How to Complete a Contract Assembly Manufacturing Process: A step-by-step Guide
What is contract assembly?
Contract assembly is a term used to describe the process of outsourcing the assembly part of a manufacturing process to a company that is well-suited to handle the assembly. This method of production is beneficial for a variety of reasons, such as taking advantage of comparative advantage in which a company outsources the manufacturing process that they are least capable of handling profitably to another company; due to the fact that it could be cheaper in some cases; or because the company outsourcing the assembly might have less expertise in that phase of the manufacturing process. Contract assembly services add value to Original Equipment Manufacturers (OEMs) by providing efficient and cost-effective assembly and kitting services. This process can encompass a variety of manufacturing processes, including the manufacture of electronics, machines with intricate parts, and even seemingly innocuous products that simply require the contract assembler to put together a particular item in its final stages.
What you need to start a contract assembly business
1. Business License and Registration
Are you ready to open a contract assembly business? Understanding the business license and registration requirements is an important first step. Here are the steps to follow to get started:
- Check with your local government to verify if any special permits or licenses are needed for your industry and location.
- Contact your Secretary of State’s office to determine if you need to file any paperwork for incorporation or a limited liability company.
- Obtain any special zoning permits or licenses that may be required for a contract assembly business in your area.
- Contact the Internal Revenue Service for an Employer Identification Number (EIN).
- Register with the state for any applicable sales and use taxes.
- Determine if you need to obtain any special business licenses from the state or local government.
- Complete any additional steps required by the state or local government.
By taking the time to complete the necessary steps, you can ensure that your contract assembly business is legally registered and compliant with all applicable regulations.
2. Resources and Skills
To start a contract assembly business, the following resources and skills are necessary:
- Proven track-record with extensive experience in contract assembly, sub-assembly, kitting, and shipping.
- Skilled labor and advanced technology for lean and reliable manufacturing.
- Knowledge of document services and food service industry regulations.
- Financial resources for purchasing necessary materials and equipment.
- Quality control expertise to ensure product safety and consistency.
- Strategic marketing skills to reach potential customers.
- Ability to manage customer relationships and ensure customer satisfaction.
- Business acumen to develop and implement an effective business plan.
3. Supply Chain Partnerships
Partnerships with contract assemblers can help to significantly reduce costs, improve quality and speed up production, while also reducing overhead costs. Through the strategic implementation of certain lean manufacturing tools and methods such as 6S, Total Productive Maintenance (TPM), Rank Order Clustering (ROC), Value Stream Mapping, and Bottleneck Analysis, manufacturers can quickly identify and eliminate waste, while maximizing productivity. These methods can help to reduce labor costs, optimize production processes, and increase the efficiency of equipment and overall production flow. By forming long-term partnerships with trusted contract assemblers, manufacturers can also benefit from reduced lead times, increased control over costs and delivery of products, and improved product quality.
4. Process Knowledge
To start a contract assembly business, one must have a solid understanding of the process involved. This includes knowledge of how to build business logic into the contract itself, such as identifying parts of the contract that may vary from transaction to transaction, incorporating simple variables such as names, dates, and dollar amounts, using computed variables that require calculations, recognizing optional language blocks, and repeating language. Additionally, a contract assembly business requires knowledge of how to build a sophisticated interview that gathers all the necessary information for generating a new version of the contract.
5. Own Manufacturing Systems
- Identify the specific components that need to be outsourced for the contract assembly.
- Research potential manufacturing partners and compare their qualifications and offerings.
- Finalize a contract agreement with the chosen manufacturing partner.
- Implement lean manufacturing tools and methods, such as 6S, Total Productive Maintenance (TPM), Rank Order Clustering (ROC), Value Stream Mapping, and Bottleneck Analysis.
- Set up a Quality Management System (QMS) to ensure consistent high quality product.
- Monitor the production process for any bottlenecks or areas of inefficiency that need to be addressed.
- Implement strategies to reduce overhead costs, such as reducing in-house labor and overhead costs associated with utilities, building maintenance, landscaping, insurance, indirect materials, indirect labor and machine repairs.
- Analyze customer feedback, trends and data to determine any changes needed to optimize production efficiency and product quality.
- Continually review and update contract assembly operations to ensure maximum efficiency.
