ways to reduce these materials costs.


3. Use Latest Technology 

Advance in technology and affordability of manufactured products or components go hand in hand. The most obvious impact is reduction or elimination of manufacturing errors. Since any fault in a product is the provider’s liability, having technology does go a long way in enhancing business profitability. Modern technology is also an enabler of manufacturing outsourcing. Internet helps companies outsource some manufacturing work to reputable contractors such as MADES and save lots of money.


4. Parting Shot

The search for cheaper and higher quality electronic systems manufacturing is an ongoing process, whether a company is doing it domestically or outsourcing. As you look to enhance manufacturing capacity, increase efficiency and reduce electronic manufacturing costs, outsourcing may eventually be your solution. MADES is ready to listen to you and act. With a proven track record on short-time transitioning from incumbent’s or Customer’s in-house manufacturing to full production, MADES is definitely your place to look. Call our experts for prompt liaison today.


5. Long Term Agreements

Many of the associated costs to managing a project can be minimized if there is a Frame Agreement in place between Customer and Vendor. These terms can not only fix the costs for several years, but also provides the right environment to grow the relationship, for the supplier to invest in the project and to jointly identify future cost reductions and risk mitigation efforts. Customers and Vendors can focus on growing the business better than pure price negotiations every several months.

MADES has several Long Term Agreements in place with its customers in markets as different as Aerospace, Defense, Industrial or Automotive. Some of them were started more than 10 years ago and still remain valid. The relationships with those customers have also grown up, not only at company level, but also at personal level. That personal trust and confidence in the way of working and when approaching new challenges is of top importance to rest assured.

The Convergence of Traditional and New Space Electronics