Turnkey vs Consigned PCB Assembly: What Each Model Actually Transfers
"Which model is cheaper" is the wrong opening question
Most PCB assembly sourcing conversations open the same way. Someone asks whether to go turnkey — let the assembler buy everything — or consigned, where you buy the parts and ship them in. The discussion then turns into a comparison of material margin: the assembler marks parts up, so buying them yourself must be cheaper.
That comparison is not wrong so much as incomplete, and the part it leaves out is the expensive part.
Material margin is a visible, quotable, negotiable number. What you are also deciding, without seeing it on any quote line, is who absorbs the consequences when the material plan does not survive contact with reality. Parts go on allocation. A reel arrives short. A date slips by three weeks because one line item did. A board fails and nobody can agree whether the part or the process caused it.
Every one of those events has an owner. The engagement model is what assigns the owner, in advance, for most of them. The margin you saved is a fixed number; the exposure you accepted is not.
So the useful question is not which model is cheaper. It is: which of these risks do I want to be holding, and which do I want someone else contractually holding, when things go wrong?
What moves with material ownership
When you hand over purchasing authority, six things travel with it. They travel together — you generally cannot keep one and give away the rest.
- Purchasing authority. Who places the order with the distributor, in whose name, against whose account and terms. This also determines who holds the relationship when supply gets tight and allocation decisions get made by the distributor.
- Shortage risk. When a line item cannot be sourced at the quoted price or the quoted date, whoever holds purchasing authority is the one who has to solve it — by paying more, waiting longer, or proposing an alternate.
- Attrition and overage liability. Reels have minimums, placement generates scrap, and setup consumes parts. Someone has to own both the forecast and the variance from it.
- Schedule control. Assembly cannot start before the last part lands. Whoever buys the parts effectively owns the start date, which means they also own the explanation when it moves.
- The defect attribution surface. This is the one buyers underestimate. If the assembler bought the part and built the board, a failure is a single-supplier problem. If you bought the part and they built the board, every failure first has to be classified as a material issue or a process issue, and that classification is now a negotiation.
- BOM and IP visibility. A turnkey assembler sees your full BOM, your sourcing, and your cost structure. That may be entirely acceptable, or it may be a reason to hold specific line items back.
Read that list as a single bundle, because that is how it transfers. A model choice is a choice about the whole bundle.
The three things that do not move, whatever you sign
Here is the misconception that costs the most money: that going turnkey outsources responsibility for the design and for what counts as a good board. It does not. Three items stay with the buyer under every model.
1. Design responsibility. If the footprint is wrong, the polarity marking is ambiguous, or the part cannot physically be placed as drawn, that is yours. A good assembler will flag it during review and a less thorough one will build it as drawn. Neither outcome moves the responsibility. Turnkey buys you procurement, not design authority.
2. Final approval of alternates. An assembler can propose a substitute. An assembler can tell you the proposed substitute is electrically equivalent. An assembler cannot decide, on your behalf, that the substitute is acceptable in your application — because it does not know your derating, your environment, or your qualification obligations. If you let this decision drift, you have not delegated it; you have simply stopped making it. The mechanics of running that approval are covered in turnkey PCBA BOM risk and alternate part approval.
3. Acceptance criteria. What makes a delivered assembly correct is a document you own. Workmanship class, test scope, what constitutes a reportable defect — if these are unstated, the assembler will apply its house standard, and you will discover what that standard was during a dispute rather than before one. See defining PCBA test and inspection requirements in the RFQ.
The practical consequence: turnkey reduces the number of parties you manage, not the number of decisions you own. Buyers who expect otherwise tend to go quiet after handing over the BOM, and then re-enter the project at the first failure, without the declarations that would have let them argue their position.
Full turnkey: one accountable party, less visibility
Under full turnkey the assembler buys the bare boards and every component, builds, tests and ships. You supply design data, a BOM, acceptance requirements and a quantity.
What you gain is a single accountable party. A failed board is their problem to diagnose regardless of whether the cause sits in a part or in the process, because both were theirs. That single-throat-to-choke property is the main reason turnkey exists, and on low-to-mid volume work with a broad BOM it is usually worth more than the material margin.
