TFI Releases Guide to Calculate Cost of Ownsership When Outsourcing
Technology Forecasters Inc. (TFI, Alameda, CA) has release version 9.0 of the Global Pricing Workshop, which gives reliable prices for electronics manufacturing and design services in nearly 20 countries. Subtitles, "A Guide to the Global Outsourcing Landscape," the updated workshop and accompanying workbook draw on detailed pricing data elicited on a confidential basis from dozens of large, mid-size and small contract manufacturers (CMs), as well as original design manufacturers (ODMs).
TFI senior consultant Charlie Barnhart--who served as a n executive at CMs for more than 20 years, most recently at Sanmina-SCI--managed the research team and scrutinized more than 60 case studies covering all industries and regions.
"Electronic companies that outsource some or all of their products' manufacturing need to focus on total cost of ownership and compare these numbers with estimates that are based on sound financial principles," said Barnhart. "Actual costs versus those presented in contract manufacturer's quotes would surprise most customers."
Barnhart warns, for example, that in the largest cost category--materials--considerable variation among electronic manufacturers exists as to how they account for charges for items such as incoming freight, planned attrition, packaging and other expendable supplies, which can add as much as several percentage points to the overall cost of goods.
"Complicating the matter further, other materials-related costs such as supply-chain management and cost of procurement are sometimes accrued in SG&A, then allocated back into the operational overhead, thus making it very difficult to determine and understand the actual cost of labor," said Barnhart.
The new version of the workshop introduces more categories of design and manufacturing services, explains cost-model differences between CMs and ODMs and compares total pricing data for additional countries including India, Vietnam and Russia. Workshop participants also learn how relatively constant capital costs, hidden regional costs and levels of risk sway total cost of ownership in surprising direction--given the nature of the product and market.
Normally, the workshop is customized for individual electronic-product companies and CMs and held at each company's facility. On June 9, a special presentation of the workshop will be given to members of TFI's Quarterly Forum for Electronics Manufacturers Outsourcing and Supply Chain. The workshop will be held in Red Bank, NJ--the day following the Quarterly Forum hosted in nearby Holmdel by Lucent Technologies.
To schedule the workshop at your facility, or to attend the June 9 workshop, contact TFI president Pamela Gordon: (510) 601-9107; email: pgordon@techforecasters.com.
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