The old tactic of outsourcing to a low cost geography simply to deliver lowest cost direct and indirect labor was never a panacea supply chain solution. In fact, when evaluating solutions for lower volume and higher mix products typically found in the medical, industrial and public safety segments of the OEM market, IL & DL costs are only one subset of the total cost to land the product and service the ultimate customer.
In this paper, there will be examination of what actual cost components should be included in a landed cost analysis, the soft costs that an OEM should consider to deliver outstanding performance in quality, logistics and delivery management of the supply chain solution. A detailed comparison using a 'case study' will be presented to demonstrate a total landed cost option versus one that is focused on IL/DL cost.
SMTA - Surface Mount Technology Association is a non-profit international association of companies and individuals (totalling 4,000) involved in all aspects of advanced electronics assembly, surface mount and related technologies.
IPC - Association Connecting Electronics Industries is a US-based trade association dedicated to the competitive excellence and financial success of its nearly 2,600 member companies which represent all facets of the electronic interconnection industry, including design, printed wiring board manufacturing and electronics assembly.