Electronics Manufacturing

Did you know that semiconductor manufacturing got its start in 1874? That’s the year a young physicist named Karl Ferdinand Braun touched a thin metal wire to a galena crystal, creating an electrical current that flowed in only one direction. He’d discovered the rectifier effect. But it wasn’t until 1947 that John Bardeen and Walter Brattain at Bell Laboratories invented the point-contact transistor. A year later, William Shockley developed the junction transistor. The work of these three American physicists was so significant that in 1956 they were jointly awarded the Nobel Prize. By then the semiconductor industry was growing rapidly, and with the invention of the integrated circuit in 1959, semiconductor manufacturing entered the modern era.

Since the late fifties, the demand for semiconductors has grown steadily, though the supply chain has experienced occasional hiccups, especially in recent years.

The Pandemic’s Effect on Semiconductor Manufacturing

The semiconductor supply chain was fragile even before the pandemic. The trade wars between the U.S. and China (beginning 2018) and Japan and Korea (beginning 2019) set the stage for what would be several years of supply chain turbulence in semiconductor manufacturing. The chip shortage escalated in the following years, fueled by natural disasters and weather disturbances at home and abroad, in addition to multiple semiconductor plant fires in Japan.

Then the pandemic hit.

Today it’s generally believed that the automotive industry was the sector that suffered most from pandemic-caused chip shortages. Less well known is the fact that—initially—the pandemic actually created a glut of chips destined for cars. That’s because, as lockdowns became common, workers holed up in home offices and let their cars idle. This decreased need for transportation, and the subsequent car manufacturing plant closures, led to decreased demand for semiconductors in the automotive industry.

At the same time, the rise in remote workers, at-home students, and other individuals stuck at home led to increased demand for notebooks, tablets, and entertainment devices like smart TVs and game consoles. Likewise, telecommunications providers and hyperscalers—large cloud service providers such as Amazon, Microsoft, and Google—needed more chips to keep up with the public’s increased demand for online work and entertainment. Fortunately, because of the downturn in the car industry, electronics companies were mostly able to get the semiconductors they needed by turning to the supply of “leftover” chips from the auto industry.

According to McKinsey & Company, 37 percent of the world’s semiconductors were manufactured in the United States in 1990. Three decades later, only 12 percent are. The result is that U.S. companies are now highly dependent on chips made abroad.

Eventually, however, lockdowns ended and the demand for cars took off. At that point, carmakers began buying all the chips they could get their hands on. Electronics manufacturers now had to compete with the auto industry for these essential components.

Chip Shortages Affect Electronics Manufacturers

The semiconductor shortage was further complicated by innovation. Even during difficult times, electronics manufacturers continued to develop new technologies, many of which relied on even more chips than their predecessors. Added to this increased need were several global factors. Geopolitical tensions spurred some countries to stockpile semiconductors. And extreme weather events negatively impacted the chip supply.

This global chip shortage affected manufacturers of all kinds of goods, from light switches, cell phones, and appliances, to medical devices and military equipment. Semiconductor manufacturing was experiencing unprecedented demand, just as hoarding and supply disruptions were growing. Prices rose accordingly.

And at this point, Congress stepped in.

The Creating Helpful Incentives to Produce Semiconductors and Science Act (CHIPS Act)

According to McKinsey & Company, 37 percent of the world’s semiconductors were manufactured in the United States in 1990. Three decades later, only 12 percent are. The result is that U.S. companies are now highly dependent on chips made abroad. While the U.S. semiconductor industry still maintains high market share in sectors that are R&D intensive (electronic design automation and core intellectual property), activities that are more capital intensive (wafer fabrication and assembly, testing, and packaging) are largely concentrated in Asia.

Recognizing the importance of a stable domestic supply of semiconductors, in 2020 a bipartisan group of lawmakers introduced the CHIPS Act. Passed in July 2022, the goal of the CHIPS Act is to encourage companies to bring manufacturing back home to the United States.

Goals of the CHIPS Act

The CHIPS Act is a $280 billion spending package passed by Congress to support domestic semiconductor manufacturing. It also authorizes federal science agencies to pursue policies that encourage domestic production. Approximately $50 billion of the spending is earmarked for direct investments in semiconductor manufacturing. The rest will be used for R&D, engineering and math programs, workforce development, and tax credits to spur private investments.

The CHIPS Act has three main objectives: stabilizing the domestic supply chain of chips, boosting American economic competitiveness, and protecting semiconductors from sabotage during the manufacturing process.

Stabilizing the Semiconductor Supply Chain

A manufacturer may have a reliable workforce, sufficient capital, and a well-constructed business plan. Yet without the essential components to manufacture products, business as usual will come to a grinding halt. Too many industries in the past several years experienced this scenario firsthand. By bringing semiconductor manufacturing back to U.S. shores, many uncontrollable supply chain variables—such as international politics and the effects of overseas natural disasters—can be eliminated.

Boosting America’s Ability to Compete

The CHIPS Act includes financial incentives designed to entice American firms to increase their share of global semiconductor manufacturing. The Carnegie Endowment for International Peace predicts that these incentives will spur U.S. manufacturers to grow their capacity significantly. New funding may even encourage innovation in downstream industries such as advanced wireless devices and artificial intelligence.

New research and development initiatives are especially important for the industry, as Moore’s Law—which states that the number of transistors on a chip will double every 24 months—is slowing. Cramming more and more transistors into the same space is becoming increasingly difficult, and therefore more expensive. With the cost of fabrication rising and the number of firms with advanced technical expertise shrinking, the semiconductor sector is at risk of stalling out. This is the scenario that the CHIPS Act aims to avert.

