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An EMS company's core business is manufacture; they do this extremely well. Concentrating on volume manufacture for many clients gives them economies of scale and buying power to drive down costs. By outsourcing manufacture, OEMs can leverage these advantages, whilst freeing up internal resources and capital enabling them to focus on the core areas of their business where they add most value.
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Benefits for the OEM include:
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Reduced COGS, labour cost and overheads - Greater profit.
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Lower capital investment and greater ROI
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Improve cash flow and reduce inventory
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World Class facilities - EMS invest in latest technology
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Higher quality - The top priority for EMS success
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Schedule flexibility - Reduced Risks
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Geographical advantages
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Fixed costs become variable
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OEM concentrates on core competencies - improve company focus
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However, for maximum benefit a well conceived outsourcing strategy and plan is necessary. Poorly designed programs give rise to problems: late deliveries; high customer returns; rising costs. Investment in tooling and training with an EMS partner may be difficult to transfer to another facility, making the choice of EMS a critical issue - mistakes could cost millions to correct. Pattotek's experience helps clients avoid issues and implement mitigation strategies to reduce risks from:
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Poorly constructed programs
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Inadequate preparation
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Selecting wrong EMS
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Inefficient management of EMS
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Late or inadequate delivery
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Logistics
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Loss of control
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Communication problems with EMS in different locations and time zones
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At the outset of a project, as well as understanding your specific outsource requirement Pattotek's consultants will endeavour to fully understand your business, its objectives, people, culture, overall strategy and how outsourcing will fit in. We build on this foundation to develop an outsourcing plan which delivers the benefits that are most important to you.
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