Electronic contract manufacturing (outsourcing) is a networked business model benefiting electronic OEM equipment manufacturers with valuable benefits provided by EMS manufacturers, (but with some unstated costs like the loss of control and visibility). Loss of control can be OEMs (and EMS firms) overpaying vendor and supplier purchasing invoices, incorrectly billing OEM customer invoices (by EMS manufacturers), inaccurate (over or under) accruing reserves, EMS manufacturer over or under-performing on OEM customer program specs and commitments, and more.
Add to the above, whether OEM or EMS enterprise, another challenge is tying together proper alignment between the manufacturer’s financial functional groups and manufacturing operations – with the former typically taking a longer-term perspective while also not have the insight into operations that the manufacturing teams are exposed to immediately on a day-to-day basis.
Finance departments responsible for proper manufacturing compliance are tasked with effective identification and reporting of changing product value and manufacturer risk elements in the global enterprise supply chain.
Manufacturer financial statement restatements
Several studies over the years by the US General Accounting Office, Center for Audit Quality, PwC, The Deloitte Institute for Audit Innovation & Quality, Huron Consulting Group and others have revealed over the years that manufacturers have more financial report restatements than any other industry and citing inventory quantities and valuations, reserves and contingencies, and revenue recognition as primary reasons and each difficult to monitor properly in global, contract manufacturing business models with many moving parts.
Get a list of EMS manufacturers matching your program needs (Its free)
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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
Advisors have access to detailed information on listings in our global database and can help you compare provider service capabilities to better match your program needs. Speak with a Provider Advisor. This free service is for electronic professionals working in OEM brand companies.
