To entrust the production of electronics: from its own factory to the fabless company

In the last article, we talked about the main stages of commercial electronics production, made a list of upcoming tasks for getting a batch of ready-made devices in stock, and also explained which companies can perform these tasks.



As promised, today we will answer the important question: “Who is to entrust the production?”. Let us examine the advantages and disadvantages of the three answer options: using your own site, connecting contract manufacturers or working with a single technology partner.

Option number 1. Own production

Firstly, production problems can be solved at the expense of our own production site. The ideal option is to do everything in one factory: produce components, printed circuit boards, housing, realize installation. This decision seems logical. But, unfortunately, this is the utopian approach of the Soviet period.

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However, this does not mean that the idea of ​​own production must be rejected as unrealizable. If we adopt common sense and economic indicators, then a modern and competitive manufacturing enterprise can be organized on our own. For this you will need:

1. Line for the installation of electronic components on printed circuit boards.
2. Workshop for assembling devices.
3. Department of technical control and testing.

Even in this list, you can add a line for the production of plastic and / or metal parts for buildings.



We will not encroach on the production of printed circuit boards and electronic components, let us leave this task to specialized companies.



Naturally, own production imposes a number of requirements and restrictions:

• Huge one-time capital investments in fixed assets (buildings, equipment and technology). Moreover, all this will have to be maintained and maintained in working condition, updated as technology develops. After all, work in a competitive market requires you to carefully monitor and quickly respond to the turns of the technology vector.
  
  
  
  Practical examples: once used lead installation of components on the board, then surface. Over time, the distance between the pins of the microcircuits decreases (strict requirements for miniaturization); the types of cases of microcircuits change (moving from quantitative to qualitative changes). Today it is difficult to surprise anyone with vertical mounting of integrated circuits ( PoP ), this is no longer exotic, but multi-layer switching technology ( 3DS ) is not far off. So, in modern electronic devices one cannot do without BGA cases, which impose additional requirements on the production line and equipment.
  
  

• It will be necessary to purchase or rent equipment for X-ray control, which can cost more than the automatic installation of components.
• It will take a modern center to repair and restore equipment.
• And the most important: the production activity obliges to use this special approach to the management and organization of internal processes, and also imposes full responsibility for the result.

Not only that own production is expensive and has a considerable payback period, but it also diverts resources and leads the company away from the development and promotion of new products on the market.



In which case you can organize your production? The answer is obvious: only with a planned mass and / or long-term release of electronics, i.e. when it is economically justified. In real life, product companies such a situation is extremely rare. Especially considering the current technological requirements for modern electronic products and a relatively short time of their life on the market.



Although we note that in some cases companies are considering the option of their own production for the sake of preserving technical know-how or even for the sake of self-importance and the proud phrase “We have our own production!” (Yes, not modern, small, but own!).

Option number 2. Contract Manufacturers

The second answer to the question “who will produce all this?” Is to contact various contract manufacturers. A distinctive feature of such companies is their narrow specialization, which provides manufacturability and production efficiency in a given price range. Due to this, contract electronics manufacturers successfully operate in a competitive market, improving their technology and production base.



The main disadvantage of this choice is the “scatter” of production by individual companies. The result is a risk of losing the center of responsibility for the product itself and its quality. After all, in this case, the customer himself is engaged in authorial supervision, he is responsible for the result. He has to take on all these questions:

• Selection of contract manufacturers and adaptation of the CD to their requirements.
• Quality control of manufactured components.
• Logistics development.
• The organization of timely delivery of all manufactured components of the future device at the assembly site.
• Quality control of the finished product at the exit.
• Packaging and shipping.

To solve these problems, we need a staff of relevant specialists and experience in building and maintaining optimal business processes.

Option number 3. Single technology partner

The third answer is cooperation with a single technology partner in the field of commercial electronics manufacturing, which will take over most of the project issues, including related tasks, such as development, testing, after-sales service, etc. Independent electronics design centers ( EDS , IDH ) can be such a partner. Unlike contract developers, they specialize not only in design, but also in adapting the design documentation and setting up devices for mass production.



Such broad specialization allows electronics design centers to form flexible schemes of cooperation with customers, integrate into industry-specific ecosystems, and enter into partner networks of developers and suppliers of electronic components. Thanks to this, the companies-owners of the products can outsource not only individual tasks to design centers, but also the entire commercial production project, up to and including technical support for the product throughout its life cycle.



In this case, the responsibility for the result goes to the technology partner, he chooses the production site himself, optimizes the BOM , controls the quality, develops the logistics, etc. As a result, the customer can control the cost of the product and removes a whole list of complex issues (reducing their risks).



The most important thing: this scheme of work allows the company-owner to fully engage in the promotion of its product, the development of marketing strategies, the expansion of the functionality of the device and the further development of its own product line.



Thus, the following criteria come to the fore: the ability to focus on the product, not on production; reduction of potential risks and delegation of responsibility for the result, as well as optimization of costs for organizing and launching production.



Questions and comments are welcome.