6. Project Parameters
Project parameters are the specific requirements and expectations that must be met in order to complete a successful contract assembly project. They provide the basis for defining the scope of the project and are essential for determining the success of the project. Project parameters are important for contract assembly businesses because they provide the framework for the entire contract assembly process, from the initial assessment of the project’s feasibility to the product’s completion. It is essential that these parameters are clearly defined and communicated to all parties involved in the project. This ensures that the contract assembly provider can accurately assess the project, allocate resources, and clearly define the expectations and results that are expected of them. Additionally, these parameters provide the basis for providing a fixed-price quote and ensuring that the project is completed within the agreed-upon timeframe and budget. Without defined project parameters, contract assembly businesses would be unable to accurately assess projects, leading to potential delays and increased costs.
7. Expertise and Capabilities
Starting a contract assembly business requires a wide range of expertise and capabilities. These include component sourcing, program management, engine conversion, repair and testing, design, and engineering services. Additionally, single and multi-step contract assembly services, such as mechanical and electrical assembly, surface mount technology (SMT), BGA, micro BGA, through hole manufacturing, hand soldering and coating, as well as visual inspection and functionality and reliability testing must be offered. To meet industry standards, the contract assembly business should be ISO 9001:2015 registered, ITAR registered, RoHS compliant, NADCAP certified and meet Mil-Spec, ANSI, IPC J-STD-001, IPC-A-610 and AS9100D standards. Finally, the business must be able to offer expertise in packaging, design, inspection and engineering, plus be able to handle prototype to production runs and kitting and assembly services that are flexible and scalable.
8. Inventory and Tooling
A contract assembly business requires a variety of items and services in order to be successful. These items include specialized equipment for assembly and testing, quality assurance and inspection services, warehousing and fulfillment services, labeling and packaging, distribution and fulfillment, custom production assembly services, visual inspection and parts sorting services, mechanical design services, product redesign services, CAD and fixture design services, product testing fixtures, rework services, kitting, bagging, disassembly services, and catalogs of goods. Additionally, services such as fixed unit cost assembly, Just-In-Time delivery, vertical and horizontal milling, turning, surface treating, robotic welding, stamping and marking, prototype to specialty production, Lean Manufacturing, Kaizen/5S, CAD/CAM, SolidWorks® files, Mil-Spec, ANSI, AS, SAE, ASME, ASTM, and TS standards are all necessary for a successful contract assembly business. Finally, having Six Sigma, NADCAP, ITAR, RoHS, and other certifications can help build a contract assembly business’ reputation and trustworthiness.
9. Assembly Process
The assembly process for a contract assembly business generally involves the following steps:
- Identifying the right contract assembly partner: The first step is to identify a contract assembly partner that is suitable for your particular needs. This includes factors such as the type of assembly process required, the capacity they can offer, and their cost structure.
- Establishing the correct specifications: Once you have identified a partner, the next step is to establish the correct specifications for the assembly process. This includes the materials and components used, the assembly instructions, and the quality assurance requirements.
- Sourcing the necessary components: After the specifications have been agreed upon, the contract assembly partner will source the necessary components to complete the assembly process. This includes raw materials, parts, and any other necessary items.
- Assembling the product: The assembly process then begins, with the contract assembly partner using the components to assemble the product per the agreed upon specifications.
- Inspecting the finished product: Once the product has been assembled, it is inspected to ensure it meets the required quality standards and specifications.
- Shipping the product: The finished product is then shipped to the customer’s location or to the next assembly stage.
10. Customer Relationships and Partnerships
Step 1: Identify Your Target Customers: When it comes to contract assembly businesses, salespeople should focus on targeting corporate executives, procurement managers and small business entrepreneurs.
Step 2: Research Your Customers: Conduct research on potential customers to understand their needs and goals. This will enable you to tailor your services and ensure that you are able to meet their specific requirements.
Step 3: Establish Connections: Reach out to your prospective customers to establish connections. Try to set up meetings, either in person or virtually, to get to know them better and find out more about their businesses.
Step 4: Develop Custom Solutions: Develop custom solutions that will meet the customer’s needs while staying within their budget. Make sure that you are able to provide high-quality services while helping them reduce their production costs.
Step 5: Build Relationships: Work on building long-term, mutually beneficial relationships with your customers. Make sure that they know they can rely on you and that you will always be there to support them.
Step 6: Offer Complex Assembly Services: Consider offering complex assembly services to your customers. This will allow them to save time and money and give them greater control over their production process.
Step 7: Stay in Touch: Make sure that you stay in touch with your customers and keep them updated on the progress of their projects. This will help build trust and loyalty and may even lead to further opportunities.
