Charlie Barnhart & Associates LLC (CBA), a leading provider of hard data about the cost drivers and risks of global electronics manufacturing, has launched a nine-part series of articles for midmarket OEMs to discuss current global conditions and the challenges they have created. CBA forecasts a particularly challenging business environment for the EMS industry going into the next few quarters.
When mid-market OEMs decide what their options are, i.e. whether to outsource offshore, near-shore, or a combination of these, their quote activity is influenced by global capacity and supply chain issues dominated by trends among the ‘Goliath Fringe’. The Goliath Fringe of the outsourcing industry includes the two largest contract manufacturers, Foxconn and Flextronics, the top five ODMs, and their global mega-OEM customers. These companies collectively are the heavy-hitters of the market segment known as the “3Cs” (communications, computer and consumer).
This is why CBA compiles data to enable a complete analysis of fully burdened labor rates, the cost of global risk, as well as an OEM’s own internal costs to manage their outsourcing initiative. This enables OEMs to match the scale and approach of their unique current manufacturing status quo to the capabilities of their EMS provider, and look beyond today’s one-dimensional, “one-size fits no one” value-proposition to find real competitive advantage in the EMS sourcing
Notwithstanding, current global conditions have created a particularly challenging business environment for the EMS industry going into the next few quarters. Charlie Barnhart & Associates’ Outsourcing Navigator Council membership needs to act now to address the nine areas of risks to be discussed in the new nine-part series of articles. Beginning in September, CBA will offer its recommendations for addressing each of these issues in a series of blogs.
Charlie Barnhart & Associates, LLC focuses on the intersection between the electronics OEM and its electronics manufacturing services provider. The company collects detailed case study data on the costs of these services. Charlie Barnhart & Associates then presents the data to the industry through workshops and webinars.