Electronic OEM equipment firms sourcing EMS manufacturer services can take control of the narrative early and manage EMS provider perceptions when engaging contract electronics solutions providers. Doing so can help set the tone to achieve more detailed quote responses, and possibly more favorable contract service level agreements, during the request-for-proposal (RFP/RFQ) phase.
- Negotiated pricing to be based on an acceptable tiered volumes for the OEM customer’s product.
- All bill-of-materials (BOM), costs of materials, rates, markups and formulas are to be supplied by the EMS manufacturer quarterly to support pricing.
- Country-of-origin (COO) data, at the component level, to be supplied initially by the EMS manufacturers, and at 12-month intervals.
- EMS manufacturer prices are to be adjusted quarterly based on changes to materials, labor and tiered volume achievements following the agreed upon EMS fees and services pricing model in effect.
- Some components source and pricing maybe managed by the customer. These will be agreed upon, in advance.
- Out of scope charges are to be supplied quarterly by the EMS manufacturer and may be paid as a separate charge or rolled into the subsequent months product costs at OEM customer’s discretion.
- All OEM outsourcing program fixtures, software programs, processes and intellectual property development billed to, and paid for, by OEM customer become the property of OEM. Non-recurring engineering (NRE) charges must be detailed as to precisely what the OEM customer is paying for – and include title and ownership.
- Purchase price variances (PPV) and cost reductions are to be passed on to the OEM customer at 100% rate in the first full quarter of availability.
- Any EMS manufacturer rebates or refunds received, resultant in any way, from material purchases for the OEM customer’s programs are to be considered in material price reductions offered to the OEM customer.
- The OEM is to be offered prices equal to, or better, than any other customer of the EMS manufacturer, that is consistent with the OEM customer’s program volume.
- The OEM is entitled to their prorated percentage share of any rebates and volume, based on backend pricing offered to the EMS manufacturer by component suppliers and vendors, through quarterly cost reductions.
- The OEM customer reserves the right to audit EMS manufacturers invoices as it relates to data represented in establishing pricing for the OEM customer program(s).
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