While the CHIPS Act focuses on technology, a welcome companion to America’s bid to become more competitive is the increase of jobs on American soil. The Department of Commerce estimates that the semiconductor industry will need an additional 90,000 workers by 2025.

Reducing the Risk of Sabotage

Semiconductors are at risk for sabotage at several stages of production. For example, a hostile actor could alter manufacturing recipes or manipulate the sensors used for performance testing. After the manufacturing stage, security risks continue as chips are transported globally.

With the most reputable manufacturers—such as Intel, Taiwan Semiconductor Manufacturing Company (TSMC), and Qualcomm—the risk of sabotage is lower. These manufacturers have the resources to invest in security and a reputation to maintain with customers. The risk increases, however, with less reputable companies, especially those who are beholden to national governments overseas. These companies may willingly, or through coercion, partner with a government or private entity to commit sabotage.

By bringing semiconductor manufacturing back home—all facilities funded through the CHIPS Act must be located in the United States—it’s hoped that plants and products will be less vulnerable to sabotage. The assumption is that sabotage on a facility-wide scale will be harder to conduct under the watchful eye of U.S. counterintelligence officers and under U.S. laws, which give federal agents the power to investigate irregularities. Of course, every facility, no matter its location, remains vulnerable to remote cyberattacks and traditional espionage. But siting plants on domestic soil should reduce these risks considerably.

What is the Future of Semiconductor Manufacturing?

According to International Data Corporation (IDC), the semiconductor market declined slightly in 2023 as demand continued to stabilize. In 2024, the market is expected to fully recover, and IDC predicts an annual growth rate of 20 percent. Some of this growth will be due to the demand for more AI integration with personal devices, such as smartphones, PCs, and wearable devices.

AI integration and other demand factors aren’t just pushing manufacturers to increase production; these factors are also driving innovation in chip technology. As mentioned, it’s becoming increasingly difficult to improve transistor-based technology by packing more transistors into a tighter space. So now researchers are exploring an alternative approach: replacing conventional transistors with quantum-dot cellular automata (QCA), a new technology that relies on mixed-valence molecules.

What are the advantages of QCA? According to a study published in the Journal of Computational Chemistry, QCA provides “a low-power computing paradigm that may offer ultra-high device densities and THz [terahertz]-speed switching at room temperature.” While current traditional gigahertz technology processes at billions of cycles per second, terahertz technology is capable of trillions of cycles per second—1,000 times faster.

Emerging technology and consumers’ ever-growing demand for electronics will likely continue to fuel the rise in demand for semiconductors, making it more important than ever to ensure the supply chain is stable. Fortunately, with the support of the CHIPS Act, the outlook for a steady and reliable domestic supply is favorable. That’s good news for electronics manufacturers, who are now better positioned to keep their products in stock and competitively priced.

An Electronics Manufacturing Partner You Can Rely On

At PRIDE Industries, our U.S.-based, state-of-the-art facilities minimize your risk of supply chain disruption, optimize manufacturing and fulfillment processing, and provide flexible, on-demand inventory schedules. And our inclusive workforce—about 50 percent of our employees have a disclosed disability—means that working with us allows you to make a positive social impact with your business spend, while meeting consumer demand for products made in the USA.

Learn More

When chefs create a signature dish, it isn’t a willy-nilly process. If they want a consistent product every time, they must first develop a recipe—one that lists all the ingredients needed, quantities, and clear instructions for assembly. Electronics manufacturers are a bit like chefs. When building a product, they can’t just “wing it” and hope everything comes together correctly. They need a proper recipe for manufacturing, i.e., a well-developed bill of materials (BOM).

The Critical Functions of Your Bill of Materials

A robust bill of materials outlines the components and materials required to manufacture your product and provides instructions for assembling those items. It acts as a centralized source of information about your product’s design and constituent parts. A thorough and accurate BOM is especially important when multiple parties are involved in the manufacture of your product, in order to ensure effective communication and avoid manufacturing missteps. Sharing an outdated BOM with your contract manufacturing partner can lead to unnecessary mistakes and product launch delays.

Depending on your product and its specifications, you may need multiple BOMs, as they serve different purposes. Two of the most common types of BOMs are the engineering bill of materials (EBOM) and the manufacturing bill of materials (MBOM). These two types of BOMs work together in the following way:

Engineering Bill of Materials (EBOM)

An engineering bill of materials is a product recipe structured from the design standpoint. Typically created by engineers using computer-aided design (CAD) or electronic design automation (EDA) software, an EBOM states the exact quantities of each component inside the product but does not reflect all the materials consumed to make the product.

By laying out an easy-to-follow, detailed plan, your BOM makes the entire manufacturing process more efficient and accurate.

Manufacturing Bill of Materials (MBOM)

A manufacturing bill of materials is based on a product’s EBOM, but focuses on the manufacturing process itself. Whereas an EBOM is created with design in mind, an MBOM looks at the total amount of each input needed to bring a design to life. As an example, if your product requires 10 grams of aluminum, an EBOM would list only the 10 grams required in the finished product. But an MBOM would take waste into account, and note that making the product would in fact require, say, 11 grams of aluminum, with one gram lost to scrap during manufacturing. Note that because the MBOM is derived from the EBOM, if your figures are off in your EBOM, you will also have errors in your MBOM.