How the contract assembly process works
Step 1: Find and select your contract assembly suppliers
Finding and selecting the right contract assembly supplier for your business is an important step for any business. In order to ensure you make the right decision, there are several steps you should take.
- Understand Your Business Goals and Product Specifications: Before you start looking for a contract assembly provider, make sure you have a clear understanding of your business goals, product specifications, budget, and schedule. This will help ensure that when you speak with potential suppliers, you are able to communicate your needs effectively.
- Determine If Your Project is a Good Candidate for Outsourced Assembly: Consider the contextual benefits of outsourcing and review your project to determine if it is a cost-effective candidate for contract assembly. Break down each product by the necessary categories of product, budget, schedule, and customer value.
- Protect Your Intellectual Property: Before sharing any details, drawings, or files relating to your project, execute a mutual disclosure NDA that will protect your confidential information and that of the contract manufacturer.
- Know Your Product: Understand the defining characteristics of your product so you can identify contract manufacturers that specialize in your product type. This will ensure they have the capability and expertise to meet your expectations.
- Know Your Budget: Have a clear understanding of your budget and be open with your budget limitations. This will help you quickly identify the contract manufacturer that best fits your overall and financial parameters.
- Know Your Schedule: Have a tentative timeline to communicate expectations to potential contract assembly and sub-assembly service providers.
- Know Your Values: Aim to find a contract manufacturer that shares similar core values to your own.
- Find the Right Contract Manufacturer: Once you have all of the necessary information, use a list of strategic questions to help you identify the right contract assembly provider that best suits your specific project needs.
Step 2: Begin designing and building your product
Designing and building a product can have a significant impact on the contract assembly process. With proper design, the assembly process can be simplified, streamlining the production workflow and reducing labor costs. On the other hand, inadequate design can lead to delays in the assembly process, increased labor costs, or even product failures. If a business has already designed an assembly process, AE can provide the necessary manufacturing and assembly space. If not, AE can help design the manufacturing process to turn the concept into a finished product. Revolv’s staff of experienced assemblers can also help to alleviate the stress of procurement and assembly.
Step 3: Build a network of contract assembly suppliers
Building a network of contract assembly suppliers can help streamline the contract assembly process by enabling businesses to quickly identify the right manufacturing partner that best fits their unique product and project needs. By having a better understanding of the product being manufactured, budget range, schedule expectations, and values, businesses will be able to more accurately assess prospective suppliers and ensure that they are well-equipped to handle the project. Additionally, having a network of contract assembly providers to draw from will provide greater flexibility to businesses in terms of their needs, providing options for shorter lead times, lower costs, and higher quality products. This in turn can save businesses time and resources and help them bring their products to market faster and with better results.
Step 4: Get quotes from multiple suppliers and compare capabilities
Step 1: Identify your business goals, product specifications, budget, and schedule. Determine whether your project is a good candidate for contract assembly and make sure to protect your confidential information by executing a mutual disclosure NDA.
Step 2: Research and evaluate potential contract assembly service providers. Make sure the service providers you select specialize in the product type you are producing and have the capability and expertise to meet your expectations.
Step 3: Receive quotes from multiple suppliers and compare their capabilities. Make sure to communicate your budget and timeline expectations in your request for quotes so that you can accurately compare the quotes you receive.
Step 4: Select a contract assembly service provider that best fits your overall and financial parameters. Ask questions and make sure you understand the terms and conditions of the service provider before signing a contract.
Step 5: Select the supplier that best meets your needs
Step 1: Research Your Project Requirements
Before beginning the search for a contract assembly provider, it is essential to have a solid understanding of the project’s goals, product specifications, budget, and schedule. This will ensure that the right provider can be selected to fulfill the specific requirements of the project.
Step 2: Evaluate Potential Contract Assembly Providers
When searching for a contract assembly provider, it is important to evaluate their capabilities and experience in the industry. Be sure to check if they are ISO-certified and have a well-trained staff that can deliver the type of services required. Additionally, it is important to find out if they offer testing services and have the capacity to handle the size of the project.
Step 3: Negotiate Terms
Once a provider has been identified, it is important to negotiate the terms of the agreement. This includes discussing the cost, timeline, and scope of the project. It is also advisable to execute a mutual disclosure NDA to protect any confidential information that is shared between the parties.
Step 4: Monitor Progress
Throughout the duration of the project, it is important to monitor progress and ensure that the terms of the agreement are being met. This includes reviewing the quality of the work and making sure the project is delivered on time.
Step 6: Complete the contract with the selected supplier
- Execute a mutual disclosure NDA to protect both parties’ confidential information.
