This article breaks down the outsourcing cost and savings analysis for an OEM outsourcing program while also presenting the contract manufacturer’s cost of performing supply chain management services for the OEM customer’s business.
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Benchmarks & Best Practices
OEM cost reductions in vertically integrated electronics services providers
OEM audit of contract electronic services and EMS financial due diligence
Are EMS provider sales falling or is production rising too fast? OEMs should ask these direct questions and look at EMS financial metrics in a particular way.
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Thinking of re-shoring manufacturing electronics? Read this
Whether in the US, India, China, Mexico or other geographies, companies that outsource non-essential activities achieve a greater ROIC because of fewer fixed costs. One reason is they don’t carry as many fixed costs. But, there’s more.
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VO Lean Outsourcing Seminar Testimonials Praise Program – New Dates Added
The seminar instructor, Eric O. Olsen, Ph.D., works closely with the University of Toyota, Toyota's internal training operation in North America. "For many companies, outsourcing is going to happen. It can either happen in a controlled fashion or it can happen in an uncontrolled fashion", says Dr. Olsen.
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Contract manufacturing in Mexico
Mexico has proven to be a popular location for contract manufacturing products for North American and European OEMs for products that have a quick time-to-market turnaround requirement or high transportation costs.
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Original design manufacturers (ODM) and contract electronics manufacturers
An ODM manufactures products from its own designs, which are then sold under an OEM brand. The ODM usually owns the rights to the intellectual property that goes into making the product. ODMs can tend to make more profile than EMS provider because ODMs carry more risk.
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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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China v. India for your product manufacturing
In the Philippines, where the Chinese population is 3 percent, it also manages to control 70 percent of all business. Thailand’s population is 3 percent Chinese, and yet the Chinese control 60 percent of the trade. India does have limitations. It does no executive any good to have printed circuit boards or finished goods inventory in an Indian factory and be unable to reliably move inventory to, and beyond, air or seaport in a timely and efficient manner.
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Program management responsibilities and activities
Program management responsibilities within a contract manufacturer can be divided into internal efforts and external efforts and in most instances, all OEM outsourcing program information flow from the customer destined for the contract manufacturer should pass through contract manufacturing program management.
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Cost reduction standards in contract electronics?
Rule of thumb states that product development determines 80% of a product's cost. The product concept phase alone can equate to roughly 60% of cost.
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