Contract Manufacturer Selection

With the help of Insight Solutions Global, the client found the ideal supplier to deliver their products on time and on budget, developed a healthy supplier relationship, and gained more control over the supply chain.

About the client

Industry: Consumer electronics

Product: Smart wearable product

Company Size: Startup

Location: United States

Contract manufacturer selection process


  • With no prior selection, the client co-operated with a tier 1 contract manufacturer (CM) for new product introduction (NPI) and mass production introduced by third-party; 
  • The manufacturing service agreement (MSA) was not reviewed or advised by any manufacturing professionals; 
  • The client wasn’t sure how much to pay, though appreciated CM’s capabilities and been assured of “the best deal”;
  • The tier 1 CM charged high prices for all of the engineering support (non-recurring expense), and production line setting up and idle capacities; 
  • Lacking experience and sources, the client relied heavily on the tier 1 CM for sub-supply chain sourcing and management, thus losing the bargaining chips
  • The client did not have enough access to critical component suppliers; 
  • With no cost risk highlights or verification method, the client was charged excessively on excess and obsolete (E&O) parts, product price variance (PPV); 
  • The CM did not support the client’s tight-scheduled Black Friday and Christmas sales because of lacking resources; 
  • The business relationship between the client and the CM was strained;
  • The client failed to get related data from the CM when proposed to shift to a different CM for tooling and fixture; 
  • The client’s company was expected to be acquired by a Swiss company, but not without a solid CM partner to deliver high quality products on time and on budget. 

How we helped

The proposed scope of work
  • Aligned with and understood critical commercial and technical requirements with client’s CEO and CTO; 
  • Jointly defined, reviewed and agreed on the request for quotation (RFQ) and MSA
  • Reached out to 6 other supplier candidates for further discussions; 
  • Assessed, reviewed and verified potential suppliers’ capabilities in fulfilling the requirements; 
  • Ran SWOT (strengths, weaknesses, opportunities and threats) analysis on the supplier candidates; 
  • Down select 4 supplier candidates, and ran further reviews; 
  • Did a one-week onsite assessment with the CTO, and advised pros and cons after each visit; 
  • Reviewed RFQ responses to benchmark the quotes
  • Provided MSA negotiation strategies and tactics to earn the client a fair deal. 


  • Successfully selected the ideal supplier for the client, fixing the previous problems; 
  • Reduced 22.5% of the overall cost, which contributed to saving $112,500 in the first year; 
  • The client gained more potential to be acquired by the Swiss firm. 

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