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TFI Releases New Approach to Calculating Total Cost of Ownership when Outsourcing Electronics Manufacturing
May 5, 2004 |Estimated reading time: 2 minutes
Alameda, Calif. — Technology Forecasters Inc. (TFI) has released Version 9.0 of the Global Pricing Workshop, which gives reliable prices for electronics manufacturing and design services in nearly 20 countries.
Subtitled "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 the world's largest, mid-sized and smaller contract manufacturers, as well as original design manufacturers. TFI Senior Consultant Charlie Barnhart, who served as an executive at contract manufacturers for more than 20 years, most recently at Sanmina-SCI, managed the industry-expert research team and scrutinized more than 60 case studies covering all industries and all regions.
In the largest cost category, materials, there is considerable variation among electronic manufacturers as to how they account for charges for items such as incoming freight, planned attrition, packaging and certain other expendable supplies, which can add as much as several percentage points to the overall cost of goods. Complicating the matter further, "ther 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, making it difficult to determine and understand the actual cost of labor.
Compared with previous versions of the Global Pricing Workshop, Version 9.0 introduces more categories of design and manufacturing services, explains cost-model differences between contract manufacturers and original design manufacturers, 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 of cost of ownership in surprising directions, given the nature of the product and market.
Normally, the daylong Global Pricing Workshop is customized for individual electronic product companies and contract manufacturers, and held at each company's facility. On June 9, 2004, a special presentation of the Global Pricing Workshop will be given to members of TFI's Quarterly Forum for Electronics Manufacturers Outsourcing and Supply Chain. The Version 9.0 Workshop will be held in Red Bank, N. J., the day following the Quarterly Forum hosted nearby by Lucent Technologies in Holmdel.
The Quarterly Forum is a membership organization that assesses issues affecting the electronics manufacturing industry and discusses them in quarterly meetings and web-resident strategy reports. This community of electronics industry executives comprises 75 member companies including name-brand product companies, contract manufacturers, and suppliers of components, software and equipment.
TFI is a strategic consulting firm helping electronic product executives to improve supply-chain, outsourcing and environmental strategies for cost benefits. For more information, visit www.techforecasters.com.