From Giant Factories to Family Workshops: Suppliers of Every Size



When we’re setting off to make a new hardware device, one of the first steps involves assessing the key technical domains represented in the build. Printed circuit board assemblies (PCBAs), membrane switches, formed & machined metal parts, wire & cable and molded plastics, etc. can all be wrapped up in one device.

Our strategy in identifying a supplier that’s a good fit directs us to select a CM that has more than one manufacturing competence. A factory that’s as close to vertically integrated as possible.

An example is a box build factory that can stuff PCBs, build cable harnesses and stamp out sheet metal enclosures. This class of supplier will be better suited and lower cost than a “screwdriver factory” that purchases every component and sub assembly and simply screws the box together.

While total vertical integration is a terrific goal, it never happens for anything more sophisticated than gases… Never. Ever. Factories large and small have complex supply chains that they must rely on. As a result, you also must rely on their network of suppliers.

The complexity or number of degrees of separation contained in a typical supply chain is astonishing. If you consider something as “simple” as a deep drawn aluminum shell to be used in a consumer product, there are more than twelve suppliers that can be identified that directly effect the product quality: the metals distributor, the tool & die shop that fabricated the deep draw tooling; the centerless grinding subcontractor; the vendor that laser scribes the logo on the shell; the anodizing subcontractor; the pigment factory that supplies the anodizer; the packaging supplier; the laboratory that certifies that the finished shell doesn’t contain heavy metals… It goes on and on.

A multi-layered supply chain requires an enormous amount of planning and due diligence on our part. For high risk products, we need to go “upstream” to carry out due diligence on key components, materials, sub assemblies and processes. This can take us four or five levels and multiple branches up the chain. For lower risk components, we need to verify two to three levels and branches.

Regardless of the geography where we’re working, some upstream suppliers will be small (sometimes very small) and humble in appearance. This doesn’t mean that they’re not very good at what they do – they’re just not architectural showplaces and they may be a bit difficult to communicate or trade with.

So once the principal CM is identified, we dig in and confirm the capability of their vendors and sub vendors. We think that this is good business and worth the time and effort.


Jack Daniels


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