What to Include in a Bill of Materials

Almost all products will require a BOM for effective manufacturing and supply chain management. However, the level of detail provided by a BOM can vary based on the industry, the product’s complexity, or a third-party manufacturer’s requirements. BOMs for electronic products can be particularly complex, and will typically include all or most of the following 13 descriptors:

Part Number: A unique identifier for each component.
Part Name: A unique name for each part for easy identification.
Description: Details about each part to ensure clarity.
Quantity: The number of each component required for one unit of the product.
Unit of Measure: The specific unit used for quantity, i.e., meter, pound, etc.
Reference Designators: The specific locations on the product where each component is used—for example, where the part fits on your printed circuit board assembly.
Materials: Information about the raw materials used for each component.
Cost: The cost associated with each component, used to calculate total production cost.
Suppliers/Procurement: Information about how each component is purchased or made, as well as the suppliers providing each component.
BOM Level: An assigned number to detail where each part fits in the hierarchy of your multi-level BOM. For example, your product’s PCBA would be on one level, and the components of the PCBA would be on a more detailed level of the BOM hierarchy.
Phase: Where each part is in the manufacturing process, i.e., in production, unreleased, or in design.
Lead Time: The time required for each component to be delivered.
Assembly Instructions/BOM Notes: Steps for putting together the final product and any other helpful guidance or information.

The Advantages of Using a Bill of Materials

By laying out an easy-to-follow, detailed plan, your BOM makes the entire manufacturing process more efficient and accurate. It can be a critical tool for optimizing these three aspects of your product’s manufacture:

Planning

A BOM will help you plan your material requirements as well as the purchase details of your product’s raw materials. With an accurate estimate of material costs, you can reduce waste, as well as delays and other problems that can be caused by material shortages. Your BOM can even help you meet regulatory compliance requirements—a crucial benefit for highly regulated industries such as aerospace, defense, and medical technology.

Management

A well-structured bill of materials can help you control your budget through efficient inventory management. It will also help you maintain accurate records to stay alert to material shortages and allow for planned and unplanned downtime. With a good bill of materials, you’ll be less likely to encounter surprises and more likely to stay on schedule.

Process Improvement

There’s always room for improvement in your manufacturing processes, and a BOM can play an important role. The increased clarity a BOM brings can help you improve your supply chain security, identify the cause of a product failure, and find vulnerabilities in both hardware and software components. Identifying errors, vulnerabilities, and failures promptly will help you replace faulty components quickly—saving money and time and even preventing the failure of your product.

Five Common BOM Management Mistakes

Time-to-market demands can make it tempting to cut corners with your BOM. But in the end, that approach will most likely lead to wasted time, lost money, and shortages of essential parts. As you prepare your BOM, make sure you don’t fall victim to any of these five common mistakes:

Missing Components

Important components or parts are inadvertently omitted from a BOM in multiple ways. Data loss during export is the most common one. Another path to inaccuracy is human error: designers and engineers can forget to add essential components to the list, or team members may incorrectly enter data. This is why clear communication among product teams is so important. The better your company’s teams collaborate—and any third-party partners—the more likely you are to catch these errors at an early stage when the cost and effort to fix them is minimal.

Costing and Component Mistakes

Ideally, components and their costs should be checked early in the planning stages. Not only is choosing the wrong component costly, it can also lead to the failure of your product. Here’s where an experienced electronics manufacturing service (EMS) provider can make a real difference, as it can identify and source well-priced, quality components and alternative ones, just in case.

Inadequate Documentation

While a list of your parts and sub-components is essential to a BOM, it’s not enough. It’s also important to include the documentation needed to support the manufacturing process, such as material specifications, assembly instructions, or safety information. Failing to include adequate documentation could result in increased safety risks, decreased product quality, material waste, and lost revenue.

Quantity Mistakes

No one wants to have production come to a standstill over missing parts. Likewise, no one wants to pay for and store ten times the needed inventory simply because an errant 0 got tacked on to an order quantity. Miscalculations, data entry errors, and sloppy inventory management can all lead to quantity mistakes. Multiple reviews of your BOM by multiple sets of eyes can help avoid these errors. Likewise, product lifecycle management software can help eliminate these BOM mistakes.

Insufficient Coordination with Your EMS Provider

With proper coordination, your EMS provider can save you time, money, and hassle. But to reap these benefits, thorough and accurate communication is critical. Ask your EMS provider about their preferred BOM format. Do they prefer Excel (or at least an Excel-friendly file)? Do you both share the same product lifecycle management software? If the BOM you provide your partner is just text or graphic, they will likely need to manually enter your data into their system—an extra step that could create data integrity issues.

Your Recipe for Success

With a thorough BOM that leverages the advantages above and avoids common mistakes, you are well on your way to creating a customer-pleasing product. Communication with your partners will be smooth and efficient, and production delays will be minimal. Best of all, by taking the time to create a refined, robust BOM, you’ll have a recipe for manufacturing a high-performing product.

Your Smart Manufacturing Partner

Are you looking for an electronics manufacturing partner to help you design a more efficient product, streamline your supply chain, and improve your production processes? Whatever your needs and priorities, PRIDE Industries can help you reach your manufacturing goals.

Learn More

The overall forecast for the medical device industry is overwhelmingly positive, with an expected global revenue of $595 billion in 2024. The healthcare sectors driving the most growth in the medical device market are:

Cardiovascular
Orthopedic
Neurovascular
Urological
Diabetes

The growing prevalence of chronic disorders—including cancer, diabetes, and infectious diseases—is driving an increase in diagnostics, testing, and monitoring that not only calls for more medical devices but also greater product innovation. Here are the top six medical device industry trends of 2024.

Trend #1: A Rise in Digital Therapeutics and At-Home Diagnostics

The popularity of digital therapeutics (software-based medical devices) skyrocketed during the pandemic and shows no signs of slowing down. These devices are typically AI-based and used by clinicians to virtually treat, manage, and prevent a wide array of diseases and disorders. The U.S. market for digital therapeutics is anticipated to have a compound annual growth rate of 29.8% between 2020 and 2025.

