In a covid 19 manufacturing supply chain world the hyper-competitive EMS industry landscape is shifting as orders soften at many EMS manufacturers resulting in excess EMS factory capacity, EMS sales force redundancy, layoffs (e.g. Jabil 1,500) and increased EMS M&A interest from private equity firms for EMS businesses…particularly those EMS serving non-traditional EMS markets.
One silver lining in today’s EMS industry landscape is the opportunity for electronics OEM customers of EMS services (and prospective customers of EMS services formulating new outsourcing plans-of-action) to gain more control over the RFQ quote narrative when pricing EMS services and fees for OEM programs.
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This increased opportunity among OEM decision makers sourcing EMS services is being driven by the increasing complexity of pricing strategy presented by EMS providers – all while differentiation between EMS providers serving similar end markets decreases among providers with similar top line revenues.
And as competition among EMS providers increases, so does the need for providers to find creative ways EMS providers create, increase and protect EMS profits (including double- and triple-dipping of fees).
Meanwhile, as the demand from OEM buyers of EMS services to more tightly manage EMS spend, so drives the interest by these OEMs to want to look behind the curtain at how EMS pricing and cost drivers are determined.
OEM decision makers can read how other OEMs are achieving transparency of EMS quote pricing this while also satisfying OEM company mandates to conserve cash and manage EMS spend.
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