Budgets from assembly house

Hence the big contract assembly houses such Celestica, Soelectron, Sanmina, Flextronics and Jabil--- each of which have more than $1bn in annual revenue.

Best regards, Spehro Pefhany

Hello Steve,

They may not want to or may not always be allowed to disclose their parts cost. Very large houses buy huge loads and have negotiated special prices. Often they don't have to go through distributors where others may have to.

My experience has been similar. A parts list is supplied, the board specified, along with expected quality levels, testing, QC and everything else. In return a total cost is quoted, IOW "the bid". That is compared to other houses and an order is placed.

Two things I do feel are necessary and that was usually no problem:

Preferred parts list: I like to see a listing of their "jelly bean stock list". Even without pricing info you can still compare, say, a BSS123 on their list versus your favorite FET. The 1k budgetary price of a major distributor that carries both is often a good indicator which type will be the better deal. Theirs will be a tad less expensive but you will have to go through your internal release process which costs money, too. Not just a part of your salary as the ECO generator but also that of the doc center folks, QA and others involved in the release.

Having an engineer from the assembly house in for design reviews: At least there should be a cost review. Often we were asked whether a certain part could be substituted to drop costs. At that point the savings had to be on the table so we could make a decision whether it was worth the effort. Next we sat down and hashed out test procedures. If these can be tailored to the gear and training they already have this will save cost, too.

Trust builds up over time. After one or two successful production starts I typically had no problems finding their part pricing. They simply told me, trusting that I would not broadcast that information. A contract phrase to that effect helps. A border or an ocean between them and you doesn't have to be a problem here either.

Regards, Joerg

Hello:

Where i work we design embedded systems, obviously the pcb design and parts list of those systems are later sent to an assembly house that stuffs the pcb, solders it, etc. That same company buys the parts we specify from distributors, my question is: Apparently they don't give prices of components, or pick and place cost or soldering, we send them the files and they give a budget, or proforma for the whole board.

Is this common practice or are we being screwed?

I say this because it's is a pain to get an optimized parts list when they usualy say "those are cheap, those are expensive, we don't have that, tell us what you need and we'll see if there's anything similar in stock" but they don't give a list of their "on-stock" parts...

Best Regards

Hello James,

Many of them do have stock but it is behind chain link fence and contractually still "belongs" to the manufacturers or distributors. Meaning they have a sweet deal where they only pay for parts when they actually move them onto the SMT machines. Like having a fridge full of different ice cream cones but you only pay when you eat one ;-)

Amen. If every company did that there would be a lot less production hick-ups. The sad truth is that they often wait to hire a consultant until a serious issue arises. IOW when some level of panic sets in and it has percolated up to board room level.

Even larger ones I consulted for often didn't want to run their own assembly. It just didn't make financial sense.

Regards, Joerg

Depends who you use. I've seen individually costed BOMs and ppl who wouldn't let you know anything.

Open book pricing makes so much sense since you can see where a component substitution might make sense.

As a recent example, I noticed a item ( a heatsink actually ) @ 87 cents on a BOM that was clearly simply not a popular local item. I queried an alternative and they offered one with slightly better performance, very similar footprint and about 25 cents IIRC.

The outfit in question charges 30% over the costed BOM for assy and test btw.

Graham

I was in the same situation several years ago. Then for a production run, we asked for quotation and released it to them to purchase the parts, as they said their were organized and able. The huge surprise came afterwards. Their "able" purchaser used to buy sticks for the best price. The leftover sticks of special and expensive parts were handed over to us, and did cost as much as the whole production. Ever since then I do supply the parts, except the trivial stuff such as 1206, 0603 R's and C's. This has the advantage that I do have my stock parts, I do have the right footprints and the prototype has the same parts as the production.

When ordering from abroad, what I do regularly, the customs handling fee can be laid over to a much biger number of parts.

Recommended.

Rene

Of course the panic tends to drive up the cost of the solution. So its not all bad on my part since I sometimes get called on to help out in these cases. Of course, I'd prefer (and my doctor would concur) that it would be better for everyone to be involved up front.

I contend that there is more in the cost equation than just money. Turn around time, the ability to change assembly line priorities as market demands, the ability to really understand the process and get good DFM practices, develop test strategies that really match the assembly process, higher quality, happier customers, ....

I'll agree that for lots of us it doesn't make sense but there are a lot more variables than just the cost of the equipment (that you can amortise over many years).

Just my $0.02CDN for what its worth.

Hello James,

It's similar in the medical field. A friend went to have an angiogram. He felt nothing wrong with himself and did it only to please his doctor. Sure enough they found a 90% blockage, meaning he was probably just weeks away from a massive heart attack.

True but it gets to be increasingly difficult in "modern" countries. Taxes on inventory (machines plus stock), workers comp insurance rates and so on. Many times I have seen those costs swamp the advantages of having your own production lines. When you are outsourced with production it becomes much easier to move it into a biz friendlier region should such cost pressures arise.

Regards, Joerg

Thank you all for your replies, i'm glad to hear this is not unusual, i'll concentrate my efforts on getting a parts-list.

Best Regards

I work on much smaller scales than the previous posters. I have made