By Curtis Campbell and Keith Wheaton
Why do original electronics manufacturer (OEM) sourcing teams stay at a contract manufacturer whose performance isn’t on par with their expectations? Typically, it is because transferring that project carries significant cost, both in terms of non-recurring transfer cost at the contractor and in terms of personnel time, travel cost and stress at the OEM. Projects that are not a fit for internal production often stay in place for similar reasons. Perhaps the biggest reason for keeping an inefficient project internally is because it is often difficult to fully document for transfer.
Why do original electronics manufacturer (OEM) sourcing teams stay at a contract manufacturer whose performance isn’t on par with their expectations? Typically, it is because transferring that project carries significant cost, both in terms of non-recurring transfer cost at the contractor and in terms of personnel time, travel cost and stress at the OEM. Projects that are not a fit for internal production often stay in place for similar reasons. Perhaps the biggest reason for keeping an inefficient project internally is because it is often difficult to fully document for transfer.