Barbara, I don’t think there is any need for pricing secrecy in this competitive market. Nobody is doing any charity works, so obliviously they may add a margin based on the expenses incurred for procurement, distribution and investment. I mean there should be some transparency in pricing and if any bulk order discounts are applicable, it has to be transfer to the customers. Ultimately without customers, there is no business.
At any point of time I don't think any of the vendors or EMS is bothered about pricing factors because at the end all such burdens are transferring to the customer side. If we are buying a device or equipment, how the EMS can justify or quantify with its price tag. In most cases I personally feel that they are fixing the price tag more than double of the actual costs. In that major sharing is accounting for vendor/Ems profit and other expenses.
I've heard of situations where EMS companies were able to get a preferred price on components and didn't pass the savings on to their customers. So I do think it works both way. But to Gerry's point: who does the help or hurt? I'm still thinking on that one...
I'm not really sure how many EMS companies want to know all the confidential price information between suppliers and OEM's. When it comes to few bigger, special or costlier components it is always a case of special pricing will come in and you can not really stop this scenario. This happens with all kinds of markets and products. But anyways EMS should make sure they are doing the business right with enough margins for long term sustainability.
In my opinion, as long as the EMS company is open about its profit margin , they do not have to mask their purchase pricing. In fact by being open the buyer may in some cases help the EMS company to get a better deal from a component supplier by using their contacts if the relationship between the EMS company and the buyer is transparent. This has been my experience while working with an EMS company in India.
@Barbara: I wonder if there are any legal complications involved when it comes to disclosing your purchase price to your customers. It's different to have an idea about the price or the rough estimate of it versus knowing the exact price and details.
I think the price at which companies purchase is something very confidential and I don't think a lot of companies are in a position to make it public. Apart from it, there are other factors such as discounts, incentives etc that may not give you an exact idea about the price.
Price masking is essential and integral part of business. The only way to trust it is genuine price is to show your purchase invoice to your customer. This way, they have total confidence in you and will give you repeat business. But you can show your purchase invoice to one and all.
For those of you who aren't familiar with the EMS term, as I wasn't at first, here is some info from Wikipedia: Electronic manufacturing services (EMS) is a term used for companies that design, test, manufacture, distribute, and provide return/repair services for electronic components and assemblies for original equipment manufacturers (OEMs). The concept is also referred to as electronic contract manufacturing (ECM).
I wonder just how secret these prices really are. Companies always claim they don't disclose certain things to maintain their competitive advange, but in reality, everyone knows everybody else's business anyway. With tools such as freebenchmarking.com, prices are becoming more visible anyway. It seems to me that forward-thinking OEMs would start to share prices voluntarily, rather than be dragged into it.
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.
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.
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.