There was a time when the economy was good and electronic companies handled the manufacturing. But then depression came around, and IBM’s answer to it was to outsource to another independent company.
The move was unexpected, but right there it started a new trend. Electronic design companies, now called Original Equipment Manufacturer (OEM) continued to outsource and gave rise to Electronic Contract Manufacturing (ECM) companies, which took care of manufacturing at a lower cost.
As an OEM executive looking to hire an ECM company, you need to be careful when making a decision. If you want to retain the integrity of your designs, you must hire a professional, a company with lots of experience and good referrals to back it up.
Outsourcing is still the trend, and electronic contract manufacturing companies are here to stay. If you’re looking to cut down on manufacturing costs, go ahead and outsource to an ECM company. Always keep in the mind the pointers mentioned above, and your business will be in good hands.
Since an ECM only purchases materials for the components they produce, they are able to purchase in bulk offering the OEM substantial cost savings. And since they are purchasing from their individual supplier in greater frequency, the manufacturer takes advantage of the strong relationships developed.