Like digital therapeutics, at-home diagnostics empower patients to take their health into their own hands, but the latter are designed specifically to diagnose potential conditions or diseases. Many people have become accustomed to at-home testing for the COVID-19 virus, and there are opportunities for at-home diagnostics beyond COVID testing. We will likely see increased proliferation and adoption of these self-tests to assess a variety of health conditions. This trend is directly related to the second trend we anticipate for 2024.

The growing prevalence of chronic disorders is driving an increase in diagnostics, testing, and monitoring that not only calls for more medical devices, but also greater product innovation.

Trend #2: Increased Adoption of Biometric Devices and Wearables

Advances in circuit miniaturization have enabled companies in the medical device industry to develop a wider variety of wearables and biometric devices, allowing them to take advantage of the growing demand for remote patient monitoring (RPM). RPM technologies track patients’ vital signs and deliver data in real time. This fosters better healthcare delivery through non-invasive diagnosis, treatment, and accurate prognoses in medical emergencies. The recent uptick in alternative data investments, like real-world data, provides healthcare companies with more information on human biometrics, further accelerating growth in the wearable space. The healthcare areas currently leading wearable adoption are audiology, health science, kinesiology, nursing, occupational therapy, pharmacy, and physical therapy.

The increasing popularity of biometric and wearable devices will see more players in the medical device industry procuring electronics manufacturing services (EMS) with engineering teams. After all, as manufacturing processes become more complex and we move into the era of the smart factory, in-house engineering teams will give EMS providers a competitive advantage by enabling them to improve production velocity and quality.

Trend #3: Greater Focus on Sustainability and ESG Goals

The healthcare industry generates over 4.6 percent of greenhouse gas emissions globally. The medical device industry is a top contributor within that space due to supply chain emissions, single-use devices, and consumables. So, it’s no surprise that regulators and investors are calling for medical device manufacturers to reduce the environmental impact of their products and prioritize sustainable practices throughout their product development and manufacturing processes.

The medical device industry is increasingly embracing environmental, social, and governance (ESG) priorities and implementing comprehensive sustainability initiatives to move toward carbon neutrality. When EY surveyed life sciences CEOs, nearly 80 percent planned to adjust their global operations or supply chains to address sustainability concerns. Around 55 percent reported that M&A will be a key strategic play to gain ESG expertise and boost sustainability.

To meet their ESG goals, more medical device manufacturers are adopting design for sustainability (DFS) best practices. DFS considers a product’s environmental, economic, and social impacts throughout its entire lifecycle, and promotes the development of devices that can be easily recycled. This is especially important as the reprocessing of medical devices has been shown to greatly minimize medical waste—reducing hospital costs by up to 50 percent and cutting ozone depletion by almost 90 percent.

Trend #4: Generative AI for Medical Device Industry 4.0

No trends list for 2024 can exclude AI—ours sure doesn’t. Like so many other industries during the global pandemic, the medical device industry was deeply impacted by supply chain challenges. Since then, the sector has been pursuing ways to streamline factory operations and manufacturing processes. Generative AI, which enables machines to autonomously create and innovate, is fast emerging as a preferred tool for increasing efficiency.

Used in combination with digital twins (virtual replicas of physical assets or systems), generative AI is allowing manufacturers to quickly analyze vast amounts of data and create highly accurate models of their supply chain processes, manufacturing constraints, and factory operations. These simulations are powerful for mitigating risk, predicting maintenance needs, and optimizing design, manufacturing, and distribution processes.

Trend #5: Increased Medical Device Industry Cybersecurity Controls

The explosion of smart, connected medical devices has prompted the medical device industry to adopt the multi-layered cybersecurity best practices that are common in other industries. And with the passage of the Consolidated Appropriations Act of 2023, the FDA is now required by law to include cybersecurity in its review of medical devices that contain software and connect to the internet, such as heart defibrillators and continuous glucose monitors (CGMs).

This federal oversight of medical device security is considered critical for the safety of patients and the protection of their personal information. And to deliver on its new mandate, the FDA is now required to update its cybersecurity guidance every two years, which means device manufacturers will have to keep up to ensure premarket submissions are acceptable.

Guiding principles found in the FDA’s cybersecurity guidance to manufacturers include the following:

Cybersecurity is part of device safety and quality system regulations (QSR). This may be satisfied through a Secure Product Development Framework (SPDF) that encompasses all aspects of a product’s lifecycle, including development, release, support, and decommission.
The FDA will assess the adequacy of a device’s security based on the device’s ability to provide and implement the following security objectives throughout the system architecture:
- Authenticity, which includes integrity
- Authorization
- Availability
- Confidentiality
- Secure and timely updates and patches
Device users must have access to information pertaining to the device’s cybersecurity controls, potential risks, and other relevant information for maximum transparency.
Device cybersecurity design and documentation are expected to be commensurate with its risk. For example, if a thermometer is used in a safety-critical control loop, or is connected to networks or other devices, then the cybersecurity risks for the device are greater, and submissions should include more substantial design controls and documentation.

Trend #6: 3D Printing Improves Medical Device Design

Technological advancements in 3D printing, increased investment, and growing use cases for 3D printing in the medical device industry are driving the rapid growth of this technology. One recent analysis found that the market for 3D printed medical devices will reach $6.9 billion by 2028. Medical devices that can be 3D printed include external wearable devices, clinical study devices, implants, and even tissues.

For medical device manufacturers, 3D printing is an opportunity to produce more personalized products, like prosthetics. More specifically, medical device companies can use 3D printing to integrate anatomical and pathological structures in the design of their products, enabling a customized fit. 3D printing is also more cost-effective for manufacturing. 3D printing individual parts on site can reduce energy consumption from manufacturing, storing, and shipping parts by as much as 64 percent, according to researchers at Michigan Technology University.

