Rule of thumb states that product development determines 80% of a product’s cost. The product concept phase alone can equate to roughly 60% of cost. When bringing a product to market, it’s in executives’ best interest to get things done right, or as best as they can, the first time.
SEE ALSO
How to reduce costs from your manufacturing portfolio
Best practices for EMS manufacturing RFQ quotes
EMS Manufacturer internal cost vs OEM quoted fees vs OEM target price
Costly iterations can occur and generally tend to add up in cost quickly if/when product design changes are proposed once manufacturing ramps and volumes have increased since there is always a high likely-hood that one change may also force other changes that are now related in a product.
Meanwhile, the total cost of implementing the change may also not likely be recouped over the increasingly shortening product life cycles of most products. Add to this that very few companies really know how to keep track of costs associated with product changes and one can quickly see how it pays to think ahead.
When an OEMs outsources its product design activity, OEMs are not only paying for the services the contract manufacturer offers, they are also paying for the years of experience it took the contract manufacturer to develop the services and expertise it needs to support the services it offers.
Get a list of EMS manufacturers matching your program needs (Its free)
Venture Outsource has the largest, global database of contract electronics capabilities. Get a free list of contract EMS manufacturing companies matching your program needs.
“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.