Douglas--thanks! And Charlie has been around awhile, he used to work at a major EMS. I believe he is doing a cost analysis of engaging and disengaging as well. I'm looking forward to the analysis.
Thank you for the notice of Charlie Barnhart's contribution. He must have been around the block a few times. It is imperitive to consider the amount of work bringing up a new CM and when you add to that the learning curve for an entire PLM system, a company has years of investment in education and training to look forward to. I appreciate your experience and contributions immensely.
It is really difficult for an OEM to disengage with an EMS once they've been together awhile. The information came from Charlie Barnhart, who said it could take up to 18 months to transfer business to one EMS from another. And this is an apples-to-apples comparison. If you need to make ECOs or create a new AVL, it may take even longer.
Prabhakar,
Yes, it you are referring to working conditions as a criteria for establishing a business relationship. This makes me think of Bolaji's earlier article about more product introductions being made overseas first. Let's just hope that other countries pick up the ethical mandate of prequalification based upon working environment and human rights. The EU REACH requirement automatically demands a higher level of attention to human health and safety, but until working conditions become a high priority qualifier for doing business, big CMs are going to save or make as much money as they can. Unfortunately, the most flexible and manipulative place to cut cost is still the working wage and working conditions of the employees.
Clairvoyant,
Good point about the CM survey. I can see where this article would tie in with the previous one about Supplier Quality Audit checklist. I think all of these disciplines are known by most Manufacturing people, but it takes time and deliberate focus to make sure all of the company's key people and impacted representatives are actively involved. The follow up is also key to setting a continuing expectation with the CM.
Yes, great article, Douglas. It is very informational with everything that should be talked about in meetings. Something else I would like to mention is the OEM's Quality Assurance representative should be involved in visiting the CM's facilities to ensure they have the right equipment and follow the proper standards when manufacturing.
A really good article that could explain the all the details to a novice going for a negotiation with a cm. hope to see more details in future articles.....
The list almost looks like a blue-book to go by for OEM-Contractor negotiation.
With reference to the Apple-Foxconn issue where some other issues became the point of public discussion , is it advisable to include those issues in the contractual negiations and make them part of the contract?
Thank you for the compliment. I want to give this practical advice because there is so much to gain from anticipating as many issues as possible and so much to lose by rushing into agreements with so many unknowns. I believe some responder to an earlier blog commented that it is no light task setting up with a CM and that to find and hone a good OEM/CM relationship could take up to a year. I believe this was in reference to Apple moving from Foxconn to another CM.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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