When you’ve had an electronics supplier for a long time, you often don’t notice that the service and product quality are no longer what they used to be. When you first sign an agreement with a manufacturer, the service, quality and prices tend to be great — after all, the manufacturer wants to retain you as a customer. Over time, even the best partners can take you for granted.
As long as there are no pressing issues, you might stay with an existing supplier because it takes time and money to make a switch. That kind of attitude can affect your own business with declining competitiveness, lower profits, and reduced productivity. An evaluation of your supplier relationships can show you where you have to make changes. Below are five areas to check to find out if you should switch to another manufacturer for your electronics.
1. Prices Have Been Increasing Beyond the Rate of Inflation
Comparing your electronics price increases to the rate of inflation is an easy first step to see if your electronics manufacturer is charging too much. Supply chain issues in the wake of the pandemic could be a factor at play, however, so it’s important to have frank conversations with your partners to understand the root causes for price hikes.
Don’t forget to check how much you’re being charged for order modifications. Requirements often change after an order is placed. If you’re paying a lot for minor changes, start checking pricing in more detail.
Talking to other potential electronics manufacturers can give you a good idea of what to reasonably expect. Electronics are highly complex and don’t always trend with the broader market, even if the prices of some input materials have gone up. Getting some competing quotes for the components you’re contracting for can give you a good idea of whether you are paying too much. If the quotes point in that direction, it’s time to make a change.
2. Poor Communication With Your Manufacturer Is Impacting Your Customers
Normally, there is a continuous flow of orders and deliveries between you and your electronics manufacturer, but there are often questions that require a fast response. You might want to change a spec or re-schedule a whole delivery sequence. You need answers and it takes excellent communication for you and the electronics manufacturer to work together and find the best solutions.
Good communication means fast response times and a problem-solving approach. If your current electronics manufacturer doesn’t answer your requests in a reasonable amount of time, you can’t solve problems effectively. If they sidestep questions or drag their feet, that poor communication will make it harder to service your own customers well. In that case, a change is overdue.
3. Sub-Par Product Quality Is Hurting Your Reputation
If you differentiate your products based on quality, they have to be better than anyone else’s; even if your marketing strategy revolves around low cost, your product quality has to be adequate. Any deterioration in the quality of the components you’re supplied with will eventually result in higher costs and fewer orders from your customers.
There are several signs that the quality of the parts your electronics manufacturer ships to you is decreasing. If you perform an incoming materials inspection, you may find that an increasing number of electronic parts fail to satisfy the specifications. Your manufacturer may recall products more often. Your own products can start failing in the field or be returned more often by customers. If products supplied by your electronics manufacturer are at the root of these problems, it’s time to find a new one.
4. Late Deliveries Cause Additional Costs and Canceled Orders
Increasing lead times can be a problem for scheduling deliveries of your own products, but inconsistent or late deliveries are even worse. When you can’t meet the delivery times required by your customers because the electronics take too long to make, you may end up losing orders. If your production line has to stop because a scheduled electronics delivery hasn’t turned up, costs can be high.
If you’re noticing late or unpredictable deliveries, check with your electronics manufacturer to see what problems they are experiencing. It could be due to supply chain disruptions that are largely out of their control. On the other hand, your manufacturer could be taking on too many orders or mismanaging their obligations. Perhaps they have bigger, more lucrative orders from other companies — or maybe they’ve become disorganized. Not all of these reasons will be obvious to you, but if you’re dissatisfied with their excuses, it may be time to switch to another manufacturer.
5. Your Electronics Manufacturer Doesn’t Work With You on Current Issues
When issues like those listed above crop up, your electronics manufacturer will often show their true colors. If the problem is their fault, they should propose solutions at their cost, and together you can agree on a way forward. When problems come from outside and it is not their responsibility, they still need to work with you to minimize the damage or inconvenience for all parties.
Working with you in this way is an ongoing process that can cement a good partnership. When they are responsive to the needs of your company, you can sometimes make allowances for them. If your electronics manufacturer is tight-lipped when you’re facing difficult obstacles, you should probably get a new one.
Work With an Electronics Manufacturer That Delivers on All 5 Issues
You don’t want to switch electronics manufacturers because of one mistake or a couple minor issues — businesses are made up of flawed human beings, and some issues trace their roots to things that are out of the manufacturer’s control. Plus, finding a new manufacturer takes time and money. That said, when problems in some of the fields listed above pile up, you’ll have to take quick action to avoid any negative impact on your business.
You can find electronics manufacturers from referrals or their websites. Look for a U.S.-based manufacturer focused on sourcing supplies from the U.S. as much as possible to minimize supply chain issues. Look for reviews of work carried out for other customers and arrange for a factory visit or virtual tour of their facilities. If all goes well, you can select a new electronics manufacturer who can explain exactly how they will deliver the electronics you need.