3D printing also enables the rapid prototyping of medical devices, allowing manufacturers to quickly test designs for manufacturability and performance, narrowing the demand-supply gap. For example, life sciences company Fluicel uses Biopixlar high-res 3D printing technology to produce biocomposites that mimic the insulin-producing function of the pancreas, enabling the company to test a new product for treating Type 1 Diabetes accurately.

Your Medical Device Industry Manufacturing, Logistics, and Shipping Partner

Are you looking for a medical device manufacturing partner to help your company stay ahead of industry trends? At PRIDE Industries, our trained engineers will customize a turnkey manufacturing solution for your unique product, and our ISO 13485-certified facilities will provide you with state-of-the-art medical device manufacturing technology. Count on us to deliver your product quickly, cost-effectively, and built to the highest quality standards.

Learn More

The third-party logistics (3PL) business—the practice of outsourcing all or part of warehousing, inventory management, shipping, receiving, picking, and packing, kitting, and reverse logistics (returns)—is booming.

According to Market Research Future (MRF) the global 3PL market is projected to double in just seven years, growing from $1 trillion in 2021 to nearly $2 trillion in 2028—a clear sign of how many companies are turning to this valuable service. While less than half (46 percent) of Fortune 500 companies operating in the United States had a 3PL partner two decades ago, now a staggering 90 percent of those companies utilize these services, according to supply chain consultancy Armstrong and Associates. As companies compete to deliver products as efficiently as possible, the growth of third-party logistics will likely continue.

Ten Benefits 3PL

The benefits of turning to a third party for logistics management vary across industries, and even from one company to the next. That said, there are at least ten reasons why just about any company that delivers physical products can benefit from a strong logistics partner.

1. Cost Savings

There are multiple ways a 3PL partner can save you money. One way is by reducing shipping costs through shared transportation services; your third-party partner can negotiate volume discounts by combining the shipping needs of various suppliers and manufacturers. Another way to save is on capital outlay. When companies try to do everything in house, they incur a fixed cost for equipment and infrastructure, irrespective of volume. However, with a 3PL partner, the cost of transaction processing generally tracks with the volume processed—if volume drops, so do transaction costs. Another area where a third-party partner can save you money is in labor costs. The right partner can attract and retain the best people all year round. This means your company always has access to skilled labor, and you only pay for that labor when you need it.

2. Scalability

While less than half (46 percent) of Fortune 500 companies operating in the United States had a third-party logistics (3PL) partner two decades ago, now a staggering 90 percent of those companies utilize these services.

New product launches, recalls, and market changes are a few of the reasons that demand for a product can fluctuate. Growth is often unexpected. When you lease warehouse space independently, there’s always the risk of running out of room—or just as bad—paying for empty shelf space “just in case.” A third-party partner offers the ability to adapt to change quickly and easily, without the need for significant investment in infrastructure or labor. This flexibility can be especially beneficial if your product is seasonal or if demand for it naturally ebbs and flows.

3. Inventory Management

An experienced third-party partner will use demand planning to keep track of multiple important factors—such as lead times, historical data, market trends, and even external factors like oil prices and the weather—to help you react in real time. Your partner will then combine that planning process with their robust supply chain connections to make sure your product is available and ready to be delivered at the right time to your customers.

4. Focus on Core Competencies

It’s hard to focus on innovation if you’re plagued with shipping woes and packaging nightmares. If your employees are spending countless hours sourcing raw materials, product development may become less of a priority. Using an external partner frees your company focus on its core competencies and leave the logistics details to someone else. Focusing on what you do best, such as R&D and product innovation, can lead to increased productivity—as well as less stress and hassle for all involved.

5. Expertise and Industry Knowledge

The right 3PL partner will understand your industry, have all necessary certifications and registrations, have access to the latest technology, and implement industry best practices. For example, aerospace companies with federal contracts require a third-party partner with ITAR-registration and strict adherence to NIST standards. Medical device manufacturers, for example, have little room for error. Therefore, they benefit most from a partner with expert technicians who know how to eliminate defects using the latest in automated optical inspection (AOI) and 2D/3D X-ray technology. And a microelectronics company needs a partner with ESD flooring, to protect electronics from static electricity. Whatever your industry, the right partner, working with the right tools, can make sure your products get to your customers on time and in optimal working order.

6. Decreased Supply Chain Risk

The right supply chain services partner will know how to source quality parts and materials at a competitive price. In fact, the right partner can often show you how to swap custom parts for readily available standard components, reducing your supply chain risk. During the pandemic, for example, the ability to switch to a comparable component when the original was suddenly unavailable often meant the difference between bankruptcy and staying in business. And though the supply chain has improved considerably since then, disruptions persist, making this service just as critical as ever.

7. Increased Supply Chain Efficiency

A good 3PL partner will also know how to increase your supply chain efficiency. For example, a savvy partner will evaluate your supply chain and help you decide where automation will—and will not—add efficiency and cost savings. The right technology can track where your finished product is in transit, when the customer receives it, and in what condition it was received. New IIoT technology can also provide real-time tracking with notifications to all stakeholders across the supply chain.

8. Testing and Inspection Protocols

Electronics products—such as aerospace technologies, medical devices, and consumer gadgets—are subject to stringent regulations and quality standards. A strong 3PL partner will have the needed certifications, registrations, inspections, and testing procedures in place for these sensitive products. A partner who knows what tests need to be performed—and when—will save everyone time, money, and hassle. For example, the right partner knows to inspect a solder paste print before the assembly is soldered in the reflow oven. Likewise, an experienced partner should have SMTA-Certified SMT Process Engineers in-house to ensure best-in-class manufacturing.

