Senior operations executive and GlobalNet member Steve Linahan writes how EMS providers live and die by purchase price variances (PPV). In the article, Steve talks about OEM-EMS contract service agreements and how EMS providers use elaborate cost v. price methods, or activity based costing…
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BOM Management
Nine key points help OEMs negotiate better contract service agreements with EMS providers
Ways OEMs avoid electronics NPI mistakes
Excess inventory is a liability to both the EMS provider and OEM. This exposure must be watched closely by both since the EMS provider will undoubtedly come back to the OEM looking for payment for exposed material left over. If OEMs feel the EMS provider is not practicing proper procurement practices, OEMs should push …
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Hyper competition among EMS providers
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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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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