Transitioning from In House Production to a Contract Manufacturer:  Opportunities and Challenges

Transitioning from In House Production to a Contract Manufacturer:  Opportunities and Challenges

By Tracie Ball and Tom Brazier of RESCO Electronics

In today’s challenging manufacturing environment, OEM’s are always looking for opportunities to reduce costs. Recently the RESCO team worked on a new project with a large medical OEM to transition production of a critical high voltage assembly from their plant to RESCO’s facility in Ciudad Acuna Mexico.  As with any outsourcing project, this one came with a unique set of opportunities and challenges.

Because this product was causing a bottleneck in our customer’s production, the first challenge our team faced was developing a project timeline that was aggressive, but allowed enough time for all of the steps required for a smooth transition to be covered. An important part of the project was to re-direct raw material from our customer’s suppliers; many of them new to RESCO.

As the two engineering groups worked together, it was discovered that several changes needed to be made to the assembly drawing. These changes, while not directly affecting the end product, impacted the manufacturing and inspection procedures. Since our customer is a medical device OEM with strictly controlled change procedures, it was important to get these items identified quickly so that they had ample time to execute their internal engineering change approval process.

Because of the nature of the product, as well as the testing requirements, the RESCO team needed to identify new test equipment, develop a test procedure, and build the required fixturing that would allow for a safe and efficient testing of this high voltage product. Because our customer was currently building parts our engineering team requested and was able to get known good and bad samples with which to validate our test procedure.

After all of the effort to get to this point it was time to build and validate first articles. When the first articles were submitted to our customer we hit our first real snag…there was a dimensional issue with the drawing.  After the issue was corrected our two teams worked concurrently to get back on schedule; RESCO built a new set of first articles while our customer processed an ECN to update the drawings and inspection reports.  All of this took place while the clock was ticking on the transition deadline.  Fortunately, both teams were able to expedite their respective processes and a new set of first articles was submitted and approved relatively quickly.

As we moved to the production phase, RESCO’s sales team coordinated with our customer’s procurement team to have raw material transitioned over to our facility; all the while maintaining an adequate supply of material at our customer’s site to support continuing internal builds.  Due to the excellent communication between the teams, we were able to get the required material when we needed it without causing any line shutdowns at our customer.

The next step in the process was for the RESCO production team in Acuna to build adequate stock to support a kanban stocking program for the customer.  This was accomplished within a short period.  The customer then wound-down production at its site and RESCO began fulfilling our customer’s demand for this high voltage assembly.

The final step in the process was the teams getting together to celebrate a win–win for both companies and to start figuring out what the next project should be.

Many Thanks to RESCO Electronics for allowing WHN to reprint this article from their Blog. T find out more, visit them at