What you give up is visibility and some control. You generally will not see which distributor each line came from or what each line cost. Sourcing decisions get made inside the assembler's own preferences, which are rational for the assembler and invisible to you.
Turnkey tends to fit when:
- The BOM is mostly standard, catalogue-available parts with real alternates.
- You do not have a purchasing function, or your purchasing function has no electronics distribution relationships.
- Volume is low enough that your own buying power would not beat theirs anyway.
- You want failure diagnosis to be unambiguous.
It tends to fit badly when your BOM contains parts you are contractually obliged to source yourself, parts under your own long-term pricing agreement, or parts whose provenance you need to be able to prove independently.
Note one thing turnkey does not automatically give you: traceability of what was actually fitted. If you need to know lot codes and date codes for what shipped, ask for it as a deliverable. See shipment document package, CoC and lot traceability.
Consigned: you keep control, and you keep the consequences
Under a consigned (free-issue) model you buy every component and ship it to the assembler, who provides labour, equipment, process and test. You own the material; they own the build.
What you gain is real: direct control over sourcing and provenance, your own distributor pricing, the ability to use parts you already hold, and no material markup. For buyers with an established purchasing function and a stable BOM, these are substantive advantages, not theoretical ones.
What you accept is the full material risk and a second, less obvious cost: the attribution boundary. Every defect now arrives at a fork. Was the part bad, or was it placed, heated or handled badly? Both parties have a financial interest in the answer, and unless you defined upfront what evidence settles it, you are negotiating from nothing. That boundary is exactly what who owns the defect when fabrication and assembly are split deals with in the fabrication-plus-assembly case; the same mechanics apply to material-plus-labour.
Consigned also moves the clock onto you. The line is booked, the kit is incomplete, and the assembler is now holding capacity it cannot use. What happens next — rebooking, idle-time charges, priority loss — should be written down before it happens, not discovered. Material ownership and who pays for the idle line walks through those transfer moments in detail.
Three things a consigned model needs that buyers routinely skip:
- A kit specification. Quantity shipped per line including attrition, packaging format (reel, cut tape, tray, tube), and what happens to leftovers. Loose parts in a bag are not a kit.
- An incoming-material disposition rule. What the assembler does when a consigned part arrives damaged, short, mislabelled, or with an expired moisture-sensitivity bake window. Without a rule, the default is a stopped line and an email thread. Handling obligations are covered in moisture-sensitive device handling in the PO.
- A return path for unused material. Including who pays freight and whether partial reels come back.
Partial turnkey: the model most real programmes end up in
Partial turnkey is not a compromise for the indecisive. It is a deliberate split: the assembler buys the commodity portion of the BOM, and you consign a named list of exceptions.
The exception list usually contains:
- Parts under your own pricing agreement or long-term supply contract.
- Parts your customer or your qualification requires you to source from a named supplier.
- Parts with provenance obligations you must be able to evidence yourself.
- Long-lead items you already bought months ago.
- Anything whose cost you do not want visible.
Done well, this gets most of turnkey's single-accountability benefit while protecting the handful of lines where control genuinely matters.
Done badly, it creates the worst outcome available: a split BOM with no written split. If the list of consigned lines lives in an email rather than in the contract, both parties will assume the other is buying some item, and you will find out at kit review — or at the stopped line.
The rule for partial turnkey is simple: the split must be line-item explicit and version-controlled. Not "we'll supply the ICs" but a list, by part number, attached to the PO, with a version. When the BOM is revised, the split list is revised with it.
What the model has to turn into on paper
A model choice that exists only as a word on the quote is not a model choice. Whichever you pick, these items have to appear in the RFQ or the PO, or the model will not hold under stress.
Under any model:
- Acceptance criteria and workmanship class, stated by you.
- Test and inspection scope, with the pass/fail authority named.
- Who may approve an alternate, and in what form that approval is recorded.
- What documents ship with the goods.
- Change control: what happens to the agreement when the BOM is revised.
Additionally under turnkey:
- Whether quoted material pricing is firm, and for how long. Component pricing moves; an indefinitely firm material quote either contains a buffer or will be revisited. Quote validity and price adjustment terms covers the same mechanics on the fabrication side.
