For some electronics equipment manufacturers, the costed bill-of-materials (BOM) is becoming less of a variable in their contract electronics manufacturing outsourcing program strategy. Ultimately, it comes down to total landed cost. But how do you know you are getting BOM best pricing for line items?
A good number of contract manufacturing supply chains failed during Covid. SaaS engineers, and those responsible for supply chains, forgot who implemented the supply chain systems and processes resulting in many SaaS products becoming nothing more than a pretty dashboard when time-accurate forecasting and demand analysis was needed most. Think about all of the analysts who create sexy Excel pivot tables.
Some electronics equipment manufacturers are subject to the United States Trade Agreements. This means their products and equipment must be manufactured or substantially transformed in the United States or a TAA designated nation. Trade Agreement Act (TAA) compliant countries include:
- World Trade Organization (WTO) government procurement agreement nations
- Free trade agreement nations
- Least developed nations
- Caribbean basin nations
Products are considered TAA compliant if they are manufactured or substantially transformed in the United States or any of the TAA designated countries that have a trade agreement with the United States. The TAA designated country list is sourced from the Federal Acquisition Regulation (FAR) and is current as of May 2023. Changes to the TAA designated country list are infrequent.
Examples of some TAA compliant products might include power supply systems, telecom equipment switches and console servers, transceivers, surge protectors and cables, to name a few. TAA compliance does not only apply to fiber optic products but also to other electronics equipment or IT-related products marketed and sold in United States.
TAA compliance is important for a number of reasons. Let’s look at US TAA compliant telecom industry fiber optics products, for example.
- Security – Fiber optics products manufactured in TAA-approved nations might better ensure US government communications are secured and free from espionage or sabotage.
- Quality standards – Fiber optics equipment that are TAA-compliant might be more likely to meet quality and performance standards. TAA compliant nations typically agree to manufacture while adhering to US standards.
There are various other reasons, including competitive pricing policies, job and worker protection, to name a couple.
SEE ALSO
Trade, tariff concerns sourcing EMS manufacturing programs
Bill-of-materials (BoM) strategy and pricing estimates
Then, there is also the General Services Administration (GSA), that directly impacts some equipment manufacturers. The GSA is an independent agency of the US government that helps manage and support basic functioning of federal agencies. GSA supplies products and communications for U.S. government offices, provides transportation and office space to federal employees, and develops government-wide cost-minimizing policies and other management tasks.
For electronics equipment manufacturers seeking TAA-compliant contract electronics EMS/CM providers, Venture Outsource uses a proprietary framework to help categorize contract EMS manufacturers suitable to your OEM outsourcing program spec requirements when vetting and selecting EMS/CM partners. We can also help with determining optimal total landed cost and target quote pricing when you pay for EMS services, including contract negotiations strategy designed protect your supply chain from events most likely to have real material impact to your bottom line.
Get list of EMS manufacturers for your requirements (Its free)
Save time and money. Find quality EMS manufacturers. Fast. Venture Outsource has a massive, global database of contract electronic design and manufacturing capabilities. Speak with a Provider Advisor.
“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 tell you matches we find for your needs, answer your questions and, can share EMS industry knowledge specific to your industries and markets.
