Hey Steve - Dell is now ahead of Compaq! As you mentioned, your question about OEM outsourcing can be very big and complex or, in some cases, it can be a relatively straightforward decision. It all depends on the company and its unique circumstances and requirements at a given point and time, and where it is headed. There is no cookbook for all the answers. Sometimes, it makes sense for an OEM to contract out virtually everything, including the design to an EMS. At other times, some or all of the core competencies are better retained and controlled within the OEM, with only some or none of the manufacturing contracted out. For example, in some highly competitive markets, some factors like design security, unique processes and components, time-to-market, government regulatory inspections & requirements, and a host of other factors may enter into the equation. At other times, it may be a matter of product volume, as you mentioned. Do you really want to be a little fish in a big pond? Who do you think gets the priority when push comes to shove? For low volume manufacturers, it usually makes more sense to be a big fish in a little pond. But then does the small pond have all the resources you need? As you know, there are no simple answers. Generally speaking, its a matter of tradeoffs. And, as in all decisions, what are you willing to live with and what can you live without? As far as a dollars-only answer, that is usually the most common, but wrong approach since it normally is based on short-term benefits. These short-term benefits are rarely weighed against the long-term survivability of the company. Costs are an important factor, but not the only factor (unless you only talk to Accountants). Being more competitive is really more important. Where is your company and its products and services (remember Customer Service?) going to be five or ten years from now? What are the goals? If you don't know the goal (or target) you are aiming for, how are you going to hit it? And I don't mean just financial goals which are, at best, more wishful thinking than action, if you don't have strategies to meet them, you won't. Well I better cut this short and let all the others get their two cents worth in. see 'ya. Ed Valentine Electronics Manufacturing Solutions 8612 Mourning Dove Road, Raleigh, NC 27615 Phone: (919) 270-5145, Fax: (919) 847-9971 Email: [log in to unmask] Website: http://www.ems-consulting.com ----- Original Message ----- From: "Stephen R. Gregory" <[log in to unmask]> To: <[log in to unmask]> Sent: Monday, April 23, 2001 8:25 PM Subject: [TN] Loaded question...outsourcing vs. in-house manufacturing... > Hi All! > > I've was asked by one of our sales people if I could give some information on > why it makes sense for an OEM to outsource assembly vs. starting your own > manufacturing capabilities. Obviously, this deals with printed circuits... > > I've done a lot of searching, and have some good info, but I thought I would > ask you all for your opinions to add to the mix... > > Generally, the reasons I've found come down to dollars, and core compentcies. > That is, a company may be very good in designing products, but lack the > facilities to produce the products they design efficiently. Where is the line > that you decide to invest the capital in automation, or doing the > manufacturing yourself to produce what you've designed, or just simply > outsource it? > > I know this is a very ambiguous question, a lot depends on product volume, > complexity of assembly, and a million other factors... > > One of the big examples I've found on the NET is Compaq computers, once a OEM > making everything themselves, practically everything is outsourced now...they > shut-down a beautiful manufacturing facility in Texas...but, they went from > almost falling behind Dell, to surging ahead to #1 in PC suppliers and > turning a profit... > > Just interested in your thoughts... > > -Steve Gregory- > > -------------------------------------------------------------------------- ------- > Technet Mail List provided as a free service by IPC using LISTSERV 1.8d > To unsubscribe, send a message to [log in to unmask] with following text in > the BODY (NOT the subject field): SIGNOFF Technet > To temporarily halt delivery of Technet send the following message: SET Technet NOMAIL > Search previous postings at: www.ipc.org > On-Line Resources & Databases > E-mail Archives > Please visit IPC web site (http://www.ipc.org/html/forum.htm) for additional > information, or contact Keach Sasamori at [log in to unmask] or 847-509-9700 ext.5315 > -------------------------------------------------------------------------- ------- --------------------------------------------------------------------------------- Technet Mail List provided as a free service by IPC using LISTSERV 1.8d To unsubscribe, send a message to [log in to unmask] with following text in the BODY (NOT the subject field): SIGNOFF Technet To temporarily halt delivery of Technet send the following message: SET Technet NOMAIL Search previous postings at: www.ipc.org > On-Line Resources & Databases > E-mail Archives Please visit IPC web site (http://www.ipc.org/html/forum.htm) for additional information, or contact Keach Sasamori at [log in to unmask] or 847-509-9700 ext.5315 ---------------------------------------------------------------------------------