Menu


Top ten (10) factors impacting EMS/ODM quote pricing for OEM electronic equipment outsource manufacturing programs

In nearly every instance of the OEM program engagement, the EMS/ODM supplier wants to maintain a minimum, visible posture related to pricing, and negotiations, presented to OEM prospects (and existing OEM customers) — all based on EMS/ODM markups (profit).

By Mark Zetter

The following pertains primarily to tier-1 and tier-2 EMS and ODM factories across several manufacturing regions with multiple manufacturing factories and economic (currency) regions, globally, and includes aspects of the OEM customer and EMS/ODM supplier relationship. (READ: How to drive cost out of your manufacturing product portfolio)

1. Local factory cost basis and SMT/PCB assembly line phases and workstations.

2. Workstations for each factory has contributory labor costs, including direct labor, indirect labor, F(Factory)G&A, S,G&A and commissions.

SEE ALSO
OEM contact manufacturing cost model templates for sourcing EMS/ODM services
OEM Checklist during RFQ phase for EMS/ODM manufacturing
Contract agreement development and negotiations (PDF auto-download)

3. Regional and local labor is further broken down into definable variables, local benefits and costs.

4. Local factories are influenced by currency and forex variables.

5. Fees for pipelining materials and components, sub-contracting, consumables, freight-in, storage, production, logistics.

6. Costly indirect labor and related engineering, logistics, production, program management, quality/TQM, facility, reverse accruals for G&A, and more.

7. FG&A: This includes factory general administrative costs like freight out, supplies, utilities, energy, P,P&E, insurance and more.

8. SG&A: This includes sales general Administrative costs, to include staffing and activities OH for sales, business development, account executives, business unit managers (does not include costs for manufacturing reps).

OEM customer & EMS/ODM supplier business model and relationship

9. Metrics can be applied by OEM customers to isolate and identify how and where EMS/ODM factories ‘charge back’ all aspects of program labor, materials and related costs, facility time use, space use, cost or ‘value’ for quality services provided.

Search EMS manufacturing listings
Go

In your search results, you can add more Industry End Markets, more Services plus, you can add more Geographies.

10. In nearly every instance of the OEM program engagement, the EMS/ODM supplier wants to maintain a minimum, visible posture related to pricing, and negotiations, presented to OEM prospects (and existing OEM customers) — all based on EMS/ODM markups (profit). Popular EMS industry quoting platforms and software won’t be inclusive of items 1 through 10 above because they are always designed and administered with best interests of the vendor/supplier in mind, not OEM customers.

Our contract manufacturing cost templates are designed with OEM decision maker best interests in mind so that you can manage the narrative and discuss pricing and conduct negotiations with EMS and ODM suppliers on equal footing.

In fact, users of our manufacturing cost models often have more insight into EMS and ODM factory cost and quote (price) drivers than most EMS and ODM executives do today.

Request custom manufacturing EMS/ODM templates to help OEM professionals identify EMS/ODM profit areas and, help OEM decision makers sourcing EMS/ODM services to drive more informed contract negotiations and lower fees (pricing). Purchase below or, read more here.

Handbook of EMS/ODM manufacturing factory multi-national pricing and cost drivers

Purchase our detailed, contract manufacturing handbook for EMS/ODM internal costs and pricing drivers that impact OEM quotes (fees), below. Alternatively, read more about our handbook, here.

PDF document purchases and delivery

Your PDF will be emailed to you following transaction confirmation. We use Stripe for compliance of all Payment Card Industry Data Security Standards (PCI DSS). There is no sensitive cardholder data stored on or routed through our servers. For clarification, our Documents are digital and will be emailed to you. Also, given the digital nature of these files, there are no refunds offered. Please consider this before you purchase.

US$ 1899.00
Available to OEMs and vendors and suppliers. Please read our Disclaimer before purchasing.

We hope you find this content helpful in your information gathering process and it aides you in making more informed decisions.

View more documents here.

We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies. Your access to the website is subject to our Terms.




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

https://www.ventureoutsource.com/contract-manufacturing/top-ten-10-factors-impacting-ems-odm-quote-pricing-for-oem-electronic-equipment-outsource-manufacturing-programs/

Provider spotlight

About VentureOutsource.com

VentureOutsource.com 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 VentureOutsource.com at 1-888-860-1193 or visit www.ventureoutsource.com