9. Sustainability

Once your product reaches the end of its life, what can you do? More and more customers are now holding manufacturers accountable for disposing of unneeded materials in a way that is friendly to our planet. Fortunately, the right third party partner can help with recycling or refurbishment—helping you meet your sustainability goals. And the end of a product’s life isn’t the only time a 3PL partner can help you reach these targets. An expert third-party logistics team can also help you design a product that’s easily recycled at the end of its life, so that its components can be sold in the secondary market, creating another revenue stream for your company.

10. Returns and Reverse Logistics

Even the best company will need to deal with returns, i.e., have a plan for reverse logistics. Just as it sounds, reverse logistics is the process of returning goods back to their point of origin. The treatment of a returned product, however, can vary depending on circumstances. For example, if products must be returned due to a recall, there are required processes for alerting customers as well as receiving the products. Likewise, you need a plan for any recalled products that have not yet shipped.

You also need a plan for products returned for other reasons, such as repair or end-of-life support. A 3PL partner that is familiar with proper IT Asset Disposition (ITAD) is especially important. To keep critical company data protected, disposing of sensitive IT devices requires more than simply recycling. The right partner will know how to first “wipe” the equipment and remove all asset tags—ensuring that no proprietary data can be leaked and that the devices can no longer be tied back to your organization.

Choosing a 3PL Partner Wisely

Developing a long-term relationship with a reliable third-party logistics provider can yield benefits for decades. A product may be selling nicely, and then you run into production difficulties and need a more agile supply chain. Or a custom part may be out of stock and unavailable for an extended period, and you suddenly need a more available replacement. These are examples when a resourceful, experienced 3PL partner can be invaluable. When searching for a 3PL partner, be sure to choose one that can provide a wide range of services and high-quality assistance.

A 3PLPartner You Can Rely On

PRIDE Industries offers supply chain management, kitting and fulfillment, reverse logistics, and other business services to emerging and Fortune 500 companies. And our inclusive workforce—about 50 percent of our employees have a disclosed disability—means that working with us also allows you to make a positive social impact with your business spend.

Learn More

From Segway scooters to Google Glass, the electronics market is littered with products that didn’t live up to their hype. It’s because of missteps like these that failure is often touted as a necessary stop on the path to success. But it’s never the preferred outcome, and while a new product introduction always carries some risk, there are steps that companies can take to reduce that risk—including finding the right electronics manufacturing services (EMS) partner.

According to Fortune Business Insights, the consumer electronics sector was worth $738.75 billion globally in 2022, and this number is expected to rise to over $1.2 trillion by 2030. Other sectors—like aerospace technologies and medical devices—are also seeing healthy growth. This means there are plenty of opportunities for innovative companies, but to make the most of them, you must do more than just design and build a great product—you have to plan for success. The fact is, a well-conceived new product introduction (NPI) plan can make the difference between releasing the latest must-have device or a soon-to-be-obsolete flop.

Building a New Product Introduction Plan

Ideas may abound for creative new electronics, but can these ideas be manufactured cost effectively and at volume? A New Product Introduction (NPI) plan can help you answer this question. The NPI process for a new product starts at the concept stage, and includes the working prototype, mass production, and commercialization stages. In other words, NPI looks at the product from the viewpoint of manufacturing. While incorporating NPI processes in the development of a new electronic device won’t eliminate every risk, employing a multi-step NPI plan, one that takes a product from ideation to viable manufacturing, can help companies gain a competitive edge.

While incorporating NPI processes in the development of a new electronic device won’t eliminate every risk, employing a multi-step NPI plan, one that takes a product from ideation to viable manufacturing, can help companies gain a competitive edge.

Depending on its scale and complexity, a new electronic product can take anywhere from nine to 36 months to develop. However, scale and complexity are not the only factors that determine the time it takes to bring an electronic product to market. The ability to meet deadlines, the reliability of the supply chain, and the expertise of your design and engineering team are all factors that will influence the time—and therefore the money—that you spend on development. A robust NPI plan takes these elements into account and can be a powerful tool for minimizing roadblocks and keeping product development on track.

While the early stages of new product ideation can be performed in house, once the product’s design is under way, costs and risks can be reduced by partnering with an EMS provider that has deep experience in every stage of the product lifecycle, from concept to end-of-life planning. Having this expertise on hand is vital, especially in the early development phases. A product that works well in the prototype stage is not always a success when it goes into mass production, and partnering with an experienced EMS provider at the design and prototyping stages can save you headaches down the line. This is especially true when it comes to the PCBA—the heart of many electronic products.

Stages of New Product Introduction for Electronics Manufacturing

So, what is involved in NPI planning? Often depicted as a funnel, with many ideas going in the large end and a final product emerging at the other, an NPI plan is a framework for a smooth path that takes your initial concepts and develops them into a market-ready product. Making decisions in the right sequence is at the core of a successful new product introduction. A good NPI plan will be well ordered, with stages and go/no go points that ideas and designs pass through before the product is brought to market. Those stages typically include the following:

Concept/Ideation

A new product starts with an original idea, concept, or design. This is the brainstorming stage, in which ideas are hashed out. This is the time to draw upon comprehensive market research that clearly identifies customer needs, so that your team can achieve the best design and develop a clear vision for the new product. By the end of this stage, the product concept should be clearly defined, a new product development team identified, and a project plan sketched out in detail.

