As an OEM that subcontracts the build of your product you need to be more aware of what excess is building up and what is true excess (will be consumed in a reasonable time frame) and what is obsolete (no longer required and depreciating fast). As the stock owner it is important that you take charge of this stock otherwise it will sit in your EMS warehouse indefinitely while you pick up the bill for storage and handling costs. There is nothing stopping you as an OEM engaging with us at Component Sense to manage your excess stock for you while it is still under the control of your EMS provider.
It is rare for the EMS company to be properly incentivised to minimize your stock for you. You could even argue that it is in the EMS companies interest to let you screw up with your forecasting as they will be able to sell you that stock at a margin and make profit on your excess. Many contracts do not protect you, the OEM, enough”. The amount of effort your EMS provider puts into reducing your stock liability can often be minimal. Don’t worry, we can help.
As a client of an EMS company your PCBA provider may:
Whichever category your business falls into, our experience, built up over 20 years, working closely with EMS and OEM clients shows that this process is rarely effective.
Many EMS companies “fully managed stock systems” simply charge you for all excess and obsolete stock. This cost is often built into the component cost so is invisible to you as an EMS customer. With this system all proceeds from any sale of obsolete stock are typically fed back to the EMS provider. Often you may have embarked on this course of action believing it to be simple to manage whilst still trusting that you are getting a decent return on any excess, obsolete or slow moving components. All you need to do to see if you are getting a fair deal is to submit your E&O stock report for a free, no obligation assessment.
Using “best efforts to minimize your E&O liability”. This is something most EMS companies promise when you sign up to subcontract your product build. In reality it often means passing your stock list around a few brokers with little effort and even less success. If you're really want to minimize your liability on slow moving, excess or obsolete stock then you need to be working with the experts. Even without removing your stock from your EMS partners site we can start managing and marketing your stock to a Global audience. Submit your E&O stock report for a free, no obligation assessment.
Typically 10% of your component spend will end up as slow moving, excess or obsolete stock. Never blindly opt for scrapping your stock without first having it assessed. It may seem easier to request a destruction order but there could be significant value in your stock. The process for realising cash from your stock is easy and effortless on your part. All you need to do to begin the process is submit your E&O stock report for a free, no obligation assessment and we will do the rest.
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