Industry Documents - Manufacturing contracts, service level agreements, evaluation forms, templates

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Industry Documents - Manufacturing contracts, service level agreements, evaluation forms, templates

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Total landed cost considerations for OEM electronics outsourcing

By Staff

Your baseline and electronics outsourcing total landed costs will be different for every program you outsource.

What are your current landed costs?

Determining your baseline is something we’ve seen determined incorrectly a high number of times. Typically, people simply dive into this process and they use EMS provider responses to their RFQs and you end up making your decision in a isolated manner and move forward.

This isn’t necessarily the wrong decision path, but if you don’t understand your baseline, one year later you could find yourself asking, why did I outsource? Did I achieve my objectives? It could be difficult to find the right answers. (See: Should cost analysis)

What’s more important is, polling your stakeholders, especially your finance team and executive management. You want to be certain the right budgets are created. In understanding your baseline, you also need to understand what’s changing.

Maybe something that’s being insourced today gets outsourced tomorrow and all of a sudden, it moves from one finance cost bucket to another bucket and functional teams and senior management won’t understand this if it’s not clearly explained up front. (READ: How to drive cost out of your manufacturing product portfolio)

How to build costing modelers for contract electronic programs

Understanding your baseline and articulating this internally (what will be happening relative to your baseline) is critically important to understanding if you’re going to be successful and therefore also be able to manage the expectations within your organization.


Knowing who are your internal stakeholders are and keeping them in the loop is key to your success. The obvious stakeholders are within your own supply operations; your supply chain team, you manufacturing team… But there are numerous other stakeholders as well. Make a list.

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