- Once a contract manufacturer is identified and both parties are in agreement, sign a contract outlining the details of the project.
- Include the timeline expectations, budget, product specification and any other pertinent information.
- Discuss any applicable warranties and guarantees as well as payment terms.
- Ensure that all necessary parts, components and materials have been supplied to the contract manufacturer.
- Make sure that all safety protocols, quality assurance and environmental requirements are in line with industry standards.
- Communicate regularly with the contract manufacturer throughout the project to ensure that all deadlines are being met.
- Once production is complete, inspect the products to ensure that they meet the product specifications outlined in the contract.
- Finalize payment terms and provide the contract manufacturer with any necessary feedback.
- Create a plan to maintain a long-term relationship with the contract assembly provider.
Step 7: Monitor progress on the project through audits, reviews and other mechanisms
Audits, reviews, and other evaluations can be used to monitor progress on a project. By establishing a system to regularly assess progress, you can ensure that the project is on track and can identify any potential issues before they become major problems.
Step 1: Identify the project milestones that need to be closely monitored.
Step 2: Establish a timeline for the project and set a timeline for the reviews and audits.
Step 3: Determine who will be responsible for conducting the reviews and audits.
Step 4: Establish a process for documenting the results of the reviews and audits.
Step 5: Ensure that all stakeholders involved in the project are made aware of the review and audit process.
Step 6: Perform the reviews and audits regularly and document any issues or successes.
Step 7: Develop a corrective action plan if any issues arise during the reviews and audits.
Step 8: Make any necessary adjustments to the project timeline based on the results of the reviews and audits.
By following these steps, you can ensure that your project is progressing on track and can take corrective action if any issues arise. Regular reviews and audits can help you identify potential issues and take the appropriate action to ensure that the project is successful.
Step 8: Manage costs associated with the contract assembly process
Step 1: Analyze the Value Added by the Assembly Process – Before committing resources to a contract assembly process, it is important to consider the value it brings to your business. Ask yourself if there is a high-value-added element of the assembly work, if the process requires special skills, and if so, if your organization has that capacity.
Step 2: Compare Labor Costs and Logistics – Compare the labor costs and logistics of contract assembly to the costs of your in-house assembly operations. This will give you an idea of which solution is more economically viable.
Step 3: Analyze Profit Margin – Consider whether the costs associated with assembly are affecting your profit margin. If so, contract assembly may be a good option to reduce costs and improve margin.
Step 4: Consider Multiple Contract Steps – If there are multiple steps to the assembly process, it is important to understand how each step affects the overall cost. If certain steps can be eliminated or performed more efficiently, this can reduce costs and increase efficiency.
Step 5: Verify Quality – Before signing a contract, it is important to inspect the quality of the assembly and ensure it meets your standards.
Step 6: Execute a Nondisclosure Agreement – When beginning a contractual relationship with a contract assembly provider, it is important to execute a mutual disclosure NDA to protect your confidential information.
Step 7: Identify the Right Contract Manufacturer – When selecting a contract assembly provider, make sure they have the expertise, knowledge, and experience in the manufacturing project you are seeking.
Step 8: Communicate Your Budget – When negotiating with potential contract assembly and sub-assembly service providers, it is important to communicate your budget range so that you can determine whether this option is viable.
Step 9: Set a Schedule – Have a tentative timeline for the project and provide it to prospective providers. This will help them understand your expectations and determine whether they can meet them.
Tips and tricks for getting the most out of your contracting process
1. Investigate Contract Assembler Capabilities
Investigating the capabilities of contract assemblers can help you make the most of the contracting process by ensuring that the manufacturer you choose not only has the experience and qualifications necessary to handle the project, but also the technical proficiency and production capabilities to meet your needs. Doing your due diligence to investigate the capabilities of contract assemblers can take the guesswork out of the contracting process and help you find the right partner for your project. This due diligence can include reviewing the contract assembly provider’s product and manufacturing experience, quality control methods, and capabilities for single and multi-step assembly, precision tooling, packaging, and shipping. Additionally, researching potential contract assemblers can help ensure that the contract manufacturer is up to date with the latest industry standards and certifications, such as ISO 9001:2015, in order to ensure the quality and accuracy of the finished product. Furthermore, the investigation should include a thorough assessment of the contract manufacturer’s budget and timeline to ensure that the project can be completed within the desired time frame and budget. By conducting a thorough investigation of a contract assembler’s capabilities prior to proceeding with a contract, you can ensure that you get the most out of your contracting process.
