What should you look for when selecting an Electronic Manufacturing Services (EMS) Provider?

Before starting the selection process of an EMS provider, there are a few internal questions you must ask yourself or your organization.

Start with the “Why”.

First, understand why you're searching for an EMS provider. Are you lacking EMS capabilities and capacities? Or are you trying to improve quality, lower costs, access new geographic markets, or simply trying to change your cost model from fixed to variable cost? If you have an existing EMS provider, are you trying to replace or add another EMS for capacity, capability, or redundancy?

Once you understand the “Why”, you can start understanding the “What”.?

The article below is limited to what to look for in an EMS provider.?? So, you will have to dig deeper to understand how to quantify each criterion and how to weigh each criterion based on your organizational requirements.? Hopefully, this article will give you some ideas on what to look for in an EMS provider that meets your needs.

Below are some of the areas that most Original Equipment Manufacturers (OEMs) review when evaluating EMS providers:

1.??? EMS Equipment: key equipment available such as Surface Mount Technology (SMT), or Pin Thu Hole (PTH) Technology for Automated Electronics Assembly processes.

-Importance: The type of SMT Equipment starts to define the capabilities of the EMS Provider.

-Considerations: ?Understand the type of equipment at the site, the age, maintenance records, speed, the size of components capable of placing, and the experience and competencies of the operators.

2.?? EMS MIX-Volume:

-Importance: Defines the size and frequency of batches the EMS typically works with: is the EMS provider a High Mix, Low Volume (HMLV) shop, or a High Volume, Low Mix (HVLM) shop???

-Considerations: HMLV vs HVLM are very different business models.? Ask the size of the batches, the number of active part numbers the EMS is supporting currently, the number of changeovers the EMS has per day.? Get a good feel of the product mix and volumes of the EMS provider. Make sure the product mix and volume match your model.

3.?? Engineering Change Order process.?

-Importance: The frequency and how the EMS documents and tracks engineering change orders (ECOs) is critical. ?How fast can the EMS implement and document a change order for fast-changing technology will define whether the EMS is a fit for you??

-Considerations: Ask for the number of ECOs the EMS runs per day.? Ask to define their process and the tools they use to implement changes in a manufacturing process.? How long it takes to implement an ECO is also important.? Especially for a fast-changing technology company that may require several changes daily.? Get documented facts to get a clear assessment of the ECO process.

4.?? Similar products:

-Importance: Does the EMS currently build similar products as yours?? Having similar products in a similar industry reduces the learning curve and risks.

-Considerations:? Are the products currently manufactured in the same industry as yours?? If so, how long and what is the EMS track record in that industry?? Does the EMS provider have the necessary certifications for your industry, (i.e., AS9100, ISO 9001, ISO 13485, etc.)?? See documented performance (i.e., KPIs in similar products), and similar industries in the proposed EMS factory.

5.?? Test equipment and resources.

-Importance: ?A robust test strategy support system, equipment, and execution by your EMS provider will highly improve the quality product before it leaves the factory.?

-Considerations: Clearly understand the depth and breadth of the EMS Test team, test equipment, and test experience on your product.? Understand the EMS maintenance of the test platforms to further gauge risks in the test execution.? Understand on the ability for the EMS provider to develop Test solutions for your products.

6. Cross-functional Support Team:

-Importance: One of the most undervalued areas in the selection process is THE PEOPLE.? Clearly understand the depth and breadth of the cross-functional team that will be supporting your program.?

-Considerations: Evaluate the team’s industry experience and time working together.? Understand the team’s competencies, succession planning, cross-training, and continuous improvement systems and processes.? Understand the experience of the “Quarterback-of-the-team” …. The program manager.? Understand the Program Manager’s track record of leading programs like yours.

7.?? Other Factory processes

-Importance: The other equipment or factory capabilities needed to produce your product are just as critical.?

-Considerations: Capabilities such as conformal coating, solder paste inspection, manual assembly, systems integration, automated visual inspection, and automated in-circuit inspection. Understand the geographical infrastructure of the Factory.? How robust is the surrounding area's infrastructure regarding electrical, gas, water, transportation, and people?

8.??? Global Footprint

-Importance: The geographical presence of an EMS provider can significantly impact logistics, lead times, Intellectual Property, and costs.

-Considerations: Evaluate if the EMS provider has facilities in regions that align with your market needs. Consider factors such as tariffs, shipping costs, and potential geopolitical risks.? Your product size, weight, HTS codes, product mix, and volume together with IP protection Laws will also be factors.? Understand potential risks in EMS locations regarding weather, natural disasters, local economy, and access to qualified personnel relative to the location of the EMS.

