8 MAY 2024OPINIONSince the 1970's many companies have moved away from manufacturing and completely outsourced the production of their products. While the reasons may vary for each organization, normally, this is closely related to the costs associated with this part of the business, being at the component level (economy of scale), general capital expense, labour costs or expertise, or even supply chain/warehousing.To address this need, many contract manufacturers created Solectron or Jabil or expanded their business away from former entities like Celestica, which was originally part of the IBM conglomerate, to mention a few in the electronic parts arena.Two main benefits of partnering with such organizations are:- The general economy of scale they achieve when sourcing components or raw materials in the market. Particularly with items that have a significant volatile market value. This then helps reduce overall product/sale price or maintain stability in the face of material cost change.- The application of best practices and consolidated knowledge. Due to the array of different products and customers that a contract manufacturer has, best practices and knowledge that otherwise would be unachievable in the short or mid-term for an organization running independently are now embedded in their product.While there's no harm in seeking a better operational cost, it is regularly assumed by the contracting party that regardless of what their organization designed, all manufacturing is easy, prompt, and seamless, focusing on the existence and execution of a commercial contract, and ­ perhaps mostly due to lack of knowledge ­ not paying attention to the need of a quality agreement or quality plan, and the benefits that it brings to any product. So, what is the importance of a quality plan or quality agreement? This document set "the rules of engagement" between the parties, covering the full description of the product, its requirements, the production processes involved and where the test criteria are applicable, as well as process controls needed and provided, and finally, the measurements for the product functionality and performance, and also processes KPI's. All should define the boundaries of responsibility of the contract manufacturer without any doubt.Despite the fact that the quality plan is directly related to the type of commercial contract set between the parties, here are some key points that should be considered to make this relationship a bigger success:THE IMPORTANCE OF A QUALITY AGREEMENT WHEN USING CONTRACT MANUFACTURERSBy Thiago Barcelos, Director of Technical Operations, ChargePointThiago Barcelos
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