Outsourcing Electronics Manufacturing: What OEMs Need to Know

By Lipika Agarwal
26 May 2025
Business

Electronics outsourcing has become an increasingly common strategy among Original Equipment Manufacturers (OEMs). Instead of building products themselves, OEMs partner with Electronics Manufacturing Services (EMS) providers to design, produce, and test electronic devices on their behalf, saving both time and resources while mitigating risks associated with building them in-house.

Here's what OEMs need to consider before outsourcing:

1. Why Outsource Electronics Manufacturing?

Cost Savings: By outsourcing their manufacturing needs to an EMS company, OEMs can save time, effort, and costs associated with setting up their own factory.
Faster Time to Market: EMS providers are experts at manufacturing and delivering products faster, helping OEMs beat competitors to market.
Focus on Core Business: OEMs can concentrate on product design, marketing, and customer service while leaving manufacturing to professionals.
Flexible production: They adapt quickly to demand changes, whether scaling up for launches or down during lulls.
Skills and Expertise: EMS providers specialize in advanced manufacturing technologies—PCB assembly, automated testing, robotics, and lean production—without requiring OEM firms to invest in them.
Certifications and Compliance: They bring process knowledge, certifications (e.g., ISO 9001/13485), and QA best practices essential for critical sectors like medical and automotive.
Access to Global Supply Chains: EMS companies often maintain strong supplier networks that help reduce costs and mitigate shortages.

2. Selecting an EMS Partner

Experience and Expertise: Choose an EMS partner with experience working within your industry and an understanding of product needs.
Quality Standards: Confirm that they abide by global quality certifications such as ISO 9001 or IPC standards.
Scalability: Make sure your partner can scale with your business as the demand increases and manage larger volumes as they arise.
Communication & Location: For optimal delivery times and quality products, communication and location are both of utmost importance. When searching for partners near your market for faster deliveries.

3. Common Risks and How to Manage Them

Loss of Control: Regular communication must be established so you remain in charge of the quality and delivery expectations of your product or service.
IP Protection: For adequate intellectual property protection, implement strong legal agreements and select partners who possess proven track records in protecting it.
Hidden Costs: Keep an eye out for unexpected fees associated with contracts, such as engineering changes or testing services.

4. Building a Strong Partnership

Success in outsourcing requires strong partnerships; successful collaboration requires clear communication, regular reviews, and mutual trust to be sustainable in the long run.

Conclusion

Outsourcing electronics manufacturing can bring many advantages for OEMs: lower costs, faster time-to-market, and greater flexibility. Finding an EMS partner who understands your process well is key for finding success when outsourcing in today's highly competitive electronics market. With proper planning, outsourcing can be an intelligent move in today's increasingly challenging electronics marketplace.