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OEMs look to cut number of contract manufacturers
11/7/2012 12:05 PM EST
Major issue in China
According to IHS, survey respondents represented a wide swath of electronics, spanning industries including communications, computing, consumer electronics, automotive/transportation and industrial. The survey covered an array of topics related to outsourced manufacturing, ranging from major issues like expectations for contract manufacturing activity, to detailed subjects like payment terms, inventory terms and sourcing discretion, according to IHS.
Most OEMs that responded said they believe that outsourced manufacturers can help reduce costs. But the vast majority of respondents said they have no visibility into the cost structure of their EMS, ODM and JDM partners, IHS said.
Overall, the two most commonly cited changes that OEMs say they want to make with their outsourced manufacturing services providers during the next six months are lead-time reduction and price negotiation, IHS said.
The survey also identified another major issue in China, IHS said. Despite all the labor issues that have come to light in the country, almost half of OEMs there still don't require third-party audits of their outsourced manufacturing providers in order to ensure compliance with local labor laws, IHS said.
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According to IHS, survey respondents represented a wide swath of electronics, spanning industries including communications, computing, consumer electronics, automotive/transportation and industrial. The survey covered an array of topics related to outsourced manufacturing, ranging from major issues like expectations for contract manufacturing activity, to detailed subjects like payment terms, inventory terms and sourcing discretion, according to IHS.
Most OEMs that responded said they believe that outsourced manufacturers can help reduce costs. But the vast majority of respondents said they have no visibility into the cost structure of their EMS, ODM and JDM partners, IHS said.
Overall, the two most commonly cited changes that OEMs say they want to make with their outsourced manufacturing services providers during the next six months are lead-time reduction and price negotiation, IHS said.
The survey also identified another major issue in China, IHS said. Despite all the labor issues that have come to light in the country, almost half of OEMs there still don't require third-party audits of their outsourced manufacturing providers in order to ensure compliance with local labor laws, IHS said.
Related stories:
- Contract manufacturers must evolve with electronics design
- Contract manufacturing, set for 8.5% growth
- Asian contract manufacturers eye design services
- Contract manufacturers shift to Mexico
- Apple, Amazon squeeze costs out of latest tablets
- Foxconn admits hiring underage workers
- Tablet craze a boon to contract manufacturers
- IHS: Foxconn report a 'moment of reckoning' for electronics
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