How to drive cost out of your manufacturing product portfolio

Better cash conversion with our manufacturing spend cost modelers helps OEMs save between 5% and 15% of total EMS program costs


Electronics manufacturing supply chains are being challenged further by the corona virus pandemic. OEM product manufacturers have high pressure to drive cost out from current product portfolios.

Many manufacturers are rolling back two to three years, any progress they previously achieved, toward Industry 4.0 because risks they took to move forward with these programs has been thrown out the window.

Promises of lean manufacturing are leaving OEM equipment manufacturers (and their EMS manufacturing partners) with massive write-downs. Spend management is paramount to protect your business and your cash as you select your strategic projects.

Save between 5% to 15% of
your EMS sourcing costs
for existing programs and
new programs.

 

We work with OEM manufacturers to drive savings (lower spend) when they source EMS manufacturing services.

Every customized manufacturing spend modeler is accompanied with training (remote or on-site). We walk you through how to use your manufacturing spend modeler to justify cost reductions, and show you your ROI, in detail.

As an example, one client effectively used their model we created to identify an estimated 6% savings potential in an existing EMS program while creating a clear trajectory to establish and re-negotiate reasonable savings potential of $9.4 million for the next 500,000 units built. In other words, for every 500,000 units built the client uncovered estimate savings of $9.4 million.

Another client achieved manufacturing supply chain savings, directly attributable to their cost model we created, and totaling more than $40 million in spend reduction and within 24 months of project completion.

Essentially, our cost models simulate the EMS manufacturer’s business and can compute the costs surrounding the manufacturing of your programs.

Here is what we will need to build your custom manufacturing spend model:

  1. Costed BOM
  2. Process checklist

So if you are interested in working with us to create a contract manufacturing spend model for you, project deliverables will include the following:

  1. We determine your EMS manufacturer’s true internal costs for your program
  2. We identify your EMS manufacturer’s inefficiencies for your program
  3. We show you where your EMS manufacturer hides profits, double-dips, triple-dips with excessive fees and markups
  4. We show you what your unit total landed best strike price (cost) should be
  5. We teach you how to leverage outputs from your manufacturing spend model so you know where, and how, to drive down your product unit cost to get closer to actual EMS manufacturer internal costs
  6. We show you where to focus in your quote, and how, to position your company during contract negotiations (or re-negotiations) to so you can justify these cost reductions with your EMS manufacturer and reduce your manufacturing spend
  7. We show you how, and when, you will achieve ROI using your contract manufacturing spend model
  8. We show you how to edit and use your model to drive down costs with future programs

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, please fill in the form on this page or contact Mark Zetter at 888-860-1193 or email insight@ventureoutsource.com