2. Establish a Relationship with a Contract Assembler
Establishing a relationship with a contract assembler can help get the most out of the contracting process by ensuring that the contracted assembly partner is well-suited to the particular project’s needs. Taking the time to understand the company’s own business goals, product specifications, budget, and timeline expectations will help to identify the right contract assembly provider. Through a detailed exploration of the product and its characteristics, budget, schedule, and customer values, companies can find a contract manufacturer that is capable and experienced in the specific assembly project. Furthermore, signing a mutual disclosure NDA that protects the confidential information of both the company and the contract manufacturer will help to ensure that the project remains secure. Ultimately, establishing a relationship with a contract assembler will help ensure that the project runs smoothly and efficiently, and that the company gets the most out of their contracting process.
3. Develop a Contract with a Contract Assembler
Developing a contract with a contract assembler can help you get the most out of your contracting process by providing a number of advantages. Using assembly contract software can reduce response time, improve productivity, and reduce the chance of human error. It also provides the ability to easily delegate work, which helps to streamline the contracting process. Additionally, contract assembly software can improve the quality of the contract, leading to better overall outcomes.
Having a clear understanding of your business goals, product specifications, budget, and schedule, will help you identify the right contract assembly provider for your project. Knowing your product’s defining characteristics will also help you find a provider that has the capability to meet your expectations. Finally, understanding your budget range for outsourcing can help you quickly identify the contract manufacturer that best fits your needs.
By taking all of these steps, businesses can benefit from an efficient and cost-effective contract assembly process, saving time and money while ensuring the highest quality of service is met.
4. Consider the Complexity of Your Order
By considering the complexity of your order and weighing the costs of labor, materials, and manufacturing processes against the value they provide, you can get the most out of your contracting process. You may want to ask questions such as: what is the high-value-added element of the assembly work? Does the process require special skills, and if so, does your organization have that capacity? Is contract assembly a more economically viable choice? Are assembly costs impacting your profit margin? Are there multiple contract steps? Is the inspection result up to your standards of quality? Ultimately, exploring these questions can help you determine if contract assembly is the right choice for your business and provide you with the best possible outcome.
5. Review the Quality Standards of the Contract Assembler
Reviewing the Quality Standards of a potential Contract Assembler is a crucial step in the contracting process. Knowing the Quality Standards of the potential Contract Assembler helps to ensure that the business’s product specifications, budget, schedule, and core values are met. It also helps to ensure that the product created is of the highest quality and meets the standards set by the business. By reviewing the Quality Standards of a Contract Assembler, businesses are able to make an informed decision about which Contract Assembler best suits their needs and will be able to create the highest quality product that meets their expectations.
6. Evaluate the Pricing of the Contract Assembler
- Calculate the total cost of the assembly process. This should include the cost of the raw materials, labor, and overhead costs such as shipping and insurance.
- Compare the cost with that of the process if you were to do it in-house. This will help you identify areas where the cost of contract assembly may be lower.
- Consider the quality of the assembly. Ensure that the materials used and the overall process is up to your standards of quality.
- Determine the turnaround time of the assembly. Evaluate the time it takes for the assembly to be completed and see if it fits into your production timeline.
- Factor in the reliability of the contractor. Do your research on the contractor and ensure that they are reliable and trustworthy.
- Analyze the potential for cost savings. Consider the volume and complexity of the assembly work and determine if the cost savings are worth the investment of outsourcing the assembly process.
- Review the potential for long-term contracts. Evaluate the possibility of engaging in long-term contracts with the contractor, as this could result in lower costs over time.
- Compare the prices of multiple contractors. Shop around and compare the prices of different contractors to get the best deal.
7. Leverage the Contract Assembler’s Expertise
Leveraging the expertise of a contract assembler can help you get the most out of your contracting process in a variety of ways. First and foremost, it can save you time and money. Contract assembly software allows the legal team to respond faster, reducing response time from three weeks to one day. It also improves productivity by saving time and relieving budget pressures. Furthermore, using contract assembly software can lead to a higher quality contract, as it reduces the chance of human error and enables the legal team to provide for commonly used options without losing oversight.
Additionally, working with a contract assembler allows you to take advantage of their expertise in manufacturing processes, and enables you to focus on other important business opportunities that can help you grow and scale your business. Contract assemblers can provide stability and cost reductions in labor, space, and cost, as well as higher quality products and services. Finally, they can provide you with flexibility and process expertise that you would not have access to on your own. By leveraging the expertise of a contract assembler, you can ensure that your contracting process is as efficient and cost-effective as possible.
