Should You Trust a PCB Assembler to Source Your Components?

December 19, 2023

Cadence PCB Solutions

PCB component sourcing

When preparing a new PCB for assembly and scaling, one question that comes up is whether you should source components yourself, or allow the PCB manufacturer handle sourcing and procurement. There are good arguments on both sides of this issue, so it's important to weigh the pros and cons when making this decision. Some of the risks boil down to time required to coordinate component deliveries and the costs of outsourcing procurement tasks to the assembler.

Benefits of Manufacturer Component Sourcing

There are two approaches to procuring components for a manufacturing run: either source and purchase the parts yourself, or have the manufacturer do this. Not all manufacturers or assemblers will provide this service, and those that do provide it might limit your distributor options. Having your PCB manufacturer source components comes with several potential advantages:

Simplified logistics - If you let the manufacturer source components, you don't have to worry about procuring parts yourself. The manufacturer or contract assembler has established supply chains and can likely get volume discounts on components. This takes a procurement burden off the designer.

Improved manufacturing scheduling - Designers sourcing their own parts can create scheduling delays by having to search through distributor inventory. When the manufacturer handles sourcing, they determine the schedule and will help the designer avoid delays with production due to incomplete parts kits or late deliveries.

Removed liability - If there are any problems with boards after assembly due to incorrect or missing placements, the manufacturer assumes the liability. This means you can avoid rework costs if the boards come out with an assembly defect or incorrect parts.

Risks of Manufacturer Component Sourcing

By allowing the manufacturer to take the lead on sourcing, you lose some control over the process, which might create some additional risk that is unacceptable. There is also a cost factor to consider due to the business model some manufacturers implement when sourcing parts.

Component markups - In exchange for providing sourcing and procurement services to clients, the manufacturer may charge a premium on the component costs to cover their sourcing services. Markups can be substantial, and the exact amount depends on how the manufacturer provides the service. Some manufacturers have an online portal where the customer can handle most of the sourcing challenges while creating their order, and yet there are still many manufacturers that do all sourcing and purchasing manually.

Delayed problem discovery - If there's an issue with a particular component, such as obsolescence or low stock, the assembler will end up delaying the build until these are resolved. This always leads to a flurry of emails back and forth. If you source yourself, the problems are usually found earlier and they can be solved faster by avoiding the Q&A emails from the manufacturer.

Limited supply chain options - The manufacturer may not use the exact component vendors you want. For example, first-tier suppliers may not always be used if cost is the priority. Sometimes, the manufacturer will only procure from the biggest distributors because those distributors are willing to extend support and credit to the manufacturer. Anything in the design that does not appear at authorized vendors needs to be purchased by the customer.

Sometimes, the manufacturer will not use authorized sources at all, instead procuring from broker networks. This puts you at risk of faked parts, reused parts, or incorrect parts making their way into the assembly. You will have little visibility into the manufacturer's component sourcing and quality control process versus the case where you source the parts yourself.

Key Considerations When Deciding

With these pros and cons in mind, here are some key factors to think about when deciding whether to let your PCB manufacturer source components:

Volume	At low volumes, doing it yourself may be best. At higher volumes, manufacturer sourcing often makes more sense.
Design iteration speed	Faster iteration on prototypes favors self-sourcing. Slower cycles allow manufacturer sourcing.
BOM complexity	More variants of the BOM favors self-sourcing as you can plan new revisions in parallel with production runs.
Quality requirements	More stringent quality demands favor self-sourcing and may involve parts testing before consignment Commodity level quality enables manufacturer sourcing.
Logistics expertise	Lack of procurement and logistics management experience favors manufacturer sourcing. Customers with supply chain expertise or a dedicated procurement team can handle self-sourcing.

In the end, whether to let your PCB manufacturer source components comes down to your specific priorities. Partner with your manufacturer early in the design process to determine what strategy works for a particular project.

Whenever you are planning a volume build and you’re weighing your sourcing strategy, you can avoid delays and reduce Q&A when you create your design data package using the best set of PCB design features in OrCAD from Cadence. Only Cadence offers a comprehensive set of circuit, IC, and PCB design tools for any application and any level of complexity.

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