Most people on either side of the quote (OEM and EMS) focus on raw materials because materials is proportionally a larger (always estimated at 65% to 85%) of MCOGs, while the labor falls to a second priority.
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BOM Management
EMS manufacturers incorrectly calculate manufacturing labor and process fees for quotes that unfairly raise OEM pricing in RFQ phase
How coronavirus changes manufacturing supply chain spend and inventory management
Manufacturers are rolling back two to three years, any progress they previously achieved toward Industry 4.0 as budgets are re-evaluated and so are new paths forward.
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EMS manufacturing direct labor checklist in OEM program costs and pricing EMS supplier quotes
Key aspects when measuring direct labor performance in EMS manufacturing factories, with links to EMS KPIs and cost reduction and cost modeling OEM contract manufacturing.
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Estimating true manufacturing cost of goods sold
In an ideal world, raw material inventory is pipelined, scheduled for production and manufacturing functional support staffing, shipping and commit schedules. Its a FIFO system (first in, first out).
How engineering changes impact OEM customer costs in EMS manufacturing factories
OEM equipment manufacturers already pay excessive customer fees to their EMS and ODM suppliers. With every engineering change order (ECO) or engineering change notice (ECN) any manufacturer wants to be able to analyze impact to time, cost, quality at time …
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Contract manufacturer (internal) cost vs OEM quoted price vs OEM target cost
Savvy electronic OEM equipment manufacturers never give contract manufacturers a costed bill-of-materials (BOM). How you determine your lowest product landed cost (target price) is determined by obtaining accurate information about your contract manufacturing solutions provider. This article covers achieving timely …
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How OEM equipment manufacturers can negotiate contract manufacturing to find hidden profits and reduce annual spend
Access detailed manufacturing cost models to identify PPV and drive down quote pricing and lower annual spend.
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Look beyond labor and S,G&A for contract manufacturing quote cost models to determine total landed costs
Finding manufacturing ‘should cost’ and lowest total cost of ownership (TCO) versus piece part pricing for OEM equipment manufacturers requires intimate knowledge of EMS manufacturing and ODM provider internal costs. Add to this, the various geographies and currency rates while …
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EMS manufacturing profit center: Production vs inventory costs
EMS manufacturers make healthy profit by warehousing raw materials and finished goods inventory (FGI) for OEM customers. Most OEM equipment companies don’t know how to identify these hidden, internal EMS costs (OEM fees) and, EMS providers do not accurately break …
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Avnet adds no value confirms Texas Instruments: How OEMs save and why more component vendors will follow TI strategy
I’ve managed and advised contract electronics divisions for years and noticed long ago the cozy relationship electronics components distributors like Avnet, Arrow, Future, TTI, Mouser and others have with EMS manufacturers. Beyond moving boxes around, distributors add no real …
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