EMS manufacturing metric: Materials work-in-progress (WIP) percent raw materials

Value-add included for WIP at each stage of operations. Reported on various levels: corporate, customer, program family, board level.

By Mark Zetter

Materials cost of goods sold (MCOGs) is the EMS PCB assembly manufacturer’s largest cost, second only to indirect labor, which is typically hidden among the EMS provider’s S,G&A.

EMS providers want to use the inventory turns metric to show their materials management prowess in managing MCOGs. But inventory turns are easily, and often, manipulated and do little to convey how EMS providers are at managing raw materials once inside, across operations.

Depending on the quarter, if you look at Jabil’s or Flex’s inventory, analysts must be scratching their heads asking themselves why is inventory so poorly managed in an industry that says MCOGs is so important? (SEE: How to drive cost out of your manufacturing product portfolio)

Artificial intelligence exceeds EMS manufacturing expectations
How corporate materials commodities strategy differentiates manufacturers
Slide Deck: EMS/ODM Contract Agreements Development & Negotiations [PDF]

I believe EMS CEOs have been managing EMS business wrong all of these years because industry did not know any better and didn’t have the right tools. EMS industry is not known for innovative, outside-the-box thinking.

USD WIP (% raw materials)

Foxconn, Flex, Jabil, Celestica and others talk inventory turns all day. But it would be more insightful for prospective customers, current customers, and investors if EMS firms breakout the dollar value for materials work-in-process, or work in progress (WIP) across corporate, or the operation, as: USD WIP (% raw materials).

ACCESS ARTICLE: Full content is available to logged in electronics OEM site users only. Registration is free. If you are an electronics OEM professional working in an electronics OEM company please Register or Log In.

Private message OEM peers. Access all content.

For electronic OEM professionals working in OEM companies. Connect with OEM peers and access exclusive content.

You might also like:

OEM Checklist for EMS Manufacturing Quotes

Provider spotlight

About is the leading online destination helping electronics OEM decision makers make more informed decisions and reduce risk. We offer educational Webinars, thousands of original articles and helpful tools, a community of influencers who understand the challenges facing your company today, and a comprehensive directory of electronics provider services.

Copyright Venture Outsource, LLC. All Rights Reserved
The material on this site is for informational purposes only and is not a substitute for legal, financial or professional advice. Distribution and use of this material are governed by our User Terms Agreement and by copyright law. By using our Website you agree to site Terms and Privacy policies. For questions please contact at 1-888-860-1193 or visit