Internal vs external manufacturing cost feasibility analysis in electronics outsourcing

By Staff

The diagram below shows how electronics OEM executives reduce costs and save money by outsourcing to contract electronics solutions providers vs. keeping manufacturing and related activities in-house (outlined in red). Each of the seven columns (headers outlined in blue) represent increasingly embracing a vertically-integrated outsourcing model to further reduce OEM materials cost.



(For column seven in the diagram above, read more about purchasing economies of scale here.) And you can see other internal OEM costs are also reduced as the outsourcing OEM program moves internal the contract solutions provider: columns one through seven, above. Read more detailed writing on costs reductions for OEMs working with vertically-integrated electronics services providers here. You also can learn more about the contract electronics quote process and strategy during the OEM RFQ process here.

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