9.?? Supply Chain

-Importance: A robust supply chain ensures timely delivery of components and materials.

-Considerations: Assess the EMS provider’s relationships with local and global suppliers, their ability to source materials, and their supply chain management practices. Understand the EMS electronic purchasing power and the ability to change based on your forecasts.? Check out the EMS supply chain systems, processes, and people to further evaluate their Supply Chain.? NOTE:? EMS supply chain may be one of the most critical aspects of any EMS, so evaluate thoroughly and understand potential risks.

10.?Box Build Capabilities

-Importance: Box build services include the assembly of complex products, including enclosures, sub-assemblies, and final product assembly.

-Considerations: Ensure the EMS provider has the necessary expertise and equipment to support box-build projects.? Look for space available for box-build.? Also, look for the traceability tools needed to track product such as associated parent-child relationships within a complex box-build assembly.? Understand the capabilities of the Enterprise Resource Planning (ERP) or Manufacturing Execution Systems (MES) systems to track, measure, and execute complex systems, sub-assemblies, and tests within the box-build processes.

11.?Prototype/NPI (New Product Introduction)

-Importance: Effective prototype and NPI processes are crucial for bringing new products to market quickly and efficiently.

-Considerations: Evaluate the EMS provider’s experience with prototyping and their ability to scale from prototype to full production.? Does the EMS provider do prototype and production within the same lines?? Or do they have different equipment between production and prototype?? The key question to ask: Are there any deviations in equipment and processes between prototype and production lines?? If so, this may add more complexity, time, resources, costs, and risk to the NPI process.

12.?Intellectual Property Protection

-Importance: Protecting your intellectual property (IP) is critical, especially when working with offshore EMS providers.

-Considerations: Assess the EMS provider’s IP protection policies and their track record in safeguarding client IP.? Check for continuous IP protection training employee records.? Check the robustness of their IP protection systems and processes on how confidential data is handled, stored, and tracked.? Understand the IP protection technology roadmap and have your IT team evaluate it further.? Also, understand the Country’s IP protection laws and enforcement track record where the EMS factory is located.

13.?Depth and Breadth of Key Positions

-Importance: The expertise, experience, depth, and breadth of key personnel can significantly impact the success of your project, especially if key personnel leave or taken off your project.

-Considerations: Evaluate the qualifications and experience of the EMS provider’s key staff, including engineers, program managers, and quality control personnel.? What happens when a key person is gone, what is the bench strength of the team, and does the contingency plan address such areas?? Key to understand the experience and competency difference between their A, B team, and C teams.? What is the EMS cross-training, skills testing, and upskilling processes based on contingency and succession plans?

14.?Disaster Recovery Planning

-Importance: A comprehensive disaster recovery plan ensures business continuity in the event of unforeseen disruptions.

-Considerations: Assess the EMS provider’s disaster recovery plans, including backup facilities, data recovery processes, personnel, and risk mitigation strategies.? Is the plan consistent across all EMS factories?? How often is the Disaster Recovery Plan updated?? Who is involved and is there a process to continuously update it?

15.?Succession Planning

-Importance: Succession planning ensures that critical roles can be filled quickly in the event of staff turnover.

-Considerations: Evaluate the EMS provider’s succession planning processes and their ability to maintain continuity in key positions.

16.?Transfer Process

-Importance: A smooth transfer process is essential when moving production from one EMS to another, or between an OEM facility to selected EMS provider.

-Considerations: Assess the EMS provider’s experience with production transfers and their ability to minimize disruptions during the transition.? Understand the EMS process, systems, and personnel involved in a transfer.? Looke for standard transfer Gantt chart, process flowcharts, and work instructions to fully understand how the EMS is approaching the Transfer process.? Understand the experience of the team in the transfer of products.

17.?Transparency of Data

-Importance: Transparent data sharing ensures that you have real-time visibility into production processes and performance.

-Considerations: Evaluate the EMS provider’s data-sharing practices and their ability to provide accurate and timely information, particularly in quotes, manufacturing production, and quality performance.

18.?Communication Modes and Frequency

-Importance: Effective communication is crucial for collaboration and problem-solving.

-Considerations: Assess the EMS provider’s communication practices, including the frequency and modes of communication.? Ask about their escalation process and quarterly business reviews.? Understand your executive sponsor's influence and how often he is communicating with you and your team.?

19.?IT Infrastructure

-Importance: A robust IT infrastructure supports efficient operations and data security.

