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80 Metrics to focus EMS provider materials management and increase EMS profits

By Mark Zetter

Electronics components on reelsTHE ELECTRONICS MANUFACTURING SERVICES (EMS) business can be a zero-sum game for many EMS providers given many EMS providers often take on new OEM programs at a loss or, in some best case scenarios, with hopes just to break-even until cost-savings can be designed into products and manufacturing efficiencies can start to take hold.

Talk to anyone familiar with the EMS sector and they’ll tell you the materials cost of goods sold (MCOGs) in most EMS business models can run between 75% to 80% (or more).

With this point in mind, one can see how any EMS provider wanting to be profitable must focus management efforts on managing materials and the materials controls aspect of his business (purchasing, planning, scheduling, inventory control…).

This can be a daunting challenge considering the EMS industry norm for ‘scrap’ for an EMS model should be kept below 1%.

The following are 80 key metrics EMS provider materials managers should focus on when responsible for what many consider to be the lion’s share of an EMS model’s opportunities for profit.

Metrics managed internal the EMS provider can be done so and presented / updated daily; weekly, monthly, quarterly… or to whatever frequency helps EMS providers maintain focus to meet their EMS (and let’s not forget OEM customer) business objectives. (Metrics listed are not presented in order of importance)

80 Key metrics EMS providers must focus on to improve materials management and increase EMS profits

  1. Master production scheduling: Number (#) of master production scheduler (MPS) changes within next 4 weeks
  2. # of MPS changes within 5-8 weeks out
  3. # of MPS changes within 9-13 weeks out
  4. % performance to [insert your company name here] commit
  5. Units forecast / requested
  6. % performance to [insert your company name here] loading / OEM customer request
  7. # of EDI lines not correct
  8. Monthly MPS / COGS Report
  9. Purchasing: # Part numbers (See, also: Sourcing/planning drives materials)
  10. # Part numbers added during period
  11. # Part numbers deleted during period
  12. # Purchase order (PO) numbers placed
  13. # Purchase order (PO) lines new
  14. # Purchase order (PO) lines changed
  15. # Purchase order (PO) lines canceled
  16. # Part numbers on pull programs
  17. # Part numbers on regular order programs
  18. On time delivery percentage (% early, % on time, % late)
  19. $ Purchase price variance (PPV)
  20. $ Value NPV recovered from customer
  21. $ Value PO receipts planned for next month
  22. Track # various key part numbers, whether from OEM, EMS provider, per distributor
  23. # Purchase order lines past due
  24. # Requisition lines open
  25. Planning: # Printed circuit board assembly (PCBA) shortages in 1 week window for EMS provider
  26. # Printed circuit board assembly (PCBA) shortages in 1 week window OEM
  27. # Printed circuit board assembly (PCBA) shortages in 1 week window per distributor(s)
  28. # Box build shortages in 1 week window EMS provider
  29. # Box build shortages in 1 week window OEM
  30. # Printed circuit board assembly (PCBA) line / hours downtime due to shortages by EMS provider
  31. # Printed circuit board assembly (PCBA) line / hours downtime due to shortages by OEM
  32. # Printed circuit board assembly (PCBA) line / hours downtime due to shortages by distributor(s)
  33. # Box build assembly line / hours downtime due to shortages by EMS provider
  34. # Box build assembly line / hours downtime due to shortages from OEM
  35. Inventory turns this month
  36. Inventory turns projected next month
  37. $ Inventory value in [system] this month
  38. $ Inventory value projected in [system] (i.e., ERP systems) next month
  39. $ Inventory value per [system] this week
  40. $ Exposure zero demand (No MPS / No bill of materials (BOM))
  41. $ Exposure inactive surplus (No MPS / Yes BOM)
  42. $ Exposure active surplus (Yes MPS / Yes BOM)
  43. # A, B, and C part numbers (purchased) (based on $ value per part segment where $ value for A > B > C…)
  44. Warehouse: # Line items received in [system]
  45. # Line items challenged in [system]
  46. # Line items issued in [system]
  47. # Line items returned [system]
  48. # Line items into [system] materials review board (MRB)
  49. $ Into [system] MRB
  50. $ Out of [system] MRB
  51. $ MRB in [system]
  52. $ All Inventory in [system]
  53. Square footage warehouse(s)
  54. $ Inventory value in [system] per stockroom / area(s)
  55. $ Inventory value in [system] in repair / MRB area(s)
  56. $ Inventory value in [system] related to cycle count challenges
  57. $ Inventory value in [system] for PCBA work-in-progress (WIP) area(s)
  58. $ Inventory value in [system] for box build assembly WIP area(s)
  59. $ Inventory value in [system] for PCBA test areas
  60. $ Inventory value in [system] for untested printed circuit boards
  61. $ Inventory value in [system] for main stock area(s)
  62. $ Inventory value in [system] per receiving inspection area(s)
  63. $ Inventory value in [system] per various distributor warehouse
  64. $ Total Inventory value in [system] per EMS provider location / region
  65. # Hourly paid employees graveyard shift
  66. # Hourly paid employees day shift
  67. # Hourly paid employees swing shift
  68. # Hourly paid employees in inventory control
  69. # Hourly paid employees MRB
  70. Inventory control: # Cycle count requests for [system]
  71. # System cycle counts
  72. $ Scrapped in [system]
  73. $ Positive-adjusted cycle counts in [system]
  74. $ Negative-adjusted cycle counts in [system]
  75. Cycle count accuracy by location(s) in [system]
  76. Shipping imports / exports: # Shipments made to various location(s) (USA, Europe, intra-company…)
  77. # Shipments received from various location(s)
  78. Quotes: # Part numbers quoted
  79. Engineering change orders (ECO): # ECO received
  80. # BOM lines affected

There are at least two or three dozen more metrics not listed above. Know something not on the list? Are some metrics missing you feel should be included? Share your thoughts below.

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