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During contract negotiation, AEG can act
as a facilitator between the two parties or work behind the scenes
in an advisory capacity. In either role, our involvement in contract
negotiation includes helping achieve the lowest possible pricing at
which the contract manufacturer can make reasonable and acceptable
profit given the client’s requirements – a "win-win" business
relationship.
Contract Manufacturing Consultants has
developed a cost and pricing model that can be of considerable
benefit throughout the engagement. This model can be used to
reliably estimate printed circuit board assembly and systems
assembly conversion cost and pricing. It is activity-based and
utilizes data inputs of the client's own product, process and
support requirements. It incorporates individual printed circuit
board production processes and infrastructure costs for varying
delivery systems, i.e. high mix/low volume, mid-volume and high
volume production facilities.
The AEG model can answer a wide
variety of what-if questions such as how costs might shift with
changes in volume, mix or delivery system. It can also be used to
assess the reasonableness of contract manufacturer pricing proposals
and longer-term pricing viability. Since the model incorporates
labor and other infrastructure costs for key contract manufacturing
regions worldwide, it readily provides estimates of comparable
conversion costs and likely pricing in countries such as India, Sri
Lanka, Malaysia, Korea, China and Thailand.
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