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How much should I pay for contract electronic EMS manufacturing services?

We analyzed 3,000+ EMS manufacturing quotes - including highly complex systems builds - for OEM programs across multiple EMS factories and geographies.

By Mark Zetter

There is no denying that costing electronic manufacturing services is difficult, whether OEMs are presented with pricing determined by incorrect RFQ process or materials, quotes prepared by an EMS provider can be daunting trying to identify and separate real value, from fluff. You can argue its complexity simply by knowing how EMS quotes are created.

Some quotes are created via internal EMS, home-grown quote systems or, EMS quote pricing is determined by quoting systems sold to EMS manufacturers by software vendors who, themselves, do not have the complexity built in.

After working over 20 years with complex electronics programs we can help you cut your EMS program cost pricing to get your OEM program as close to actual EMS manufacturing internal costs, as possible.

The EMS quote process is complicated, multi-stage, micro- and macro-minded. The knowledge needed to ‘argue’ or ‘negotiate’ is vast and takes decades to acquire.

Venture Outsource developed a technique building manufacturing cost and spend modelers that can save electronic OEMs millions, even billions, of dollars on EMS outsourcing NPD programs, and EMS programs already running.

It is safe to say our cost cutting tools help OEM clients broaden, almost demystify, the understanding of EMS manufacturing. Our tools help educate OEMs, arming you with EMS industry deep understanding needed to proactively drive lowest costs and save millions, even billions, of dollars.

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Clients using our tools get more than a working manufacturing spend model. We become a support team member with each OEM client engagement, providing EMS business savvy, industry technical competence and actionable feedback -. transforming a novice or seasoned buyer of EMS services into an expert in EMS business modeling, allowing them to use the systems we create on their own.

There is much, much more information about EMS internal quoting practices OEM purchasing mangers can arm themselves with for leverage, and determining optimal, lowest pricing with their EMS manufacturing partners.

OEM clients using our models are able to enter an RFQ phase, often armed with more information than the EMS manufacturer itself.

You become successful identifying EMS internal cost drivers hidden in your EMS programs and cutting EMS program costs to the nth degree. On average, our models can save you between 5% and 15% of your total EMS program spend on new programs, and existing EMS programs.

There are multiple functions and parties involved in the EMS quote phase on the EMS supplier side: EMS marketing and sales staff, manufacturing reps, manufacturing quote software vendors, and ERP and CRM vendors.

There is an ever-present claim by EMS firms the EMS manufacturer’s quote is competitive – the lowest they can go and, operating under the color that if they go any lower the EMS provider can’t make a profit.

This is not true – and we can show you.

Curated instruction

OEM buyers tasked with managing EMS solutions spend and comparing EMS responses to quotes for EMS services only see ‘price quoted’ to OEM companies – what the EMS provider wants the OEM to see. We help you see the ‘actual cost’ EMS provider incurs to run your program(s).

In every client engagement OEMs gain a much, much deeper understanding of how to cost EMS services – without having to draw from department budgets that might be allocated for training and education.

Our objective is to help you make more informed decisions. More OEMs need to challenge EMS manufacturing quoted fees and pricing and now they can and, on a level where OEM purchasing managers know more about the EMS manufacturer’s business than EMS executives with years of industry experience.

We can tell you, and show you, how much your outsourcing program costs the EMS manufacturer (the EMS provider’s internal costs) to service your program and produce your product. More importantly, we also can tell you, and show you in a justified manner, how much room you have to cut costs during EMS negotiations and – where you can cut.

We analyzed 3,000+ EMS manufacturing sales quotes for OEM programs ranging from NPI to large-scale manufacturing and this includes highly complex systems builds across multiple factories and geographies. Clients using our models are able to enter an RFQ phase, armed with more information than the EMS manufacturer itself. You can be successful driving down costs in your EMS programs to the nth degree.

On average, our models can save you on new programs, and existing programs, anywhere between 5% and 15% of your total program cost.

If you are interested, read more here or please contact Mark Zetter at 888-860-1193 or email insight@ventureoutsource.com




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