For OEMs making and inventorying electromechanical assemblies, wire harnesses, cable assemblies, or even box-builds in-house, holding too tightly to every aspect of production can be a costly mistake.

The intended benefits of doing all the work in-house must be measured against its costs: higher facility overhead, including additional required inventory, manufacturing space, equipment, trained labor, as well as engineering and purchasing resources.

Too often, such in-house work is not actually the OEM’s area of expertise, but instead a low margin activity that can consume precious corporate resources to little effect.  When the in-house work performed is outside an OEM’s core competency, too costly or cumbersome, strategic domestic outsourcing can cut cost, improve quality, and even speed delivery.

For instance, to focus on its core competency of system design, Evoqua Water Technologies domestically outsourced a junction box electromechanical assembly and wire harness to power its line of industrial water purification modules, according to Rahoul Bhagat, engineering and quality assurance manager at its Lowell, Mass. facility.  The company is a wastewater treatment products, systems and service provider for industrial and municipal customers.

“With lower required overhead, inventory, equipment, manufacturing space and labor training compared to doing all the junction box work in-house, we realised about a 20% overall cost savings and gained the ability to go straight from the sub-assembly to the finished product,” said Bhagat.  “The streamlined process helped us to meet demand for the product line, which grew over 50% last year.”

Overcoming In-House Challenges

When an OEM considers which areas are actually core to its business, and which should be outsourced, producing and inventorying every component down to the smallest electrical wire or electromechanical assembly does not always make the list.

“We didn’t have the in-house infrastructure to build every component and sub-assembly from scratch,” said Bhagat.  “We would’ve had to expand our existing facility or add an offsite location, buy additional production equipment, as well as hire and train specialised labor.  Building all that extra in-house infrastructure would have been too costly and inefficient.”

Technical electrical expertise can be a barrier to doing such work in-house.  In fact, it has been shown that 44% of electronic failures are the result of poor quality control.  Electronic failures due to faulty solder joints, improper wire crimps, nicked or cut wire strands, wrong wire gauges, or unauthorised material substitutions can not only impact the final assembly’s quality, reliability, and durability but also cause delay, taint reputation, and even create serious liability.

“Quality and durability in the field was critical, said Bhagat.  “If the wire were the wrong size, too thin, improperly rated, or had a poorly rated terminal block, it could compromise the junction box assembly, which is unacceptable.”

Evoqua Water Technologies domestically outsourced the junction box electromechanical assembly and wire harness to power its line of industrial water purification modules to Wareham, Mass.-based Electro-Prep a turn-key and consignment contract manufacturer of wire harnesses, cable assemblies, electro-mechanical assemblies, and box-builds.

In looking for a capable supplier of electrical components, it is important not only to choose one that maintains industry standard internal quality assurance and auditing programs but also is subject to regular onsite inspections and outside audits.

“A key element in ensuring quality is assuring the supplier has their ISO 9001:2008 certification (quality and strong process controls),” says Skip Sullivan, President of Electro-Prep.  “Combine this with IPC/WHMA-A-620 training and certification (industry assembly standards), as well as J-STD-001 training and certification (soldering certification), and you have a good idea that your supplier is a true professional that takes their partnership with you seriously.” 

Sullivan adds that UL listing in the U.S., CSA certification in Canada, as well as RoHS (and non-RoHS) capabilities are also increasingly vital designations for electrical components.

According to Bhagat, “When used as intended, we’ve had no junction box failures on our industrial water purification module since we put it in the field six years ago.”

Bhagat credits his supplier for cooperating with Evoqua Water Technologies to produce an improved design.  “Electro-Prep offered a number of ideas for improvement that we incorporated into our design.  For instance, they helped to secure a din rail in the terminal block, preventing a potential quality issue during assembly.  This helped with quality control and manufacturability.”

According to Bhagat, his domestic contract manufacturer has a significant delivery advantage over offshore outsourcers.  By working with them, he avoids the long shipping lead times of typical overseas outsourcing.  He also resolves any issues more quickly, with easier logistics and coordination within the same time zone, language, and culture.

For OEMs looking to expedite delivery on outsourced electromechanical assemblies, wire harnesses, cable assemblies, or even box-builds, working with a flexible partner can be important.  Sullivan, for instance, suggests that OEMs work with a supplier that offers

flexible delivery options such as JIT, rush deliveries, third party drop ships, Kanban (for very short turnaround for ongoing requirements), as well as pull-ins or push outs (without the hassle of unnecessary, additional charges).

“While Electro-Prep typically turns product around for us in four to five weeks, they will rush us product if needed and can supply on a JIT basis,” said Bhagat.  “We’re not relying on JIT delivery now, but it could be useful if we have a further surge in demand or want to further expedite our delivery.  We’ve never run out of parts they’ve supplied us.”

Bhagat said that ultimately, “Domestic outsourcing to a trusted partner helps us stay in control of our process.  By focusing on system design and working on modules rather than many individual components, we leverage our core competency and outsource what’s not core.”