EMS providers are challenged to properly identify and capture indirect labor (IDL) effectiveness.
But this is necessary if EMS providers are expected to drive efficiencies for OEM cost reductions that are typically measured against MCOGs, only.
This makes it easy for EMS providers to overestimate IDL costs in quotes given to OEM prospects and existing customers.
To emphasize the importance of this, EMS IDL who are slow to act, use poor judgement and/or fail to execute interacting with vendors/suppliers in your supply chain and/or with internal EMS functional teams supporting your program(s) can tie up tens of thousands, or millions (even billions) of dollars of EMS working capital (depending on your program size). Each month. Every year.
This results in higher OEM customer costs (and pricing), plus lost opportunity cost incurred by both OEMs and their EMS partners.
OEMs and electronics manufacturing services (EMS) providers talk about Six Sigma, 5S methodology, kanbans, and lean but these only impact direct labor (on the production floor) but your supply chain’s second highest cost is S,G&A and none of these measure or drive real savings of costly EMS indirect labor.
Organizations with supply chain, departmental, and employee workflow that is more accurate and on time drive higer productivity and improved profitability.
Freeing up working capital driven by efficient employees who are effective at their work allows companies and supply chains to truly transform.
READ
 |
How corporate materials commodities strategy differentiates and transforms manufacturing |
Electronics OEM decision makers who are tasked with identifying and selecting contract electronics solutions providers face the truth that contract electronics solutions providers are not good at holding their costly indirect labor accountable (S,G&A).
Get list of EMS manufacturers for your requirements (Its free)
Save time and money. Find quality EMS manufacturers. Fast. Venture Outsource has a massive, global database of contract electronic design and manufacturing capabilities. Speak with a Provider Advisor.
“Was able to very quickly find details on the important elements of setting up EMS and ODM partnerships, talked with an advisor for personalized info on quality providers matching our requirements while getting up to speed quickly about the industry and connect with key staff from like-minded companies and potential partners. Great resource.”
— Jeff Treuhaft, Sr. Vice President, Fusion-IO
Advisors tell you matches we find for your needs, answer your questions and, can share EMS industry knowledge specific to your industries and markets.
