micro-Manufacturing: Assembly on a Small Scale
An introduction to the micro-manufacturing process
Small-scale manufacturing of electronics presents a unique set of challenges and constraints, both practical and economic. The particular challenge for 'micro-manufacturers' is that their products often fall in between the point where manual assembly is feasible, and the point that outsourcing the entire assembly process is financially sound.
What's wrong with outsourcing?
Nothing, if you can afford it and have the time and money to ensure that the outsouring process doesn't fall into common pitfalls. Outsourcing assembly is often the most convenient option from a practical point of view, but unfortunately it only tends to be viable with a few hundred units to a thousand or more (depending on profit margins, complexity, etc.). Outsourcing assembly may remove a certain number of tasks and reduce the amount of money you need to invest in your own assembly equipment, but there are a number of hidden costs that will be incurred to monitor the outsourced assembly process and detect problems early enough to solve them in a cost-effective manner.
Contrary to what some people might expect, it isn't always cheaper to outsource assembly to China and competitive European or North American alternatives exist. A 'local' company will certainly charge more, but the language barrier and ability to address and resolve problems at the appropriate moment needs to be taken in account as well. A return trip or two to Shenzhen can add up quickly, not to mention time and money lost when a faulty prototype is received. Our own experience is that the cost difference between a competitive European company and a Chinese assembly house is typically in the area of 10-25%. That's not an insigificant savings, but the risks and financial burdens need to be carefully weighed before deciding one way or the other.
The main financial burden with outsourcing assembly isn't just the labour and setup fees associated with the process, though ... it's that you will also be obliged to pay for all of the parts at once for the number of boards required, which can be a real financial burden when you are getting started. For example, you may only project selling 50-75 of a specific product in one quarter, but if outsourcing assembly only becomes cost-effective at 250 units, you will need to purchase all of the parts for 250 boards at once, meaning you may not see a profitable return on the investment until the third quarter or so. If you are a small business just starting out, even a few thousand euros extra can make a very big difference, and six months can be a very long time to see an initial return on your investment.
What alternatives are there?
While any 'solution' needs to take into account the specific constraints of your own products and situation (liquidity, profit-margins, product complexity, financial risk, parts-cost, etc.), bringing certain parts of assembly in house may be advantageous in certain situations, such as the context above where it's not financially feasible to manufacture 250+ copies of a product when you only anticipate being able to sell 50 or so per quarter. "In-housing" activities poses, of course, it's own burdens and risks, but we'll present here an overview of our own small scale manufacturing and prototyping facilities to give an overview of what is required, minimally, and compare the advantages and disadvantages versus outsourcing assembly.
The micro-Manufacturing Process
There are eight main steps involved in the assembly of any electronic device or component: they're exactly the same steps any outside assembly company will follow themselves. We'll explore each of these steps, and try to analyse some of the costs, risks, burdens and benefits associated with them. Click on the steps below to continue: