If your contract electronics manufacturing services (EMS) partner claims they have access to best pricing, and they purchase components in bulk to drive lower component costs for you — ask them to show you. Chances are, the contract manufacturer will show you a dashboard of material ‘Buy v Build’ signals tied to your work orders for your program on the production floor and generated from an insufficient third-party materials demand SaaS vendor.
But don’t get distracted.
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Some contract electronics providers use in-house built, or SaaS vendor platforms, to analyze demand patterns and production capacities and then try to determine optimal purchase order management, inventory levels and buffer requirements.
But this does not provide insight for materials cost of good sold (MCOGs) at the line item level.
Other providers might use machine learning algorithms to analyze demand patterns or predictive analytics, or statistical forecasting models, but this also does little contributing to optimizing your program MCOGs and drive total landed cost targets for your programs.
Remain focused on the electronics provider claim of ‘lowest components pricing’ for your bill-of-materials (BOM), and ask them to expand and visualize their materials procurement and management expertise, in the following manner, below.
Here’s what you do.
First, tell the provider they can obfuscate any data for privacy, and ask them to show you a map of a series of bulk materials purchased (with obfuscated part numbers).
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