How 3PL Can Fix OTD

If you’ve ever placed a PO with an EMS company, you’ve probably experienced this: It’s way easier to send the order than to receive it on time.

Here’s the good news: You don’t have to accept constant delays as inevitable. A Third-Party Logistics (3PL) provider can help fix your on-time delivery (OTD) issues—if you use them strategically. Let’s break it down.

First, What Counts as "On Time"?

You’d think “on-time delivery” would be self-explanatory. It’s not. There’s actually a fair bit of nuance here, and if you and your supplier aren’t aligned, you’re setting yourself up for trouble. Consider:

• On time to what? The date you requested or the date they promised?
• What if the supplier changed the date? Is the new promise the new "on time"?
• Does it mean shipped or received? Big difference if you’re dealing with international suppliers.
• Does partial delivery count? If you ordered 100 units and 95 arrived on time, is that a win or a failure?

Most companies define OTD as:

• The originally promised date, unless the buyer explicitly agreed to a change.
• The dock date: When the goods are physically received, not when they ship.
• 90–95% complete: This can really vary, the main thing is you and the supplier agree.

Full-Turnkey vs. Consigned/Labor-Only EMS

Before we get into why OTD is such a challenge, let’s talk about the $177b market for EMS in North America. There are two key models for working with an EMS provider:

• Full-Turnkey EMS: The EMS company handles everything—purchasing components, receiving and storing them, and manufacturing your assemblies. You just place an order and wait for the finished product.
• Consigned/Labor-Only EMS: You purchase and provide all the materials, and the EMS company focuses strictly on manufacturing.

No question it’s much easier up front to place one PO full turnkey. But if you’re experiencing OTD issues, or want to avoid them in the first place, 3PL may be your best strategy. 

Why Do Full-Turnkey EMS Companies Fail at OTD?

When you outsource to a full-turnkey EMS, you’re handing off:

• Parts procurement
• Receiving, inspecting, and storing components
• Manufacturing (SMT assembly, reflow soldering, inspections, etc.)

The manufacturing line is never the cause of OTD problems. EMS companies don’t struggle to make solder joints—that’s their core business. The real issue is material delays.

If a part is late, they might not tell you because… well, it’s just not that important to them—unless you’re a major customer.

Want Better OTD? Be 10% of Their Revenue

Here’s an industry secret:

If you make up 10% or more of an EMS plant’s revenue, you’ll get great service. If you’re smaller—especially under 5%—persistent OTD problems are much more common.

Why? EMS plants prioritize their biggest, most profitable customers. That’s just business.

If you’re a small or midsize customer, trying to solve OTD problems with a full-turnkey EMS might be a losing battle. 

But don’t worry—there’s a better way.

The Wrong Fix: Just Go Small

At this point, the obvious reaction is: Okay, I just need to find a smaller EMS company where I’ll be an important customer.

That’s logical. But it’s often not practical. Here’s why:

• Compliance Is a Problem: If you work in aerospace, medical, or defense electronics, your EMS provider needs certifications like:
  
  • IPC 610 – Acceptability of Electronic Assemblies
  • ISO 13485 – Medical Device Quality Management
  • AS9100 – Aerospace Quality Management
  • ITAR – U.S. Export Regulations
  • Many small EMS companies don’t have these certifications because maintaining them is expensive and time-consuming.
• Location Can Be an Issue: Even if you find a small EMS company with the right certifications, they might be in an inconvenient location. Working with a far-away supplier means longer transit times, higher shipping costs, and less oversight over your production.
• Small EMS Companies Are Expensive: The small EMS companies that do have the right certifications are often much more expensive than larger ones. They’re typically serving high-margin industries (medical, aerospace, defense) and charge accordingly.

Instead of struggling to find a small, certified, affordable full turnkey EMS provider, there’s another way.