8. Streamline Your Assembly Process
Streamlining your assembly process can help with contracting in several ways. First, it can help reduce costs associated with purchasing raw materials, labor allocation, and manufacturing processes. By streamlining the assembly process and making it more efficient, you can minimize the need for costly inputs while still ensuring the quality of the finished product. Additionally, streamlining your assembly process can reduce the amount of time needed to complete the assembly work, allowing you to complete contract work more quickly and efficiently. Finally, streamlining your assembly process can help you meet customer requirements more quickly and reliably, helping you increase customer satisfaction and ensure repeat business.
9. Establish a Schedule with Your Contract Assembler
Establishing a schedule is key to getting the most out of the contract assembly process with a contract assembler. When OEMs and businesses clearly communicate expectations about their budget, timeline, product details, and core values to potential contract assembly and sub-assembly service providers, it allows them to quickly identify the most suitable partner. A tentative timeline should be set to ensure the contract manufacturer has sufficient lead time to work on the project, which can vary depending on the complexity of the project. A clear schedule can help to ensure the project is completed within the expected timeframe and budget, and that the values and needs of both companies are met.
10. Utilize a Quality Assurance System
A quality assurance system can help with contracting by providing assurance that the products and services provided by the contracted manufacturer will meet the expectations of the customer, regulator, and other stakeholders. By adhering to standards such as ISO 9001, manufacturers demonstrate the ability to consistently provide higher quality products and services that meet customer and regulatory requirements. Through the implementation of lean manufacturing tools and methods such as 6S, TPM, ROC, value stream mapping, and bottleneck analysis, contract assemblers can reduce waste and eliminate production inefficiencies while improving product quality and production time. Furthermore, by reducing in-house labor and decreasing the space and equipment needed on-site, manufacturers can eliminate many of the hidden overhead costs of their manufacturing operations. Finally, partnering with a contract assembler that adheres to a robust ISO 9001:2015 Quality Management System (QMS) ensures that the manufactured products and services are of consistently higher quality and more reliable than those produced without such a system in place.
11. Stay in Touch with Your Contract Assembler
Finding the right contract assembly provider for your manufacturing project is paramount for success. In order to ensure the best possible outcome and maintain open communication throughout the process, there are several steps that businesses can take to stay in touch with their contract assembler.
Step 1: Establish expectations. Before beginning the partnership, it is essential to have a solid understanding of your own business goals, product specifications, budget, and schedule. Discussing these expectations with the contract assembly provider will ensure both parties are on the same page and provide a baseline for communication.
Step 2: Execute an NDA. To protect your intellectual property and confidential information, it is important to execute a mutual disclosure Non-Disclosure Agreement (NDA) with your contract assembly provider.
Step 3: Provide detailed product information. Communicate the necessary information about the product being manufactured, including its defining characteristics. This way, your contract manufacturer will be better equipped to meet expectations.
Step 4: Share budget and timeline. As soon as possible, provide your contract manufacturer with a budget range and tentative timeline so they can quickly determine if the project is cost effective and fits their schedule.
Step 5: Be open to communication. Maintain open communication throughout the process. Have regular meetings with your contract assembly provider and be sure to ask questions to ensure everything is on track. Ask to be updated regularly and provide feedback when needed.
By taking the time to establish expectations, protect your information, and stay in touch with your contract manufacturer, you will be more likely to achieve the desired outcome for your project.
12. Invest in the Right Equipment
When selecting a contract assembly partner, it’s important to understand the type of equipment that will be used for manufacturing. Depending on the industry and specific project needs, the right equipment should be able to deliver high-quality products and services. Potential equipment to invest in includes automated assembly systems, cleanroom assembly systems, robotic assembly systems, automated testing systems, and plastic injection molding systems. Additionally, secure warehouse storage of bulk components should be considered to help manage the logistical hassles and workforce complications that come with production management. By understanding the extensive benefits of contract assembly services and investing in the right equipment, OEMs and businesses can eliminate unnecessary waste, reduce overhead and labor costs, and scale at a sustainable trajectory.
13. Know Your Product’s Supply Chain
Knowing your product’s supply chain can help with your contracting process by allowing you to identify the best suppliers for your specific needs. By understanding the various stages in the supply chain – from sourcing materials, to sub-assembly and final assembly, to distribution and fulfillment – you can ensure that you select the most efficient, cost-effective manufacturer for your production. Additionally, by utilizing services such as product inspection, labeling, and kitting and shipping, you can ensure that your products are of high quality and that they arrive to your customers quickly and safely.
