Hi All!

I've was asked by one of our sales people if I could give some information on
why it makes sense for an OEM to outsource assembly vs. starting your own
manufacturing capabilities. Obviously, this deals with printed circuits...

I've done a lot of searching, and have some good info, but I thought I would
ask you all for your opinions to add to the mix...

Generally, the reasons I've found come down to dollars, and core compentcies.
That is, a company may be very good in designing products, but lack the
facilities to produce the products they design efficiently. Where is the line
that you decide to invest the capital in automation, or doing the
manufacturing yourself to produce what you've designed, or just simply
outsource it?

I know this is a very ambiguous question, a lot depends on product volume,
complexity of assembly, and a million other factors...

One of the big examples I've found on the NET is Compaq computers, once a OEM
making everything themselves, practically everything is outsourced now...they
shut-down a beautiful manufacturing facility in Texas...but, they went from
almost falling behind Dell, to surging ahead to #1 in PC suppliers and
turning a profit...

Just interested in your thoughts...

-Steve Gregory-

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