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Contract manufacturing consultants de-risk OEM outsource design and assembly

By VentureOutsource.com Staff

Independent contract manufacturing consultants in EMS sourcing with extensive electronics manufacturing best practices knowledge. View project examples.

Problems and concerns big or small, each is important. A sampling below of the different questions OEMs ask as they formulate strategy and plans of action for selecting and managing contract manufacturers. Sprinkled into this list are various questions that have risen in manufacturing litigation requiring expert testimony about EMS sourcing.

Collectively, this list can remind OEMs how important it is to do proper due diligence to improve your chances of finding the right contract manufacturer best suited for design and assembly services matching your requirements.

OEM questions in various industries and markets

“Can you suggest electronics providers in eastern US with production capabilities also located in China and Eastern Europe with reliable IP protection?”

“What are the top contract clauses or functional department areas where contract EMS manufacturing providers might hide margin?”

“In quote pricing for SMT and PCB assembly services, what percentage amount of overhead would be expected?”

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“One of our CEM partners is tier-2. They agree to be liable for shipment delays due to manufacturing floor issues. This is fine but we also want them to be liable for issues with other, third-party vendors they partner with on our behalf that might also cause delay. How can we de-risk liability in our contract terms or at least leverage them to have more concern about how their suppliers perform?”

“As a Fortune 100 OEM, we have good leverage and favorable terms with our current suppliers. A new (additional) CEM wants to renegotiate terms with these suppliers? How common is this request?”

“What are some best practices/methods for OEMs to drive lower cost direct labor rates with EMS partners?”

“What do EMS providers like seeing from their OEM customers which makes one OEM customer stand out among others the EMS is servicing so if push comes to shove a more favorable customer has a better chance gaining access to components on allocation?”

“What are the bare minimums needed for an RFP template for an EMS contract? What are ideal things we should ask about in contract negotiations?”

“Can you please recommend a high mix/low volume PCBA supplier in the Philippines? Given the current wage trends in China we want to explore possible alternatives.”

“What are the top 50 EMS manufacturers by revenue? But unlike some lists available online, we only want to know revenues from EMS and ODM services, specifically, and not including revenues from an ODM’s or EMS provider private label product sales?”

“What are the top BOM-costing tools and platform used by EMS providers when determining costs to price our program?”

“What are the best ways we can apply pressure on EMS margins in our favor while still allowing our EMS partner to earn their profit and stay in business?”

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“Who are the leading CM factories in Mexico that can do very large-scale systems-level integration turnkey with full product design? We have a fully-staffed engineering team.”

“Which Asian EMS providers are most suited/qualified in production of satellite communication equipment?”

“We want to keep our outsourced manufacturing and design in Korea. Which EMS providers do you recommend here?”

“Which EMS manufacturers have the best CRM implementation to also handle OEM extended customer FOB tracking?”

“We are broadening our in-house EMS outsourcing team to complement our growing OEM product line. In hiring a EMS category manager and deepen our internal PM capabilities, which EMS category management qualities should we look for?”

“How competitive is Flex v Jabil, scale advantages or lack thereof, strategy, etc?”

“How do US and EU OEM view Singapore as a EMS and logistic hub v Vietnam and Malaysia?. We are also considering Indonesia. We want three more EMS or ODM suppliers for consideration.”

“How does Flex calculate ROIC? With MCOGs contributions as a base, its been difficult to break out their RAW materials cost and we are trying to figure out what our programs should each cost.”

“We do not have historical yield info for our new product, obviously How can we be sure our EMS partner is managing against too much MRB and scrap as we progress to production volume?”

“You know our program complexity and value-add, how long should cost reductions last with our provider?”

“How much liability as industry average are CEMs willing to take on in design agreement contracts?”

“What are some best examples how to handle the engineering changes (ECOs) at EMS manufacturer supplier sites when we have different buying units and forecasts of the same PCBAs?”

“We’re top of heap. OEM in our sector at $25B+ dealing with EMS providers that build to my print. I provide all IP to them. The EMS firms offer me IP risk indemnification that I am satisfied with. However, several EMS and ODM are also asking for me to indemnify them in the case that a third party sues them for an infringement on the IP that I provided. Would it be common for an OEM to agree to indemnify a BTP EMS? What are industry contractual best practices in this?”

“I am analyzing an EMS response to out RFP/RFQ. Their quotation quotes a flat percentage for SMT assembly cost and material overhead (regardless of volume). Is this reasonable? How does it compare to EMS industry best practices?”

“I am looking for a medium sized $1 billion plus CM in Brazil to produce large volume development boards, can you recommend two with high technical expertise?”

“I read through several articles here and am looking for additional information on benchmarking data re: EMS transformation costs. We received your report and want to follow up with a project cost analysis.”

Contract manufacturing consulting

Good reasons why top consulting firms come to Venture Outsource: Understanding EMS manufacturer services and technical capabilities per provider, EMS factory, geographic region, and global EMS industry; development and review of contract manufacturing request-for-quote (RFQ) procedures, templates and documentation, development of OEM product cost models for outsourcing manufacturing, understanding EMS manufacturing supplier quotes and comparing EMS manufacturing quotes for complex services, development and review and negotiations of contract manufacturing supplier agreements, identifying and selection of contract manufacturing EMS provider partners, formulation of key performance indicators (KPIs) for ongoing management of EMS manufacturing supply chains, and more. Contact us.




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