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It sounds weird, but I would encourage small companies to look at manufacturing locally. A company I used to work for in Ottawa manufactured small volumes of cameras locally (that really narrows things down). They used other companies in the area to etch and solder the boards (automatically), and then final assembly was performed entirely in the same office building where I worked.

The best part was, everyone was involved in the whole 'stack'. The engineering group I worked with handled QA, but also travelled downstairs regularly to help with manufacturing procedures. We watched assemblers and proposed design changes to make their jobs easier. The process created a virtuous cycle where the initial person laying out the board knew what kind of headers would be hard to connect in which enclosure (for example), and as a result the quality was very high while being competitive on cost.

I think an assembly process like that would have helped, for example, with the teething problems experienced by the Jawbone Up.

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