Factors that affect the cost of pcba OEM service?

The pcba OEM service is a type of PCBA processing and a very common method for SMT processing plants. When it comes to controlling costs, purchasing often feels like bargaining, and suppliers feel they have to be bargained! Both sides are nervous.

The original intention of management cost: via using the technical means of managing costs so that reducing waste,costs, and improving the company's competitive position in PCBA processing market. The so-called management cost is to reduce the cost of various wastes, reduce the cost without value added, a transaction that damages the interests of one party and cannot be long-lasting.

The cost structure of a product, most of the product planning stage and design stage have been determined. As the product is difficult to find the price reduction space after the product is put on the market, the pcba OEM purchaser needs to actively participate in the product cost’s factor management before the product goes on the market.

In this article, let's talk about the factors that affect the cost of pcba OEM service:

1. The universality of PCBA processing materials

The versatility of materials includes two types:

First, the material has a common standard in the industry.

Second, the material does not have a common standard in the materials industry and needs to be customized. In this case, how to improve the universality of the material.

In the product planning and design phase, product planners and researchers pay more attention to areas that they are good at, such as how to better implement the product's functionality, less consideration of supply chain requirements, and may unintentionally use non-industry standard parts. Non-industry standard parts means that there are fewer suppliers or even only one supplier. The market supply is insufficient, and the materials are usually not in a completely competitive market environment. The supply and cost of procurement is a challenge. Some people may say that when there are general parts in the industry, you can choose common parts in the industry, but how do you solve some orders that require customization? When we encounter a project without an industry-prepared component, we can try to convert it into an internal common project across the company's product line.

2. The complexity of PCBA processing product portfolio

The complexity of the product portfolio refers to the number of products offered by the company on the one hand, and the different specifications, models and colors of the same product on the other hand, as well as many other options.

The more choices that some SMT processing plants offer to customers, the higher the complexity of their product portfolio, which means that it must prepare more inventory, even in response to urgent demand changes, while increasing supply flexibility, which is usually also means higher costs. To ensure operational efficiency and price competitiveness, more and more companies are now tending to simplify their product portfolio.

Of course, when we consider the complexity of the product portfolio, we must also consider the company's market positioning. The market positioning of some SMT processing plants is to provide customers with more choices. For example, I used to support the seaming principle of the business department. As long as there are seams on the wall, it should be attached. The product line is very complex and the product portfolio is very complex. The complexity of a product portfolio is directly related to inventory, supply, cost, and waste, and high complexity often means high costs.

3. The scale of PCBA processing

Large-scale SMT processing plants and distribution centers must match the shipments of large-scale products to achieve economies of scale and profitability. Small electronics manufacturers and distribution centers need to match their own scale shipments if they match large wholesales. The products of the goods are often not profitable due to overtime pay, low operating efficiency, machine equipment failure and maintenance, which is easily overlooked.

Therefore, in the choice of PCBa OEM procurement suppliers, it is necessary to consider whether the product shipments match the supplier scale, and the wrong match often means an increase in cost. The drivers of cost are closely related to the internal and external aspects of the company. When we evaluate whether the material is in an industry standard, when we evaluate the complexity of the product portfolio, when we evaluate the scale of the supplier, we can’t simply say whether it is good or bad, we must analyze the value of these cost drivers. For example, providing multiple product combinations is more complicated and expensive than providing a single product. If the market position of the enterprise is to provide customers with more product choices and is the core competitiveness of the enterprise, then this increase in cost is valuable.

When we manage the cost of the pcba OEM process, the purchaser must consider whether the cost increase factor can add value to the SMT processing plant, and how to find a balance point between the added value and the cost which is the test of PCBA processing buyers.