How to Choose a Subcontractor Equipment Manufacturer

As a purchasing manager of a manufacturing company you ought toanalise the business environment in which the company operates and identify its relevant needs. On a macro scale the manufacturing industry can be divided into low tech industry (food, consumable, home products and as such) and high tech industry, that includes electronics with its subsidiaries, advanced medical equipment, industrial digital printing, micro-electronics and as such. On the micro scale the difference between the two types of industry is prominent in the precision level, finishing quality, reliability, repeatability and general quality level.

Different manufacturing technologies tailor to different needs:

Milling operation – designed to make high precision parts, good for medium and small runs due to minimal NRE (Non-Recurring Expense). Despite that, the process is characterized as of high price due to prolonged time to manufacture one part and extensive material use.

Stamping operation – Designed to produce relatively small sheet metal parts in high quantity. Even though the NRE can reach between hundreds and thousands of dollars, the cost of producing one part is relatively small. This technology guaranties high quality and repeatability due to the use of dedicated tools. In contrast it is very hard to make complex parts and part modifications, during production.

Casting – Manufacturing technology for complex parts with special design demands that do not require a high level of precision. This technology allows for manufacturing complex parts with relatively good utilization of raw material. Similar to Stamping, this technology requires a significant NRE making the technology feasible for mainly large runs. Casting usually requires additional operation such as milling to bring the part to the required dimensions. Milling is a significant cost addition. Just like the Stamping, it is almost impossible to make modifications once the production started due to technological limitations.

Polymers – this technology is very high on the Non-Recurring Expense scale. Its advantages include the ability to provide design solutions for very unique and complex problems. This field includes areas such as blow molding, extrusion, vacuum forming, composite materials and others. Composite materials stand out as a unique technology that enables the manufacture of parts that must be tough, light weight, high temperature tolerant and live within erosive conditions. It is used mainly in the aviation and military market.

Sheet metal fabrication – This technology utilizes sheets of metal by cutting and bending, to fabricate the outer casings and the inner parts of equipment such as rack cabinets, computer terminals, electronics and such. This technology is suitable for the high-tech industry allowing the fabrication of complex elements with specific finishing requirements. It is optimal for small to medium quantity runs with high flexibility and low cost design changes and modifications. This technology allows the use of special inserts, studs and spot welding which increases further the flexibility in design wile providing better precision, for a lower price. Comparing to other technologies, this options requires lower NRE with lower cost of a single part.

Choosing the best Contract Manufacturer

Choosing the contract manufacturer one ought to consider three main parameters – service, quality and price:

• Service is the ability of the contract manufacturer to become a strategic partner, have  
   flexibility in his manufacturing process and shipments. A good partner is able to learn his
   customer's needs and respond to them.

• Quality of the sub contractor is defined by his compliance with international quality 
  standards, repetition of rigorous quality practices, utilization of top of the line manufacturing
  and testing equipment and the employment of skilled employees.

• The price variation within the sheet manufacturing industry can fluctuate within 30% in favor 
  of the small job shops. Nevertheless, on the long run the tide favors the bigger suppliers due
  to mainly long term pricing policies and the ability to maintain higher quality level over longer 
  time period, and therefore, reducing non conformances and waist.

Recently larger sheet metal manufacturers are able to provide higher quality for lower price

• The manufacturing equipment utilized by larger organizations tends to be suitable for larger
  runs and in general more advanced, more precise and with better repeatability of results.

• A significant advantage of a big company lays in the availability of support staff such as
  planning and control, QC, QA and big engineering departments. This in turn facilitates better
  quality, more professional solutions and ultimately better service.

• A qualified employee is one of the biggest assets of a large contract manufacturer. In large
  organizations it is more common to employ and train more professional employees and  
  keep them for longer periods of time.  These companies are able to provide better working
  conditions and pay for better work force, which translates eventually in better customer
  service.

• Large sheet metal manufacturers tend to purchase better quality raw materials from
  suppliers that conform to international standards. The price issue usually becomes
  secondary in choosing a raw material supplier. Still, more quantity allows for lower prices
  and at times a big company can purchase better raw materials for lower price than a small
  manufacturer buys a lesser material. Better raw materials give the customers a higher
  quality product, with better finishing, strength and other visual aspects.

This article was written by Arie Sharvit, Manager of Sheet Metal Fabrication Operations at Nepcon Manufacturing Technologies, Yavne, Israel.