Comments on: Next wave of cost reductions must be an inside job for OEMs http://www.techforecasters.com/weblog/archives/next-wave-of-cost-reductions-must-be-an-inside-job-for-oems/ Read what our thought leaders are thinking, in our every-other-Friday TFI blog entries. Sign up with your favorite RSS Feed service and get an automated alert whenever there's a new posting to the TFI Weblog. Wed, 10 Mar 2010 04:05:22 -0600 http://wordpress.org/?v=2.8 hourly 1 By: john zurborg http://www.techforecasters.com/weblog/archives/next-wave-of-cost-reductions-must-be-an-inside-job-for-oems/comment-page-1/#comment-520 john zurborg Fri, 30 Mar 2007 18:52:33 +0000 http://www.techforecasters.com/weblog/archives/next-wave-of-cost-reductions-must-be-an-inside-job-for-oems/#comment-520 As an EMS company SMC has long held the position that the best way to cut cost is by working with the OEM to design out labor and material cost were possible. OEM's in the past 4 years had downsized their engineering groups and do not have the staff to accomplish this,so the easiest thing to do was to continue to search for lower cost manufacturing alternatives. SMC does have some OEM's that have realized this and we have successfully kept work from moving to China or other low cost centers by working together. OEM's need to reinvest in product designs to drive more cost out. This is on the product cost side of the equation. Looking internally also includes looking into your internal manufacturing and operations. Are your operations seeking continuous improvement? Driving efficiencies and keeping overhead low. The combination of the two above will make any OEM successful. The hard part is the the top management at OEM's have to drive this message into their organizations and have to support it with the proper staff. People are not just cost, they are the creators for cost savings when given the opportunity to put focus in this area. As an EMS company SMC has long held the position that the best way to cut cost is by working with the OEM to design out labor and material cost were possible. OEM’s in the past 4 years had downsized their engineering groups and do not have the staff to accomplish this,so the easiest thing to do was to continue to search for lower cost manufacturing alternatives. SMC does have some OEM’s that have realized this and we have successfully kept work from moving to China or other low cost centers by working together. OEM’s need to reinvest in product designs to drive more cost out. This is on the product cost side of the equation.

Looking internally also includes looking into your internal manufacturing and operations. Are your operations seeking continuous improvement? Driving efficiencies and keeping overhead low.

The combination of the two above will make any OEM successful. The hard part is the the top management at OEM’s have to drive this message into their organizations and have to support it with the proper staff. People are not just cost, they are the creators for cost savings when given the opportunity to put focus in this area.

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