14. Understand the Contract Assembler’s Specialties
Contract assembly services specialize in efficiently and cost-effectively combining semi-finished parts into more complicated semi-finished goods or final products. This process can be used for welding, automotive assembly, and kitting projects. Contract assembly services can provide manufacturers with a profitable opportunity to outsource certain projects, as it can be completed quicker, with a higher level of quality and expertise, and with less labor and production costs.
Contract assembly services offer several advantages, including reduced response time, improved productivity, less chance of human error, easier delegation of work, and general quality improvement. When considering contract assembly, businesses should have a solid understanding of their own business goals, product specifications, budget, and schedule. Additionally, businesses should use a case-by-case framework to ensure that their project is a cost-effective candidate for contract assembly. Finally, it is important for businesses to protect their intellectual property when discussing the project with their potential contract assembly provider.
15. Utilize a Database to Track Your Projects
Using a database to track contracting projects can help companies save time and money. Keeping track of all the costs associated with a project, from materials to labor, can be difficult without a comprehensive database. Having a database also allows companies to quickly access important project information, such as deadlines and cost estimates. This can help companies ensure that the project is completed on time and within budget. Additionally, a database allows companies to easily create reports that can be used for budgeting and forecasting. This can give companies an overall better picture of their contracting projects and help them plan for the future.
What is contract assembly manufacturing?
Contract assembly manufacturing is a process in which parts, components, or products are assembled by an outside company or contractor, rather than by the company that owns the product or components. Contract assembly provides many benefits to manufacturers of all sizes, including cost-efficiency, a higher level of quality, and access to specialized expertise in assembly services. Contract assembly services allow OEMs to outsource their assembly, which could include the assembly of electronics, machines with intricate parts, or other products that require specific assembly. Companies may choose to outsource assembly to take advantage of comparative advantage, to reduce costs, or because they lack the expertise in-house. Contract assembly of automobiles is also a common practice, with the contractor assembling components or portions of the vehicle on behalf of the car manufacturer.
What is the process for contract assembly manufacturing?
The process for contract assembly manufacturing begins with researching and identifying the company that would be best-suited to handle the assembly process. Once the company that is to perform the contract assembly has been identified, the business will then negotiate a contract with the company, outlining the specific services that are to be provided and the associated costs. After the contract is finalized, the business will then send the components and parts to the contract assembly company to begin the manufacturing process.
Next, the contract assembly company will assemble the components and parts into the final product based on the specifications provided. Depending on the product, the company may also have to perform some quality control checks to ensure that the product meets the required standards. Finally, the finished product will be shipped back to the business for distribution.
What are the different types of assemblies in contract assembly manufacturing?
The different types of assemblies in contract assembly manufacturing can generally be classified into three main categories: mechanical and electromechanical sub-assemblies, contract assembly, and product packaging assemblies.
Mechanical and electromechanical sub-assemblies involve the assembly of complex components and parts, such as wiring and other electrical components. Contract assembly, on the other hand, involves outsourcing the assembly process of a particular product, such as a book, machine, or automobile to a company that specializes in the process. Finally, product packaging assemblies involve the assembly of components and parts into packages, such as boxes and other containers, as well as the labeling and sorting of the items.
In addition, many companies also outsource the assembly of their products to contractors, including the use of tools, assembly systems, and general contract machining. This allows the company to take advantage of the expertise and resources of the contractor, which can end up saving the company time and money in the long run.
What are the benefits of outsourcing contract assembly?
The benefits of outsourcing contract assembly are numerous and include reducing response time, improving productivity, lessened chance of human error, easier delegation of work, improved quality, cost savings, space savings, scalability, and process expertise. Contract assembly software can reduce response time by allowing the legal team to respond faster and create a better first draft that can help both parties reach an agreement quicker. It also saves time and relieves pressure on the budget. Manufacturers can take advantage of a fixed per-unit pricing for labor cost stabilization to flatten out variable manufacturing labor costs, providing ease in budgeting. Contract assemblers also provide immediate relief in times of labor shortages to ensure productivity remains high. A trusted contract assembly and sub-assembly provider can bypass the need for the rigors of hiring, training, and dealing with all of the human resource tasks associated with employee onboarding.
What are the disadvantages of outsourcing contract assembly?
