Like most niche industries the electronic contract manufacturing (CM) industry has some peculiar ways of conducting business. The following is an actual sample electronic OEM’s letter sent to a CM or electronics manufacturing services (EMS) provider requesting production quote pricing against a bill of materials (BOM) for a specific OEM program.
To put this BOM request-for-quote (RFQ) letter into perspective know the OEM writing this particular RFQ has done previous work with the EMS provider receiving this BOM RFQ letter. Here, the OEM also informs the EMS provider the OEM’s current EMS provider is not aware the OEM program being quoted will be transitioned from the OEM’s existing (current) EMS solutions provider to the EMS provider announced as the OEM program winner.
Dear [EMS provider],
Previously, you provided PCB assembly and box build quotes that were converted into a competitive price matrix for product supply. In addition, several EMS providers with competitive prices are being asked to provide itemized BOM quotes in order to evaluate competitiveness on the procurement of the materials for our product. (Related: Top 10 impacts to EMS/ODM quote pricing OEM programs)
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In summary, we expect your quote submission to have the following:
Several commodities are sourced by us [the OEM], those being custom parts or with tooling investment already incurred. At this time, those products will not require quotation. Printed circuit boards are in the process of being controlled by [OEM]. Gerber files are included in this RFQ package.
Our intent with this RFQ package is to validate the business assumptions on our strategic direction and select the EMS provider to discuss our comprehensive supply agreement for the complete turn key box build assembly of our products.
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Program volumes
We are currently looking at volumes of 1,000 to 2,000 [OEM] [P/N A] and [P/N B] per month (200 to 400 chassis per month.) By the end of [year] we predict to be shipping 4,000 to 5,000 [OEM] [P/N A] and [P/N B] per month (600 to 800 chassis per month)
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