How pairing your EMS with a logistic provider unlocks growth at every stage

Electronics Manufacturing Service (EMS) providers promise specialized knowledge, technology, and a vast supplier network to help electronics manufacturers streamline production with consistently high quality. But they don't necessarily offer the best solution for all manufacturing needs, especially in time-sensitive circumstances.

In fact, EMSs provide solutions for scaled manufacturing, but most don't have the infrastructure to provide timely prototype builds. This radically limits agility in the early stages of design and often delays product launches.

The solution isn't entirely replacing your EMS. Instead, the most effective way to address these limitations and ensure smooth, profitable growth is by pairing your EMS and CMs with a logistics provider.

Production needs change at every business stage

Every company needs flexible, efficient, and cost-effective tools to meet demand with reliable production volumes. While EMSs are the primary solution manufacturers turn to, they often fall short in providing the data visibility and production capacity needed to navigate every manufacturing challenge, especially when timeliness to market is critical.

By using your EMS alongside a logistics provider, you can build a resilient supply chain that supports all of your manufacturing needs. Here's how to make the most of both partners at every growth stage.

Companies at the prototype stage need to get to market fast

If you're weighing the benefits of an EMS over a Contract Manufacturer (CM) when preparing to launch a new product, it's safe to say an EMS likely poses more issues than it's worth. Early in product development, companies require quick iterations to generate revenue through a smooth, speedy launch. While an EMS's promise to offer stability at scale makes it an attractive partner, its large production lines are not suitable for low MOQs. Even more, most EMS providers prioritize businesses with larger production volumes, meaning smaller customers often don't get the same level of support as a higher-volume customer.

On the other hand, since companies prototyping typically require rapid iteration and low-volume batches of products that don't meet the financial targets of an EMS, many turn to a quick-turn contract manufacturer (CM) to hit their goal. A CM has the infrastructure to build prototypes in days or weeks and launch without breaking the bank. The only issue — it doesn't guarantee timely go-to-market or long-run scalability.

CMs often cause production delays when parts become unavailable due to their limited supplier network — and with limited storage for your leftover parts, this can easily snowball into additional financial losses for your team.

The requirements of your product might not be entirely achievable by a CM. For example, a CM's network of distributors and parts vendors doesn't always meet your component needs. This often leads to an exception report of materials that you'll have to source elsewhere. If you haven't stockpiled these materials, long factory lead times or, worse, unexpected obsolescence in your components could delay production or require changes to your design to accommodate these disruptions.

Even when production goes well, a CM is unlikely to provide the supply chain visibility needed for resilient, scalable designs since their focus is traditionally on quick-turn manufacturing. Without knowing which parts are available in large quantities, a company might choose one that frequently goes out of stock for its early-stage, high-compliance prototypes. Finding an alternative part could require re-certification of design, setting the product launch weeks or longer behind schedule.

To avoid the downsides of your CM's supplier network and limited supply data, partner with a logistics provider like Cofactr. By working with a logistics provider, you can:

• Easily inform your design process: Logistics providers like Cofactr provide detailed supply data for every part, empowering engineering teams to make informed decisions early in the design process on topics like parts selection or just-in-case inventory practices.
• Quickly iterate prototypes at all times: Thanks to their broad supplier networks and flexible lead times, logistics providers can source the parts you need in days.
• Secure profitable growth: Picking the right, widely accessible parts during the design process with your logistics provider's flexible sourcing options creates a clear path to scale cost-effectively.

The best way to manage your production across your logistics provider and your CM is to use the former as a total turnkey solution and release complete material kits to the latter. This minimizes the risk of supply chain disruption during the early stages of product development to effectively grow manufacturing volumes.

Low-to-mid-volume production companies prioritize production growth 

When companies' product design and demand become more predictable at quantities hitting multiple millions of dollars of spend, partnering with an EMS can help efficiently scale production with maximum profits.

EMS providers' high-MOQ production lines and specialized workforce make it easy to handle large production runs with consistently high product quality. Plus, EMS providers pre-purchase parts in bulk to accommodate large production volumes, significantly reducing material costs and further increasing manufacturers' profitability.

However, these benefits come at a cost. EMS providers can give preference to their biggest clients during supply chain shortages, leaving smaller businesses scrambling to source critical components and build products on time.

Let's say there's a market stockout for a part that multiple companies need from your EMS. You might be a growing brand with a significant number of units. However, your EMS is still likely to allocate any parts as they become available to the biggest contract since that generates the most revenue for them. If you're not that contract, this limits your control over the manufacturing process, hurting your ability to reliably produce enough units to meet demand.

A logistics provider like Cofactr helps you reap the benefits of your EMS partnership without worrying about the supply of essential components. To scale production with lower costs, let your EMS pre-purchase and manage the parts in your BOM that rarely run out of stock. Monitor essential components to ensure you can continue your manufacturing processes with other partners if any unexpected supply conditions occur. Then, work with your logistics provider to source and manage critical, long-lead, high-cost parts. With a tool like Cofactr, this process includes:

1. A unified platform to upload your BOM and select the parts you need to purchase
2. A summary of your sourcing options, providing flexible lead times, prices, and pre-vetted suppliers to choose the ones that best suit your needs

By allocating different parts from your BOM based on supply chain risk, you combine the efficiency of an EMS with the security of a logistics provider — everything you need for profitable growth.

High-value production companies aim for cost savings and internal optimization

Electronics manufacturers need critical data, such as parts on hand, total inventory value, and lead times for parts on order, to make informed decisions about new and existing products. This is especially true for high-compliance or high-value electronics manufacturers whose product demand fluctuates in both design and volume.

These product manufacturers focus their efforts on driving cost and production efficiency. To achieve these goals, they rely on their EMS for sourcing and manufacturing due to its higher volume capacity and significantly lower purchase and production costs. This strategy keeps your processes smooth and your business competitive – but, as we reviewed, it can hinder strategic growth. Most EMS providers offer limited supply chain visibility and flexibility, leading to costly design and workflow adjustments.

To alleviate this issue, some manufacturers move to smaller EMS providers which may provide better inventory visibility. However, transferring existing materials to a new EMS without comprehensive part data could halt production for an indefinite period of time. Consider the case of an industrial equipment manufacturer that tried moving parts to a new EMS and discovered its stock was split across three different continents. The company was then forced to postpone production and pay costly tariffs to complete the part transfer to the new EMS.

To drive high cost and production efficiency with granular visibility, logistics providers like Cofactr offer detailed insights into BOM, inventory, and global supply chain data — all in a single platform. This allows you to make informed decisions about design changes, new products, and workflow adjustments, setting up your EMS partnership for success.

With Cofactr, you can:

• Leverage data from major distributors and receive supply chain alerts on limited part availability to arrange timely pre-purchases through your EMS
• Ensure accurate internal part numbers and custom parts data to easily find the best alternative parts based on current usage and part specifications

This way, you can continuously monitor your supply chain and avoid disruptions while outsourcing part purchases and production to your EMS.

Get your manufacturing needs met at every stage

With Cofactr, your organization gains a logistics provider that supports your business at every stage.

Cofactr provides everything you need to ensure smooth, efficient scale and strategic manufacturing decisions with:

• Access to every major distributor and hundreds of other suppliers
• Flexible lead times and pricing for time-critical parts
• A unified view of BOM, inventory, and global supply chain data

Discover how to achieve all your business goals by getting started with Cofactr today!