The disadvantages of outsourcing contract assembly include: the risk of quality control issues due to lack of oversight; the potential for communication problems between the manufacturer and assembly house; the potential for delayed production due to a third-party delay; the inability to adapt quickly to changing customer needs; and the potential for increased labor costs as contract assembly costs may be higher than in-house labor costs. Additionally, there may also be additional costs associated with storing excess materials, as well as the cost of managing the logistics of the process. Lastly, another disadvantage of outsourcing contract assembly is the lack of control over the assembly process, which can lead to delays and setbacks in production.
What are the skills and expertise required for contract assembly manufacturing?
Contract assembly manufacturing requires a range of skills and expertise, including a solid understanding of business goals, product specifications, budget, and schedule; knowledge of the contextual benefits of contract assembly; familiarity with the product being manufactured; knowledge of the budget range for outsourcing; an understanding of the project timeline expectations; knowledge of the customer’s core values; and an ability to identify the right contract manufacturer that best suits a specific assembly project. Additionally, manufacturers should have ample experience, industry connections, and in-depth knowledge that spans multiple industries.
What type of machinery and tools are used in contract assembly manufacturing?
Contract assembly is a process that involves outsourcing the assembly of components or parts for further assembly or to prepare products for sale. The types of machinery and tools used in contract assembly manufacturing depend on the type of assembly being performed. Generally, manual assembly is done with hand tools, such as screwdrivers and wrenches, while automated assembly requires special mechanization equipment such as robots, conveyor belts, and other sophisticated automated systems. For small parts assembly, specialized tools and machines may be used, such as presses and other tools to accommodate the size and shape of the components being assembled. In addition, contract assemblers may utilize specialized tools and machines such as ultrasonic welders, vision systems, soldering irons, crimpers, and other machines to perform precision assembly tasks.
How is contract assembly pricing structured?
Step 1: Begin by determining the total overall cost versus the labor-only costs and the quality of the finished product desired. Consider the speed of production required and if there are any product requirements that must be met.
Step 2: Identify the types of materials or components needed, such as raw materials, electronics, or hardware. Factor in the types of equipment and tooling required, the sophistication of the workforce needed, and the volume of the project.
Step 3: Account for any compliance costs or certifications needed for the project.
Step 4: Share all required information with the contract manufacturer, including current PDF drawings, sample product, projected schedules, prototypes, product samples, specified and sourced components, and budget for assembly.
Step 5: Once quoting, estimating, negotiating, and scoping of the project is completed, the contract manufacturer will require an onboarding process in order to set up a business account.
What is the best way to find a contract assembly manufacturer?
The best way to find a contract assembly manufacturer is to start by understanding your own business goals, product specifications, budget, and schedule. Then, search for a contract manufacturer that has ample experience and industry connections in the field, as well as in-depth knowledge that spans multiple industries. It is important to protect your intellectual property and only share details, drawings, or files relating the project specifics after executing a mutual disclosure NDA that protects your confidential information and that of the contract manufacturer.
Once you have established the four essential project parameters – your product, budget, timeline expectations, and core values – you can search for a contract manufacturer that meets your criteria. To narrow down the search and find the best fit for your unique manufacturing project, it is advisable to ask a few strategic questions, such as: What is the contract manufacturer’s experience in your industry? What processes do they have in place to ensure the highest quality standards? What is the timeline for the project? What is the pricing model? How do they ensure your intellectual property is protected?
By understanding your product, budget, timeline, and core values, as well as asking the right strategic questions, you can find the contract assembly manufacturer that is the best fit for your manufacturing project.
How can I ensure quality control when outsourcing contract assembly?
When outsourcing contract assembly, it is important to ensure quality control throughout the process. Here are some steps businesses should take to ensure quality control when outsourcing assembly:
- Identify your company’s quality standards and objectives. Companies should determine and document their desired quality levels from the start of the outsourcing project to ensure all standards are met.
- Determine the contract assembly provider’s certifications and accreditation. Companies should make sure their contract assembly service provider has an accredited ISO 9001 Quality Management System (QMS) with annual audits to ensure compliance with consistent standards.
- Request to review the contract assembly provider’s processes and workflow. Companies should ask to review the contract assembly provider’s processes and workflow to ensure they are in line with the company’s quality standards and objectives.
- Ask for samples of the finished product. Companies should ask to receive samples of the finished product prior to placing an order to ensure they are satisfied with the quality of the assembly.
- Have a plan for regular quality control check-ins. Companies should plan to check in regularly with their contract assembly provider to ensure quality control is maintained throughout the process.
By following these steps, businesses can ensure quality control when outsourcing contract assembly.