Feasibility or Proof of Concept

Now that the product concept has been established, it’s time to test its feasibility, identify its must-have features, and determine the technical specifications needed to deliver these features. Now is a good time to apply Design for Manufacturing (DFM) principles, in order to ensure that the new device can be produced cost effectively while meeting quality and regulatory requirements. DFM principles should also be applied to the design of the enclosure and even the packaging. Once these designs have been optimized, it’s time to build a model.

Development and Prototyping

Next up is prototyping, which involves creating models of the product to validate its design and functionality. This step helps identify and rectify any issues before moving forward. Rapid prototyping technologies can significantly reduce the time and cost associated with this phase. This is also the stage in which component choices are finalized and supply chain resources are identified, in preparation for full production.

Validation and Pre-Production

By this stage, you’ll likely be working with a small batch of products that display the full range of desired features. Now is the time to thoroughly evaluate manufacturability, cost, and production timelines, and make any necessary changes. The validation process should be rigorous, and include functional, reliability, and regulatory compliance testing. You may find that some components need to be changed and the bill of materials (BOM) adjusted—an important step before moving on to full production.

Manufacturing Readiness

With a DFM-optimized BOM and thoroughly tested designs in hand, the focus shifts to preparing for mass production. A pilot launch of the product will show you where manufacturing needs to be fine-tuned. Then, once that step is completed, you can begin ramping up production.

Mass Production and Evaluation

As volume production increases, be sure to monitor the production line and adjust as needed in order to optimize production efficiency and quality. And once your product is on the market, seek out customer feedback—sometimes you can respond to a perceived fault or a change in consumer tastes with a small tweak to your processes.

Ensuring NPI Success With an Experienced EMS Provider

While a good NPI plan is organized with stages and decision points, be careful not to make your plan so rigid that it chokes innovation. Allowing for some flexibility, instead of unthinkingly complying with an NPI plan, will land you in the sweet spot where productive creativity can thrive.

Achieving this type of creative flexibility requires clear communication across engineering, design, marketing, and quality control teams. And keep in mind that your team includes your EMS provider’s engineers, who should be both reliable in meeting deadlines and available when you need to discuss tweaks to design or manufacturing. Along with a strong NPI plan, a cohesive team will offer you the greatest chance of producing a winning product.

With that in mind, let’s look at some of the advantages a strong NPI plan offers, along with some pitfalls you should avoid and what you should expect from your EMS provider.

Reduced Time to Market

One of the primary benefits of a robust NPI plan is its ability to accelerate the time-to-market for new electronic products. With each stage of development planned out, the product can move smoothly and efficiently from concept to production. Getting your idea launched expediently enables you to meet market demand and gives you a competitive edge.

Conversely, rushing through the development phase to meet aggressive deadlines can lead to design flaws, inadequate testing, and ultimately, product failure. It’s crucial to strike a balance between speed and thoroughness.

Cost Efficiency

Having a robust NPI plan in place enables you to rectify design inefficiencies and refine manufacturing processes—leading to substantial cost savings. And here’s where an EMS provider with experienced engineers on staff can make all the difference. Tech-savvy engineers can optimize your design layout using readily available components, lowering materials costs and reducing assembly time.

On the other hand, rushing through an NPI plan—by not sticking to a design freeze, for example—can lead to budget overruns and eroding profit margins. The fact is, every go/no go decision point in your plan functions as a cost-control mechanism, so don’t make these decisions lightly.

Enhanced Product Quality

A strong NPI plan incorporates rigorous testing to ensure that the final product meets quality and performance standards. This translates into higher customer satisfaction and a sterling brand reputation. On the other hand, cutting corners on testing can lead to product defects, recalls, and—eventually—damage to a company’s credibility. So make sure that the EMS provider you work with is well-versed in DFT principles, and can ensure that your NPI plan includes the optimal testing for your product.

Supply Chain Optimization

Your NPI plan should account for the current state of your supply chain, in order to ensure a reliable source of components and minimize disruptions. Whenever possible, opt for readily available components instead of custom parts. And if it’s feasible, try to source domestically, as this will lower your risk of supply chain disruptions. Neglecting supply chain risks, which also include geopolitical issues, can disrupt production and delay your time to market.

For these reasons, it’s important that your EMS provider have a deep understanding of global supply chain dynamics and strong relationships with a wide range of suppliers. This enables them to draw upon alternate sources if needed, ensuring a reliable and timely supply of vital components.

A Plan for Success

Whether your company is large or small, having a carefully conceived NPI plan for each product you produce will improve your bottom line. Whether you’re manufacturing a medical device, an aerospace component, or a consumer gadget, creating and following an NPI plan will help you get to market faster with a product that is both reliable and easy to manufacture.

An Electronics Manufacturing Partner You Can Rely On

Are you looking for a full-service, DFM-savvy contract manufacturing partner? Our customer onboarding process includes the development of a robust NPI plan, and our longstanding partnerships with top-tier distributors give us unparalleled procurement capabilities. In addition, our manufacturing services include electromechanical, cable and harness, and SMT/TH PCB assembly, as well as BOM analyses with component validations, Class I and II medical device capabilities, and a full range of kitting, fulfillment, and logistics services.

Learn More

October is National Disability Employment Awareness Month and, amid the manufacturing skills gap—there aren’t enough skilled workers in the country—it’s a great opportunity to call attention to one of the most underused talent pools in the country—people with disabilities.

It’s no secret that labor shortages and high turnover rates continue to plague the manufacturing sector, with about 40 percent of employees calling it quits yearly, according to the Bureau of Labor Statistics—44 percent in 2020, 39 percent in 2021, and 40 percent in 2022. Turnover is a drag on productivity and the bottom line, with recruiting, onboarding, and retraining costing from $3,500 to $10,000 per employee.

