How to use contract manufacturing RFQ cost templates

By Staff

How to use contract manufacturing RFQ cost templates: Used for ‘should cost’ analysis when outsourcing manufacturing with your contract manufacturer, some customers prefer to keep templates for internal use, only.

The reason being, the OEM wants the EMS / ODM partner to respond to your request-for-information (RFI) or request-for-proposal (RFP) or request-for-quote (RFQ) documents or checklist(s) with as much information from the EMS / ODM supplier, as possible, knowing the EMS / ODM provider will often aggregate (hide) internal (actual) costs and pad pricing presented to you. Often times this padding/hiding* their true costs is intentional because the the EMS / ODM provider is not capable of identifying/tracking real costs, especially for indirect labor. (This is also why many EMS / ODM quotes ar e cost + materials).

How to drive costs out of your EMS manufacturing program

Meanwhile, you will prefer contract electronics solutions providers (EMS / ODM) to do this because, you can then use their responses to your RFP/RFT/RFQ to help you identify key areas in their pricing/quotes where they are unable to justify ‘cost’ (your pricing) and, you can use your manufacturing template to root out EMS / ODM inefficiencies and drive further profit opportunities for your outsourcing program the EMS / ODM firm is quoting for you.

Manufacturing cost templates that take into consideration EMS and ODM pricing drivers can then be used to help you clarify and break out quoted pricing into justified ‘should costs’ and help you to begin contract negotiations on even footing with EMS / ODM providers you are considering.

Contract manufacturing cost templates, when properly used, can help you dig deeper into EMS and ODM ‘quote prices’ forcing providers, through informed reasoning, to reveal how they can justify their quote pricing and, doing this will help you better to determine ‘should cost’ pricing.

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