Cost Modeling Electronic Contract Manufacturer Program Quote Pricing of Fees and Services

In this post I outline pricing inputs used in EMS manufacturing industry when EMS companies quote price OEM customer programs during the request-for-quote (RFQ) engagement phase. Information is based on years of working in, setting up, and managing EMS factories, divisions, companies and is supported by experience with various client projects. I begin with EMS factory location-dependent variables, freight and inventory buckets, labor, EMS factory S,G&A, scrap and reserves and then go into detailed product pricing inputs, program working parameters, SMT and box build, program profits, ROIC formula for EMS programs, and more.

EMS manufacturing program cost drivers can vary per EMS location while some cost drivers like material costs can apply to every EMS factory geography or location. For location dependent variables, an understanding of how the input might be used by EMS providers helps OEMs assess factors going into the input. For example, EMS direct labor: What is direct labor and what secondary costs should be included in the EMS provider’s direct labor rate per hour?

You can also use this online calculator I created for your make vs. buy decisions and read more about my costing modelers here.