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3 Great Electronics Outsourcing Tips From the Field

During the year-long Drive for Innovation project, in which we circled the United States interviewing engineers, we stopped at perhaps two- or three-dozen contract manufacturers.

Because this was 2011 through 2012, we were privy to some fresh insight as the CMS/EMS industry was pulling out of the depths of the recession. I thought it was a dead sector in the United States. Not for the first time was I dead wrong.

Here are some of the more compelling takeaways.

Asian competition
Tony Hamby, general manager of Micross Components (Orlando, Fla.), talked to us about competition from Asia providers. He summed up his feelings in a nutshell: “Their strength is their limitation.” What he meant by that speaks as much to non-Asian manfacturing opportunities as anything.

Importance of engineering
One of the known drawbacks to offshoring electronics design is that the design prototype needs to be passed back and forth between, say, Asia and North America or Europe. But more importantly, if engineering is located far from manufacturing, a company loses the insight that comes from being right on top of the manufacturing process.

Tim Nolan, senior hardware engineer with ETC in Middleton, Wisc., gave us the tour and the philosophy behind why his CEO, Fred Foster, decided to seat his engineers side by side with manufacturing.

Offshoring on shore
What happens when your offshoring strategy is physically located on shore? That's the case with EIT, based in Sterling, Va., not too far from Washington, D.C. The 36-year-old company started out doing development work for DuPont, then began manufacturing some products for DuPont, and the rest is history.

EIT Engineers and technicians gather around the Drive for Innovation Chevy Volt  in Sterling, Va. A plant five hours south gives EIT an 'offshoring' cost basis.

EIT Engineers and technicians gather around the Drive for Innovation Chevy Volt
in Sterling, Va. A plant five hours south gives EIT an “offshoring” cost basis.

The company's main plant is in Sterling, but a few years ago, it opened a manufacturing facility five hours' drive south, near the North Carolina border, in Danville, Va. Labor costs are much lower and engineering is nearby.

CEO David Faliskie talked to us about the strategy of onshoring his “offshoring” strategy.

What do you think? Do any of these experiences resonate with your work?

1 comment on “3 Great Electronics Outsourcing Tips From the Field

  1. Brian Fuller
    February 26, 2013

    Each of these examples is interesting, in that they represents rational responses to offshore manufacturing trends. But they're not the only ones, obviously. What are you doing to become more competitive?

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