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Problems and concerns big or small, each is important. A sampling below of the different questions OEMs ask as they formulate strategy and plans of action for selecting and managing contract manufacturers. Sprinkled into this list are various questions that have risen in manufacturing litigation requiring expert testimony about EMS sourcing.
Collectively, this list can remind OEMs how important it is to do proper due diligence to improve your chances of finding the right contract manufacturer best suited for design and assembly services matching your requirements.
OEM questions in various industries and markets
“Can you suggest electronics providers in eastern US with production capabilities also located in China and Eastern Europe with reliable IP protection?”
“What are the top contract clauses or functional department areas where contract EMS manufacturing providers might hide margin?”
“In quote pricing for SMT and PCB assembly services, what percentage amount of overhead would be expected?”
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“One of our CEM partners is tier-2. They agree to be liable for shipment delays due to manufacturing floor issues. This is fine but we also want them to be liable for issues with other, third-party vendors they partner with on our behalf that might also cause delay. How can we de-risk liability in our contract terms or at least leverage them to have more concern about how their suppliers perform?”
“As a Fortune 100 OEM, we have good leverage and favorable terms with our current suppliers. A new (additional) CEM wants to renegotiate terms with these suppliers? How common is this request?”
“What are some best practices/methods for OEMs to drive lower cost direct labor rates with EMS partners?”
“What do EMS providers like seeing from their OEM customers which makes one OEM customer stand out among others the EMS is servicing so if push comes to shove a more favorable customer has a better chance gaining access to components on allocation?”
“What are the bare minimums needed for an RFP template for an EMS contract? What are ideal things we should ask about in contract negotiations?”
“Can you please recommend a high mix/low volume PCBA supplier in the Philippines? Given the current wage trends in China we want to explore possible alternatives.”
“What are the top 50 EMS manufacturers by revenue? But unlike some lists available online, we only want to know revenues from EMS and ODM services, specifically, and not including revenues from an ODM’s or EMS provider private label product sales?”
“What are the top BOM-costing tools and platform used by EMS providers when determining costs to price our program?”
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“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
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