Credit Suisse estimates two-thirds of operating profit margins for EMS providers is likely derived from component purchase price variance: paying a discounted price for components from suppliers, while getting compensated by OEM customers as if paying standard prices.
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BOM Management
Hyper competition among EMS providers
New product introduction (NPI) quoting and the OEM
OEM companies engaged in quoting exercises for new product introduction (NPI) business services with contract manufacturers can expect the capable contract manufacturer to carefully lead the OEM through an established and itemized list of NPI product requirements and processes.
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What you should know about quote pricing, purchase orders, and ERP systems
Quote pricing and purchase orders are driven by purchasing, programs management, and materials management departments in the contract manufacturer. Read how these functions drive the process and the role of the enterprise resource planning (ERP) system.
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EMS Manufacturing global pricing drivers and OEM fees
Understand ways EMS providers determine costs for pricing quotes to OEMs for better contract negotiations outcomes and driving OEM program cost reductions.
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Checklist: Questions to qualify electronics original design manufacturers (ODM)
These question should help OEMs gain a better understanding of capabilities, tools, staffing experience, shortcomings… with ODM or EMS providers.
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