In-house or Outsource: 5 Deciding Factors for Your Next Custom Electronics Manufacturing Project
June 9, 2021
So, what should you consider before you decide to build or buy? Let’s break down the logistics of custom electronics manufacturing project planning.
Build or Buy: Deciding Factors
Anytime you set out to scope a new build, timelines are often grossly underestimated. From limited staff, gaps in expertise, sourcing challenges for specific components, employee vacation, and sick days to fluctuating internal priorities and delays in the supply chain, projects often take longer than anyone had originally planned. And as we all know, time is money. When time spent increases, so do your costs.
However, when you choose to work with an electronics manufacturing partner, your project is the priority. Our attention isn’t diverted elsewhere. We set a fixed cost and a fixed timeline and manufacture locally to guarantee overseas shipment and transit delays don’t cause scope creep, allowing you to strategically plan with an agreed-upon budget and guaranteed delivery date.
Your in-house team may have the skills to build a custom wiring harness or cabinet assembly, but you may not have the proper tooling or automated equipment on hand. Consider what purchases you may have to make in order to complete the project when determining if it’s a worthy investment for you now and in the future. Ask yourself how much use the tools and equipment will get, how long the technology will last, and how frequently updates may have to be made to ensure you won’t lose money in the long run.
Supplies and Components
Custom electronics manufacturers like Electro Soft have existing relationships with local and national suppliers, allowing us to source hard-to-find pieces and custom components at a reduced cost within the U.S.A. Our reliable, cost-effective supply chain allows us to pass the savings on to you and provide guaranteed just-in-time delivery.
In the event you able to source some or all of the required materials from your own established partnerships, Electro Soft will provide you a quote for the labor only, using the supplies and components you provide to complete the build.
There are several variables to consider when estimating the cost of a project. Of course, you need to take into consideration the more obvious costs such as labor, materials, and equipment. However, some costs tend to be hidden and are frequently overlooked.
When calculating labor, one often estimates how many hours a project may take to complete, multiplied by the number of people, multiplied by their hourly wages. But a true cost calculation will take into consideration in-house employees’ benefits, such as health insurance and 401K packages, other compensation such as PTO, and overhead. These expenses hit your bottom line whether you include them in your calculation or not. And affect your profit margins. On the other hand, with an outsourcing partner, your costs are fixed so you can accurately predict your expenditures and profits.
Just like labor costs can fluctuate based on the length of time a project takes to complete, material costs could increase from the planning stage to the execution phase based on demand, location, and shipping. An outsourcing partner takes these factors into consideration from the start. We understand, expect, and scope for variability in material costs and focus on landed costs so your quote doesn’t change before the start of a project or while in progress.
No matter how large or small the project, we can create a custom solution for you. If you’re in that niche group needing $50,000 in volume of a customized design, it is often difficult to get what you need in a timely manner and at a competitive price—unless you partner with us. Not sure we understand the complexity of your project? No problem. We’ll build your first unit for free to ensure every specification is met—just supply the materials!
A Reliable Partner
With more than 35 years of experience crafting custom wiring harnesses, cable assemblies, printed circuit boards, cabinet assemblies, and military electronics, we understand your need for flexible run sizes, transparency, ongoing engineering support, and just-in-time delivery.
Are you considering partnering with a custom electronics manufacturer? Use our personalized calculator to determine if now is the right time to outsource your next assembly!