Electronic contract manufacturing, or ECM, is when a company hires another company to make electrical components for its electronic products. A branded smartphone, for example, may have several components that are produced by separate ECM contractors.
In this post, you’ll learn more about how electronic contract manufacturing works and the potential benefits for businesses. We also look at the four main types of manufacturing processes.
In this post:
Introduction to electronic manufacturing services
Electronic contract manufacturing is essentially an outsourcing service and a subset of contract manufacturing. Electronic manufacturing services (EMS) are provided by a company on behalf of another business, which is known as the original electronic manufacturer or OEM.
ECM service providers manufacture a wide range of components, such as printed circuit boards (PCBs), microprocessors, and LCD screens. An electronic contract manufacturer may also provide engineering design services, subassembly manufacturing of parts, and box builds for completed devices. However, they aren’t usually credited or mentioned publicly; instead, the finished electronic products are delivered under the trademark or brand name of the OEM. 
There are many reasons why a business may choose to use electronic manufacturing services. For example, outsourcing can help to lower supply chain costs, especially if operations are outsourced to a country that has lower labour costs and cheaper raw materials. Using an electronic contract manufacturer also gives OEMs greater flexibility when it comes to production and choosing the most cost-effective services.
What’s more, those businesses that outsource the majority of their electronic manufacturing can free up time and resources to focus on research and development, marketing, and specialised products with higher profit margins.
What are the benefits of contract manufacturing?
As we’ve already touched upon, contract manufacturing has several financial and operational benefits. It’s no surprise then that its use isn’t just limited to the electronics sector – a wide range of industries outsource aspects of the manufacturing requirements. Even marketing agencies use contract manufacturing services for interactive assets, such as websites and technology-based business solutions.
Read on to learn more about some of the main benefits of contract manufacturing.
1. Low cost
The overall production cost of manufacturing is significantly reduced with the help of contract manufacturing. There are several reasons for this. For example, using a contract manufacturer reduces or removes the need to store raw materials and maintain manufacturing facilities. It also means businesses don’t have to spend money on constructing new facilities or buying new equipment. Outsourcing can help to keep labour costs down too as OEMs may not have to hire additional staff.
2. Time efficient
When you enter into a contract manufacturing agreement, you can negotiate the turnaround time and set delivery dates. If the contract manufacturer fails to deliver on time, you can impose a fine or even cancel the contract. The terms and conditions will often motivate the contract manufacturer to be time efficient.
Typically, contract manufacturers have calibrated and optimised their facilities to produce certain volumes of orders within a specific timeframe. If you’re looking for a contract manufacturer, be sure to compare their turnaround times to find the best option for your business.
3. Reduced labour
Outsourcing your manufacturing requirements often means there’s no need to hire new employees. Managing a workforce can be very costly and time-consuming – contract manufacturing can help to remove this expense and free up valuable time because your electrical components will be produced by the ECM provider’s existing staff. 
4. High quality
Comparing a range of contract manufacturers will allow you to find one that provides the best service and top-quality products. Before entering into an agreement, always do some background research and ask for sample products to test the quality.
Many contract manufacturers are focused on specific categories of products or components and will have already mastered the manufacturing process for optimal results – for example, at ReAgent we provide chemical contract manufacturing services.
What are the four types of manufacturing processes?
Whether it’s fabricating small components such as PCBs or assembling large automated systems, B2B electronic contract manufacturing involves several different processes.
These electronic manufacturing processes can be classified into four main types: joining, machining, shearing and forming, and casting and moulding.
1. Joining
This involves soldering, welding, and gluing either similar or dissimilar parts. Joining allows for various types and configurations of materials to be assembled into one functioning product.
For example, electronic components can be soldered onto a printed circuit board during the assembly of electronic products like mobile phones. An ECM company may specialise in assembling circuit boards with a particular design or configuration.
2. Machining
Machining involves delicate or highly detailed work using solid materials such as metal sheets. It can be divided into three types: drilling, milling, and turning. A CNC (computer numerically controlled) machine is typically used to manufacture a variety of machined parts, casings, and other solid components from sheet metal or blanks. 
3. Shearing & forming
Some materials, such as aluminium and plastics, are pliable enough to be easily shaped in several ways depending on the application or products required. Shearing and forming manufacturing processes typically involve cutting, bending, and extruding materials to form the desired part or component.
4. Casting & moulding
Unlike shearing and forming, the casting and moulding process involves high temperatures. The material is melted and then shaped into the desired configuration using a mould. For example, the plastic casings on laptops are manufactured through a process called injection moulding.
Why choose EMS?
There are many reasons why you might want to choose electronic manufacturing services. As we’ve already explored, outsourcing your electronic manufacturing requirements can:
- Reduce your overall costs and optimise your profits
- Help your company to become more efficient
- Produce higher quality products
- Free up time to devote to growth and innovation
Summary
Electronic contract manufacturing (ECM) is when a business hires a manufacturer to produce the electronic components it needs. This business model can be a good choice for companies that are seeking to improve their productivity and profitability. As well as relieving the burden and expense associated with in-house manufacturing, ECM services can give you an advantage over your competitors.
