Outsourcing Calculator

Use our popular Outsourcing Calculator to run 'what if' scenarios. Change variables and see how different scenarios could impact your business. Disclaimer.

When offshoring manufacturing to low-cost regions, OEM companies need to determine the savings lower labor rates contribute to the bottom line. Meanwhile, the biggest cost for most companies engaging electronics contract manufacturing partners is the materials cost of goods sold (MCOGs) for products being manufactured.

Whether outsourcing or offshoring your product manufacturing, the Outsourcing Calculator can help you uncover costs, and potential savings, as you evaluate low-cost manufacturing destinations.

Instructions
Input cost and rate variables in fields below. Press 'Calculate OEM Savings' to display results.

* Required fields

OEM INTERNAL FIGURES

Material Cost of Goods Sold (MCOGs)

$

*

ANNUAL cost of materials required for product / program.

Direct Labor Hourly Rate

$

*

OEM fully-burdened direct labor hourly rate (average).

OEM Cost Rate / Hour

$

*

Determine OEM internal cost rate per hour from items such as direct and indirect labor, utilities, supplies, square foot or meter overhead costs, additional space required, rents which the OEM will not be paying for because it will be outsourcing.

(Working backward: use above costs to determine hourly savings based on ANNUAL hours to build and ANNUAL number of units forecasted / to be manufactured)

Direct Labor Hours

*

ANNUAL direct labor hours required to build product / program.

Units Manufactured

*

ANNUAL number of units forecasted / to be manufactured.

MCOGs SAVINGS (%)

MCOGs (%) Contract Manufacturer Helps OEM Save

%

*

Based on discussions with contract manufacturer: enter ANNUAL percentage contract manufacturer says he can help OEM save by performing MCOGs procurement functions for the OEM

CONTRACT MANUFACTURER'S FIGURES

Direct Labor Hourly Rate

$

*

Direct labor hourly rate per the contract manufacturer.

Material Mark-up

%

*

Material mark-up (%) per the contract manufacturer.

S, G & A

%

*

S, G & A (%) per the contract manufacturer.

Profit

%

*

Profit (%) per the contract manufacturer.

OEM SAVINGS

Cost Rate / Hour Savings		$ 0.00
	Potential Savings	$ 0.00
	Material (MCOGs) Savings	$ 0.00
Total Annual Savings		$ 0.00

(OEM Cost Rate / Hour Savings) x (OEM Direct Labor Hours)

ANNUAL amount contract manufacturer can save the OEM on materials cost vs. ANNUAL cost OEM would incur for procurement otherwise.