Are Your Costs of Warranty Repairs Destroying Your Profit Margins?

As supply chain issues are still wreaking havoc on manufacturing companies, those in the electronics industry are being forced to consider a variety of options to stay competitive. They must think outside the box to be able to fulfill existing orders and take on new ones. Flexibility will be the key to success for electronics manufacturers over the next 12 to 18 months and beyond.

Electronics parts shortages are a reality.

The growth of technologies like 5G, artificial intelligence, and cloud computing continue to drive demand in consumer electronics, automotive, healthcare devices, and industrial and energy products–among others. For some parts, availability can be as far out as six months, at a minimum, and up to 18 months or more for others.

Getting access to new parts to fulfill warranty agreements on thousands of electronic components is nearly impossible and can be extremely expensive.

Consider repairing versus replacing parts.

Using new parts to repair old boards is both costly and inefficient. Those new components are more valuable now than they’ve ever been; so, why waste this valuable inventory on fulfilling warranty agreements when repairing those old boards is an option?

Oftentimes, repairing a bad circuit board can be much easier than you might think. Rather than replacing an entire faulty board, there may be a single, inexpensive component that, if repaired, could solve the problem and save time and money in the process.

Selecting a contract manufacturer to repair your boards is just as important as choosing the original manufacturer of the product. Circuit board repair (sometimes called circuit board rework) is a skillset that requires expertise beyond the initial production of a board. When evaluating a company to repair circuit boards, make sure they not only have the expertise but that they are also looking out for your best interests in both the short and long term. Even in the area of circuit board repair, it is important to find a partner you can trust.

Shortages typically drive increased prices.

When there’s a shortage of parts, not only does that create issues with timing and availability, but it is also often directly related to a price increase of those scarce components.

There are a few options to consider when prices increase because of shortages:

1. Repair may be less expensive than replacing a new board. Most warranties give manufacturers the option to “repair or replace;” so, you don’t have to default to a replacement.
2. Producing a smaller quantity to address an immediate need may get you through a short-term shortage situation.
3. Creatively assessing the challenge could open the door to new ideas and solutions.

How can we help?

At QualTech, our goal is to help you make better products, save money, and save time. We understand the challenges you are facing right now, and we want to help. If you are stuck in a position that has you backed up against a wall, reach out to us. Maybe an outside perspective is just what you need to get you through a tough situation.