-Considerations: Evaluate the EMS provider’s IT systems, including their capabilities for data management, cybersecurity, and system integration.? Understand the EMS IT technology roadmap and how it matches with your IT roadmap.? Share with your internal IT staff to see if there are any gaps or risks you are adding to your supply chain.

20.?Quality

-Importance: High-quality standards ensure that products meet specifications and customer expectations.

-Considerations: Assess the EMS provider’s quality control procedures, processes, certifications, and track record for delivering high-quality products.? Look for similar products and quality performance metrics. Understand the commitment to a quality, the problem-solving culture, processes, and systems updates.? Understand the sharing of resources, best practices, and ideas of quality requirements between internal EMS factories.? Share all EMS quality information with your quality team to see if there are any gaps or risks.? Perform a quality audit of the EMS team to dig deeper of the quality systems, processes, and people.

21.?Cost Competitiveness

-Importance: Competitive pricing is essential for maintaining profitability.

-Considerations: Evaluate the EMS provider’s pricing structure and their ability to offer cost-effective solutions without compromising quality.? Does the EMS have any standard practices for cost reduction? How can my team influence them for further cost reductions?? Do they have a cost reduction team?? Can they work jointly with my team to identify cost reductions?? How will the process work?

22.?Financial Stability

-Importance: Financially stable EMS providers are more likely to deliver consistent and reliable services.

-Considerations: Assess the EMS provider’s financial health, including their revenue, profitability, and creditworthiness.? An EMS with weak financials can bring your business to its knees.? Do your “due diligence” on both the current and past financial performance of EMS.? Run a D&B and ask for current audited financials to understand the current financial status of the EMS.? Evaluate their balance sheet, income statement, and statement of cash flows, and have your CFO run a risk analysis of the EMS.? Also, understand the EMS customer mix and industry concentration.? Evaluate if there are any potential risks with the EMS major customers based on past “peaks and valleys” of the EMS customer requirements.

23.?Culture

-Importance: A compatible corporate culture can enhance collaboration and alignment with your business values.

-Considerations: Evaluate the EMS provider’s corporate culture, including their values, work environment, and employee engagement practices.? Understand EMS Executive involvement with other customers.? How do they engage and add value to their customers?

24.?Innovation

-Importance: Innovative EMS providers can offer advanced solutions and stay ahead of industry trends.

-Considerations: Assess the EMS provider’s commitment to innovation, including their investment in R&D and their track record for introducing new technologies.? Understand the EMS Technology roadmap and how it matches with your roadmap.? Are they projecting investments in similar areas that will support your technology roadmap long term?? Evaluate the future investment in equipment, people, IP, and processes that may add value to your supply chain.

25.?Executive Access

-Importance: Direct access to senior executives can facilitate decision-making and problem-solving.

-Considerations: Evaluate the EMS provider’s accessibility to their executive team and their willingness to engage with clients at a senior level.? Very important how easily it is to access EMS Executives for faster decisions, ideas, or advice.

26.?Capacity

-Importance: Capacity ensures the necessary EMS personnel, equipment, space, and resources to build your product(s) now and in the future.-Considerations: Assess the EMS provider’s space available, equipment utilization, number of shifts, personnel, and systems to scale production based on your needs.? Find out any potential bottlenecks such as available manpower, engineering, shop floor personnel, or other special equipment needed to build your product.? Understand the process of how the EMS adds capacity to its operations.? Evaluate potential bottlenecks outside of the EMS control such as infrastructure, access to talent, and location.

27.?Customer Service

-Importance: Excellent customer service ensures a positive and productive relationship with your EMS provider.

-Considerations: Assess the EMS provider’s customer service practices, including their responsiveness, problem-solving capabilities, and customer satisfaction levels.

28.?Mission, Vision and Core Values

-Importance: Matching or similar mission, vision, and core values can make it much easier to increase collaboration, increase trust, and provide long-term success.

-Considerations: Assess the EMS provider’s mission, vision, and core values.? Discuss with several key executives and key employees to get further context.? Interview shop floor people to see if they are aligned with the mission, vision, and core values.? Check customer references to see if EMS lives by its core values.

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Hopefully, you have some additional ideas on what to look for in an EMS provider.? The next action is to quantify and weigh each criterion based on needs.? I Suggest you quantify all data to avoid any bias.? Once you have a shortlist of EMS providers, you should visit the EMS provider’s factory at least once to verify all information.? Remember, your EMS provider will be an essential extension of your organization, so “due diligence” is necessary within your selection framework.

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David Chavez is a professional sales and sales leader in the EMS sector for over 25 years.