Electronics Assembly Knowledge, Vision & Wisdom
The True Cost of Global Electronics Outsourcing
The True Cost of Global Electronics Outsourcing
The outsourcing of electronics manufacturing has become a common business solution. The authors of this paper reveals how to calculate the true cost of global electronics outsourcing.
Supply Chain

Authored By:
Eric H. Miscoll, Ph.D.
Charlie Barnhart & Associates LLC, Southlake, TX, USA
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Transcript
The outsourcing of electronics manufacturing has become a common business solution for many OEMs. Unfortunately, conducting an accurate, true cost of outsourcing analysis is less common.

OEMs and EMS alike need to be able to do so in order to determine when the use of outsourcing to specific geographies is the best viable business solution. The true cost of electronics outsourcing for an OEM includes three elements.

First, the price paid to the EMS. Second, the costs accrued by the OEM internally in support of the outsourcing.  Third, the cost of geographic risk depending on where in the world the manufacturing facility is located and the destination of the end product.

The authors of this paper reveals how to calculate the true cost of global electronics outsourcing.
Summary
The outsourcing of electronics manufacturing has become a common business solution for many OEMs. Unfortunately, conducting an accurate True Cost of Outsourcing analysis is less common. OEMs and EMS alike need to be able to do so in order to determine when the use of outsourcing to specific geographies is the best viable business solution.

The true cost of electronics outsourcing for an OEM includes these three elements:
1) The price paid to the EMS;
2) The costs accrued by the OEM internally in support of the outsourcing; and
3) The cost of geographic risk depending on where in the world the manufacturing facility is located and the destination of the end product.
Initially Published in the SMTA Proceedings
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