According to the 2023 Career Advancement in Manufacturing Report, 82 percent of manufacturing companies are experiencing a labor shortage. The numbers don’t lie. Earlier this year, the U.S. Chamber of Commerce reported 693,000 open manufacturing jobs. Even more concerning: A study by Deloitte and the Manufacturing Institute found that the manufacturing “skills gap” could result in 2.1 million unfilled jobs, costing businesses a trillion dollars by 2030.

Diversifying Talent Pipelines to Ease the Manufacturing Skills Gap

Deloitte’s solution? Turn to underrepresented communities.

A landmark Accenture study found that companies that actively include employees with disabilities achieve 28 percent higher revenue, double the net income, and 30 percent greater profit margins than those that don’t.

“It is deeply concerning that at a time when jobs are in such high demand nationwide, the number of vacant entry-level manufacturing positions continues to grow,” said Paul Wellener, Deloitte vice chairman and U.S. industrial products and construction leader. “To attract a new generation of workers, the industry should work together to change the perception of work in manufacturing and expand and diversify its talent pipeline.”

Finding Hidden Labor Pools

When it comes to diversifying its talent pool, InterMotive Vehicle Controls in Auburn, California, is ahead of the game. Co-founders Linda and Greg Schafer were searching for an outsourcing partner to manufacture some of the company’s PCBAs in 2008 when they discovered PRIDE Industries, a contract electronics manufacturer with a mission to create employment for people with disabilities.

“The company’s capabilities blew me away,” Greg said. “The people, the processes, and the technology are state of the art. But what sets the company apart are the people—I’d never seen a manufacturing floor where employees were so happy to be there.”

Fast forward 15 years, and PRIDE Industries now manufactures 46 parts for InterMotive—24 cable assemblies and 18 mid to high-volume PCBAs. Services provided include functional testing of PCBAs, using custom test fixtures designed and built by PRIDE Industries engineers. Testing time has been reduced from about six seconds to 2.5 seconds, and returned boards have all but disappeared.

Retention Benefits

“We have directly hired people with disabilities and outsourced to PRIDE Industries’ teams for going on two decades now,” Linda said. “When you take someone with an intellectual disability or a physical disability, and assess their skills and interests, give them the training and support they need, you’ll be amazed at what they can do and how much they can contribute.”

Hiring people with disabilities helps InterMotive bridge the manufacturing skills gap and increase retention. “I have employees with disabilities who started after high school and are now married and buying homes,” Greg said. “They love their jobs, show up on time every day, and are proud of their work. They really enhance our workforce.”

But the story doesn’t end there. Coincidentally, one of InterMotive’s flagship products is a wheelchair interlock—a mechanism that immobilizes wheelchair-accessible vehicles when the wheelchair ramp deploys. “Some of our employees come to work in vehicles with our products on board,” Linda said, “products they may have helped build.” InterMotive is the largest manufacturer of wheelchair interlocks in North America.

A Vast Labor Pool

More than 10 percent of people aged 16–64 in the United States—22 million people—have a disability. The employment ratio for this population—the percentage who are employed—hovers around 30 percent, while the rate for persons without a disability in the same age group is about 75 percent.

But that’s changing, fast. In recent years, the employment-to-population ratio for people with disabilities has risen to record highs, reaching more than 37 percent, according to the monthly National Trends in Disability Employment (nTIDE) report, published by the Kessler Foundation and the University of New Hampshire.

Still, that leaves about 14 million people available for work.

Proven Benefits

The business benefits of a workforce that includes people with disabilities are proven, if not well known. A landmark Accenture study found that companies that actively include employees with disabilities achieve 28 percent higher revenue, double the net income, and 30 percent greater profit margins than those that don’t.

Research published by the National Institutes of Health found that the economic benefits of hiring people with disabilities include: lower employee turnover, greater long-term retention; increased reliability, punctuality, and productivity; and greater customer loyalty and satisfaction.

Low Risk, High Reward

One of the reasons some employers cite for not including people with disabilities is the added cost of reasonable accommodations that the Americans with Disabilities Act (ADA) requires. That myth is long busted. A survey of 3,528 employers by the Job Accommodation Network (JAN) found that 49.4 percent reported that accommodating employees with disabilities “cost absolutely nothing.” The other employers incurred an average one-time cost of just $300 per employee with a disability.

Meanwhile, the Society for Human Resources Management pegs the average cost of replacing an hourly worker at $1,500 each—far more than the cost of accommodating an employee with disabilities.

Keys to Success

Another reason some companies cite for not recruiting people with disabilities is simply a lack of knowledge about how to work with them. Again, this concern is unfounded, as the folks at InterMotive well know.

Keys to InterMotive’s success with employees with disabilities are consistent assessment, training, development, and feedback—processes the company has invested in for employees of all abilities for decades. “In many ways, these employees are just like any others that walk through our doors,” Linda said. “We identify their skills and interests, find the right role for them, and give them the training and support they need to be successful and find a career path here.”

InterMotive began hiring employees with disabilities long before DEI became trendy. “We aren’t doing this because someone told us we had to,” Greg said. “We’re doing it because it makes us a better business.” And he cautions companies against hiring from underrepresented communities simply to “check a box.” He said it requires investment, but once you make it, “you realize you are more alike than different.”

“They want to work. They want to contribute,” Linda said. “Their joy is a gift.”

Solve Your Manufacturing Skills Gap with PRIDE Industries

PRIDE Industries offers state-of-the-art facilities and a full suite of electronics manufacturing, packaging and fulfillment processing, and supply chain management services. And our inclusive workforce—about 50 percent of our employees have a disclosed disability—means that working with us allows you to make a positive social impact with your business spend, while meeting consumer demand for products made in the USA.

Learn More