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Publication Date: 05/1/2009
Archive >  May 2009 Issue >  Electronic Mfg. Services > 

Finding the Right Contract Manufacturer
Technicians visually inspect products in Chinese facility.

From a global recession to new green supply chain requirements to offshore price pressures, OEM manufacturers continually face new supply chain challenges. So how does one choose the right contract manufacturer that will meet price points, streamline supply chain and logistics processes, decrease SKUs and parts inventories, while still meeting the quality and performance requirements customers demand?

Direct contract manufacturers such as Knight Electronics recognize the need for establishing a secure, global source of supply for quality engineered and competitively priced products to support new electrical and electronic design efforts on a global scale, and have been providing virtually risk-free procurement, design,
manufacturing, assembly and shipping services to small, medium and large OEMs for decades. As such, Knight Electronics is uniquely positioned to assess and provide the program support needed by OEMs looking to expand their manufacturing options while controlling their costs.

Overseas Challenges
People interface with tooling, design and manufacturing houses in the Far East for a number of reasons, most of which are underscored by a perception of cost savings. Yet often, sourcing products directly from China doesn't achieve the anticipated cost savings or product quality, not to mention the difficulty people have communicating their precise needs to the contract manufacturer. They may incur extra travel expenses due to the contract manufacturer's location, or face hidden inland transportation charges. In addition, many overseas suppliers have undisclosed financial problems, which can result in delayed shipments. What many people don't realize is that cost savings, with guaranteed quality audits, inspections, lower shipping rates and improved reliability, can be realized right here in the United States.

Because of the challenges faced in engaging with overseas suppliers, many customers are coming back to U.S.-based manufacturers due to problems involving quality, logistics, currency exchange, customs issues and rising shipping costs. Knight Electronics has its own inspectors and engineers in China and Dallas, and is accustomed to solving customers' issues of quality, availability, performance and cost competitiveness. To help keep things simple, Knight quotes all of its customers FOB Dallas, assuming all currency risks and providing a "no risk, no problems" solution.

Streamlined Logistics
With direct manufacturing facilities and engineering locations in Taiwan and Mainland China, Knight provides customers with an easy, cost-effective solution to overseas manufacturing. Among the many problems encountered by companies venturing into Asia for the first time are:

  • Large capital outlays for large quantity shipments.
  • Large minimum order quantities without scheduled release dates.
  • The cost of providing engineers for Asian site inspection.
  • Travel time and expenses.
  • Communication problems.
  • Risks associated with quality issues.
  • Logistics problems associated with shipping, payments and defective product or returns issues.

Knight's program guarantees customers lower cost, higher quality products built to exact specifications and the support of a full suite of shipping options and inventory management programs. Knight's 5PL capability, which was established to meet the growing demand for integrated design, manufacturing, and transportation services, also plays a major role in OEM services. Designed for entrepreneurs, small business owners and other companies who don't have the time or resources required to manufacture or refine the design of their own products; or for companies trying to streamline their supply chain, this 5PL capability provides a complete design, engineering and manufacturing logistics service that minimizes costs for products ranging from an individual component to virtually any electronic or electromechanical system.

Whether it's producing parts at a lower cost or moving mature product lines out of factories to make room for new products, OEMs recognize the need for 5PL services to improve their product designs. Knight has the capability to provide manufacturers with any level of logistics support, from on-site warehousing and vendor-managed inventory programs (3PL); to contract manufacturing and assembly services (4PL); to comprehensive design engineering support, BOM consulting and procurement services through manufacturing, testing, global transportation and customer billings (5PL).

These OEM services also include 100 percent outbound and inbound inspection, online production inspection, in-house assembly and test capabilities, tracing and tracking procedures and worldwide delivery on a JIT (Just-In-Time) basis — all programs designed to increase accountability and reduce expenses to the customer. The company also provides the necessary turnkey programs and services that ensure the highest product quality and on-time delivery including ISO9001-2000, UL, TUV, and VDE qualified facilities.

Full-Service Operation
While most manufacturers are content when the full cost-savings from a successful offshore sourcing project is realized, how else can a manufacturer benefit from a relationship with a 5PL provider? How about product packaging and shipping services directly to the retailer or end-user complete with installation instructions and user manuals? Who needs a warehouse or central distribution hub when the service provider can perform the same function?

Knight Electronics has long recognized the need for establishing a secure, global source of supply for quality engineered and competitively priced products. Whether it be an off-the-shelf fan or a turnkey OEM product or service, Knight's contract manufacturing capabilities — from 5PL to JIT delivery to assuming the risks — aid in reducing customer costs and guaranteeing the highest quality products at exact specifications. Full contract manufacturing services and the most streamlined process a customer could ask for.

Contact: Knight Electronics, Inc., 10557 Metric Drive, Dallas, TX 75243 800-323-2439 or 214-340-0265 fax: 214-340-5870 E-mail: Web:

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