The outsourcing of electronics manufacturing has become a common business solution for many OEMs. Unfortunately, conducting an accurate True Cost of Outsourcing (TCO) analysis is less common. OEMs and EMS alike need to be able to do so in order to determine when the use of outsourcing to specific geographies is the best viable business solution.
As the outsourcing of electronics manufacturing by OEMs has grown into a global industry over the last few decades, it has become increasingly important that OEMs analyze the total cost of their outsourcing initiatives and not focus just on the price paid to their EMS and ODM suppliers. A proper TCO analysis involves consideration of costs both inside and outside of the OEM. This paper will present the variables that are involved in such and analysis.
