Some EMS providers can drive customers crazy with frequent periphery costs. And while publicly traded electronics OEMs tend to focus more on cost reductions than private firms, EMS program management can drive good revenue streams off customer programs because of these costs.
Sometimes OEMs bring this on themselves depending on program requirements: build-to-order OEM programs under $’n’ million in size and below a minimum threshold for many EMS providers therefore providers are telling OEMs they won’t allocate a dedicated team to your program.
And if you are placing work orders only a few times a year the EMS provider can forget particulars about your program, which adds to complexity in the OEM-EMS relationship for both parties and can impact product quality.
More work for OEMs
So, OEM programs with mixed technology and lots of proprietary parts, SoC and older product/tech designs, some box-build high level assembly (HLA) requirements, and long product sales cycles need to work harder to be attractive to potential EMS firms or risk EMS providers opting out participating in the OEM’s RFQ phase.
One way OEMs can help get potential EMS partners to commit includes being open to cutting change orders and adding to your AVL to make things easier for EMS providers to get through their materials acquisition cycle. EMS providers, in general, want to clear a kit and get it to the production floor fast.
Yet every OEM seeks high quality EMS partners who is well run and can manage through these challenges.
OEM cash in advance payments also don’t hurt.
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