- Whether you get visibility of actual sourcing, and whether you can veto a distributor or a grey-market purchase.
- What happens to surplus material after the build.
- Whether unit price is tied to the quantity quoted, and what a smaller release does to it.
Additionally under consigned:
- The kit specification, including attrition quantities per line.
- The incoming-material disposition rule.
- Idle-line and rebooking terms when the kit is late or short.
- Return terms for unused material.
- Whether the assembler is permitted to buy a missing line on your behalf, and up to what value.
Additionally under partial turnkey:
- The versioned, line-item split list attached to the PO.
- A default rule for lines added to the BOM after the split was agreed. Without this, every revision reopens the question.
None of this requires an unusual contract. It requires that the answers exist somewhere other than in two people's assumptions.
Choosing wrong is recoverable; choosing silently is not
Models get changed mid-programme more often than people admit, and the change itself is not the problem. Moving from consigned to turnkey after a few builds is normal — you have learned which lines are painful and decided to stop touching them.
What does not recover cleanly is a model that was never explicitly agreed. The symptoms are recognisable: nobody can say who was supposed to buy a particular line item; attrition is being argued about retroactively; a failure analysis has stalled on whether the part or the process caused it; the assembler is holding surplus material neither party has claimed.
Each of those is the same underlying defect — a transfer that happened by assumption rather than by agreement.
So if you are mid-programme and the above sounds familiar, the fix is not to pick a better model. It is to write down the model you are actually operating, line by line, and have both parties sign it. Then change it if it is wrong.
And if you are at the start: pick the model that puts each risk with the party best able to carry it, write the five-or-six items above into the RFQ, and let price be the last conversation rather than the first. When you are ready to put real inputs in front of a supplier, the PCB assembly service page and the quote request are the right entry points; production capabilities covers what sits behind them.
FAQ
Is turnkey always more expensive?
On material line cost, usually yes, because the assembler's margin is in there. On total programme cost it depends on what your own purchasing effort costs, whether your buying power actually beats theirs, and what a single stalled failure analysis costs you. The material delta is the easiest number to see and rarely the largest one.
If I go turnkey, do I still need to specify acceptance criteria?
Yes, and more carefully rather than less. Turnkey removes your involvement in sourcing, which means the delivered result is the only thing you still control. If correctness is undefined, you have outsourced the build and kept none of the leverage.
Can I go consigned for everything including bare boards?
You can, and some buyers do when they have a fabrication supplier they trust and want to keep. Understand that it widens the attribution surface again: bare board, components and assembly become three separate accountabilities. The split-accountability mechanics are covered in who owns the defect when fabrication and assembly are split.
Who pays when a consigned part arrives short?
Whoever the contract says, which is why it needs to say. In the absence of terms, the practical outcome is that the assembler stops, you scramble, and the schedule cost lands on you by default — because you held purchasing authority.
Does partial turnkey cost more to administer?
Yes, modestly, and that cost is the point. You are paying a small coordination overhead to keep control of specific lines. If the exception list is long enough that administering it is painful, the honest answer is that you are running a consigned model with extra steps.
Will an assembler quote all three models?
Most will quote turnkey and consigned readily. Partial turnkey needs the exception list first, because without it there is no defined scope to price. Sending a BOM and asking for "a partial turnkey price" produces an assumption, not a quote. Scope alignment is covered in PCBA quote comparison and scope boundaries.
Does the model affect first-article requirements?
Not what the first article has to prove, but it does affect who is accountable if it fails for a material reason. Define the release terms independently of the model — see first article inspection report release terms.
What if a part goes end-of-life mid-programme?
The model determines who notices and who proposes, not who decides. Under turnkey the assembler will usually surface it and propose a substitute; under consigned you will find it yourself. In both cases the approval decision is yours. See component EOL and substitute approval.
Where do I read up on the surrounding items?
Process background sits in the PCB assembly process guide; attrition wording in material attrition and overage declaration; fixture cost split in test fixture ownership and cost split; defect judgement in solder joint acceptance class and defect disposition. For the overall range of build options start at products and capabilities, or go straight to contact.
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