June 23, 2020:
When an EMS firm puts my company on its PCB AVL, it typically only asks for pricing on new projects. When I ask about existing work, the response is usually “we don’t move boards once they are placed.” Or “we don’t have time to re-bid those.”
Or they tell me it takes too much effort to move to another vendor.
That’s a shame. In fact, it’s business malpractice.
If EMS firms focus only on winning new business, they are putting their existing business at risk.
The thing is that many OEMs are asking me to suggest new homes for their assembly work. The challenging economy is forcing these companies to take a harder look at their assembly costs to remain competitive and maintain profit margins.
I often offer to “quote for fun” on existing work to demonstrate how much firms have been overpaying for their PCBs, especially on jobs that have been with the same vendor for a long time.
The PCB is usually 8-12% of the BOM and, in many cases, I have saved the customer upwards of 5% of the total cost for a particular project. That can add up to significant savings.
And that savings can either add to your bottom line, or be passed on to your OEM customer to make it less tempting to move business.
Unfortunately, I don’t see many EMS companies being proactive to protect their existing assembly business from jumping to a competitor.
Don’t get complacent with your EMS business. You may regret it. Stay on top of your present PCB pricing.
I can help you not only attract new business, but also hold on to what you have. Reach out to me at email@example.com.