Outsourcing risky?
In this blog, I offer a handle on how to minimize risk when outsourcing device assembly. In fact, in conversations with potential customers, I regularly sample this question. After all, when outsourcing work, customers do not want hassles with rejects, late delivery, excessive costs and thus a high risk of failure.
There comes a time when a company is short of its own assembly capacity. As a result, delivery times begin to increase and customers become nervous. In the short term, this can still be solved. Consider overtime, hiring staff and using indirect personnel. A situation that cannot be sustained. Eventually this leads to employee fatigue resulting in poor performance towards the customer, dissatisfied staff and rising internal costs.
So then there’s nothing left but to outsource. But is this really as simple as it seems? Assembling products in itself is simple work, you might say. You assemble a number of products using hand tools. But how do you know that you are guaranteed to get products that meet the specifications set? How do you know the products will be delivered on time? And how do you know you’re not going to pay too much? Ultimately, the product shouldn’t cost more than if you made it yourself. Besides, you don’t have forever to transfer all the knowledge about the product and the assembly method to the supplier. You are far too busy for that.
How do you get a supplier who is the solution to the capacity shortage? There are quite a few companies that say they can help. But if things go wrong, you won’t be able to deliver (on time). So the question is: what should you look for when choosing a supplier to outsource assembly work? Relying on an ISO 9001 certificate is not enough. This standard says nothing about product quality or process control. So you need a way to estimate in advance whether a supplier is suitable to supply. The assessment form shown below is a fairly simple way to do that based on criteria. The weighting factor is left blank. This may be different for each outsourcer. Ultimately, the completed form results in a weighted average that gives a good indication of the level of that supplier.
Finally, you have found a supplier. Which comes out well in the initial assessment or audit mentioned above. And where the feeling is also good. Then the next step is to place an order. Agree with the supplier that this is a trial order. The next step depends on the results of this order. Agree which criteria will be used to evaluate. That is just as fair. These criteria may include communication, timely delivery, quality, speed, documentation and identification.
If the trial order is successful, then follow-up orders can be placed. Whether under a framework contract or not. Again, it is important to periodically assess the supplier’s performance. Enclosed you will find a second document that can be used for this purpose. Ultimately, it is possible to reach improvement agreements based on the results. Through which the supply is further optimized. Ultimately this should lead to a rock-solid trust in the supplier.
