Depending on who you ask, the global EMS manufacturing market is expected to grow at 7 percent CAGR, reaching $670 billion by fiscal year 2021. Worldwide, electronics industry is between $1.7 trillion and $2 trillion and, only about 35 percent of this is outsourced and, 70 percent of this is sourced from low-cost geographies.
China has, by far, the largest percentage of global, outsourced production, today estimated at 40 percent. India, another market with vast potential for contract electronics, by contrast, has less than 1 percent — continues to be hit be setbacks — although suitable EMS manufacturing partners can be found there, while alternatives in South East Asia continue to gain market share and attract foreign direct investment.
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As nations and manufacturing regions compete to attract a larger portion of outsourced electronics OEM programs, and OEM companies develop outsource manufacturing cost model templates to enhance their contract manufacturing strategies, the approach changes for OEMs — how they execute the OEM RFQ phase and select contract manufacturing suppliers based on technical capabilities, capacity requirements, demand planning, budgeting (landed product cost forecasting) feasibility and, build-to-order (BTO)/configure-to-order (CTO) management.
Contract manufacturing due diligence, review and decision validation with pre-screened, shortlisted suppliers must be done from a position of deeper understanding.
Add to this, formulating, negotiating and, structuring EMS manufacturing contracts with robust clauses and thoughtful considerations applying industry best practices (v practices common in industry) can help OEMs put in place best case scenario KPIs and set the stage for improving EMS manufacturing supplier relationship management.
There is good reason why leading consulting firms like Deloitte, Ernst & Young (EY), KPMG, PricewaterhouseCoopers (PwC), Bain, McKinsey, Boston Consulting Group, Infosys, Booz Allen Hamilton, SAP Services, Cisco Advisory…regularly visit VentureOutsource.com for electronics outsourcing industry best practices and info for contract manufacturing supply chain problem-solving and decision validation.
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We understand electronics OEM decision makers are not interested spending scarce capital on in-house manufacturing capabilities and, depending on your company or division P&L, your cost of goods sold are critical in making or breaking the quarter. Your ability to bring product to your customers in a timely manner with the right quality, at the right price… is a cornerstone to your survival. To learn more about Venture Outsource research and consulting projects contact us here.
From materials procurement and supplier strategy, to selection and contracting with contract manufacturing partners, OEM commercial points of escalation (e.g., category managers, sourcing managers…) can benefit from a deep understanding of the total cost structures for outsourcing electronics assembly manufacturing.
For immediate access to EMS industry contract agreements, term sheets, RFQs and more please view this documents resource page.
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Save time and money. Find quality EMS manufacturers. Fast. Venture Outsource has a massive, global database of contract electronic design and manufacturing capabilities. Speak with a Provider Advisor.
“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
Advisors tell you matches we find for your needs, answer your questions and, can share EMS industry knowledge specific to your industries and markets.
