The Ultimate Guide to Spotting Red Flags When Hiring a Contract Manufacturer

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( — August 16, 2017) — When working on a large or complex project, you may consider outsourcing as a rational cost and time-saving option. Most medium and large scale electronics manufacturers hire contract managers to handle logistics, prototype testing, and, responding to customers. Outsourcing minor roles enables electrical engineers to spend more time refining new concepts for future products.

Hiring a contract manufacturer requires you to do some investigation in advance. Delegating responsibilities to the wrong company leads to a huge wastage of resources. If you spot any of the four signs explained below, you should definitely hire a better Contract Manufacturer.

1.      Uses cheap and often inferior components

A majority of experts in the electronics design industry agree that cheap is expensive. Inferior products tend to let you down at crucial stages of design and product testing. If you come across a contract manager who wants to do a complete overhaul of your BOM just to save a few dollars, you better terminate the contract.

Cutting corners is a clear sign that the contract manager is focused on siphoning money from your pockets. Choose a company that’s known for its high quality. You may have to pay higher rates, but you won’t have to endure sleepless nights.

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2.      Overlooks non-technical matters

Apart from being an effective time-saving strategy, outsourcing enables electrical engineers to get professional help on important company duties. For example, creating payrolls, creating budgets, and, establishing contacts with new suppliers. Do your employees or suppliers constantly complain because of receiving late payments? It could be a red flag that your contract manager is poor at finance management. Working with such a negligent contract manager could lead to you overspending on your projects.

You may also come across a contract manager who promises to deliver your project within a month. However, they forget to consider the duration spent to ship the required materials from component manufacturers located overseas. This leads to postponing product launch dates and a series of delays that could have been easily avoided in advance.

3.      Works with shady PCB software

One common reason why electronics manufacturers reject designs is due to incompatibility issues. Despite the hundreds of new electronics design software that pop up every day online, well-established electronics manufacturers only work with a few reputable brands. It’s advisable to avoid contract managers who insist on you using outdated or unheard of electronics design software.

4.      Negative online reviews

Nowadays, Facebook allows its members to rate businesses based on a scale of 1 to 5 stars. Any ratings below 3 stars are a clear sign of customer dissatisfaction. The page followers can also post comments attached to their ratings. Simply log in to Facebook and search for the Contract Manager’s official Facebook page then analyze the ratings.


Applying the tips shared above will ensure you avoid the frustrations of working with self-centered contract managers.  Do you have questions or comments? Kindly post them below.