The Smart Fix: Split Materials and Manufacturing

Instead of having your EMS company control both materials and manufacturing, separate the two:

1. Use a 3PL for materials procurement and management.
2. Use a consigned (labor-only) EMS for manufacturing.

This way, you get the best of both worlds:

• 3PLs specialize in materials. They handle procurement, storage, and kitting efficiently—regardless of your size.
• EMS companies specialize in solder joints. When you send them kits that are 100% ready, they just build.

Think of it like a force multiplier, you now have two teams and at least twice the manpower working to insure your success. 

This team building approach can solve most OTD problems.

Why This Works at Any Scale

3PL providers are far less sensitive to customer size. Their logistics processes are standardized, and they can serve small and large customers equally well.

The same is true for consignment EMS. They are usually very flexible on lot size, and their core competency of making millions of solder joints isn’t impacted by lot size.

Turbo Charge Your New Team

Want great OTD with less effort and reduced costs? Add Cofactr’s electronics-focused 3PL to your team, here’s just a few of the benefits for OTD:

• Automated supplier tracking: So you always know what’s late.
• 360 degree visibility: Everyone knows all material status all the time.
• Kitting services: So your EMS gets perfectly prepped materials.
• Full BOM Procurement: Including non-electronic components like metals and plastics.

3PL = Fewer OTD Headaches

If your OTD problems are constant and frustrating, it’s probably because you’re too small at a full turnkey EMS. Instead, separate materials and production:

• Use a 3PL to handle parts procurement, storage, and kitting.
• Use a labor-only EMS to focus on what they do best—building your boards.

This strategy works at any scale, helps prevent material-related delays, and maintains all your compliance requirements.

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Frequently Asked Questions (FAQs)

What is On-Time Delivery (OTD)?
On-Time Delivery (OTD) refers to how reliably suppliers deliver products by the agreed date. Most companies define it as receiving the full order (or at least 90–95% complete) by the originally promised dock date—unless a change has been explicitly approved.

Why do full-turnkey EMS providers often struggle with OTD?
OTD problems with full-turnkey Electronics Manufacturing Services (EMS) typically stem from material delays, not production issues. Since these EMS companies manage parts procurement, late components can easily disrupt schedules—especially for smaller customers who represent a small share of total revenue.

How can a 3PL provider help improve OTD performance?
A Third-Party Logistics (3PL) provider can handle materials procurement, inventory, and kitting efficiently. By having a 3PL manage the supply chain while a consigned EMS handles assembly, you reduce delays caused by material shortages and improve overall delivery reliability.

What is the difference between full-turnkey and consigned/labor-only EMS?
In a full-turnkey EMS, the manufacturer manages component sourcing, storage, and production. In a consigned or labor-only EMS, the customer supplies all materials, and the EMS focuses solely on manufacturing. Pairing a 3PL with a consigned EMS combines the strengths of both models.

Why is customer size important for OTD performance?
EMS providers prioritize their biggest customers—those who make up at least 10% of their revenue. Smaller customers often face delays because they receive less attention and priority, which can negatively impact OTD.

Can using a smaller EMS provider fix OTD problems?
Not necessarily. Smaller EMS providers may lack key certifications (like ISO 13485 or AS9100), may be located inconveniently, and often charge higher prices. Finding one that meets all compliance and budget requirements can be difficult.

How does splitting materials and manufacturing improve OTD?
By separating responsibilities—using a 3PL for materials and a consigned EMS for production—you eliminate bottlenecks and make each partner focus on their strength. This division reduces delays, increases visibility, and stabilizes delivery timelines.

What are the benefits of using a 3PL like Cofactr?
Cofactr offers specialized electronics logistics, including automated supplier tracking, 360° visibility into material status, complete bill of materials (BOM) procurement, and expert kitting services—all designed to streamline production and improve OTD.

Is the 3PL + EMS approach suitable for companies of all sizes?
Yes. 3PL providers and consigned EMS companies are typically size-agnostic. Their standardized processes and scalable logistics systems allow them to serve both small and large businesses.

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