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  • Transparent Pricing, Costing & Sourcing

    Open-book pricing: An AMI distinction

    Contrary to the fundamental idea that collaborative customer relationships are the essential prerequisite for discovering and capturing higher value, most middle market customers are held hostage by their EMS suppliers. 

    Among a typical EMS supplier’s secrets – never, ever to be divulged to a customer – is critical business and technical information about the customer’s own products or materials, including part number cost and source information; cell level cost, process, and technical information; and the associated margins that the EMS supplier applies to those costs and processes to arrive at its prices to the customer. 

    Over time, with the accumulated impact of perhaps dozens and dozens of mostly small changes, the supplier acquires sole knowledge of the sources and costs for a significant subset of the requisite materials.  And thus the customer loses control of its products and its supply chain, which means that it must start almost from scratch if it wants to either change suppliers or in-source the work to its own operations. 

    This supplier secrecy might be acceptable in traditional business relationships where the supplier is selling its own products to its customers.  But it is clearly wrongheaded in outsourcing relationships, where the supplier is retained to serve as an extension of the customer and, as such, to contribute as a full and leading participant in driving down costs and prices.  And that simply won’t happen if the supplier has taken detailed costing, pricing, sourcing, and technical data off the table.

    In contrast, among AMI’s core principles is the conviction that the free flow of information helps cut through the happy talk and contributes to turning illusory goals into achievable targets.  This is perhaps most true for part number and product level costing and pricing, where the right information is the essential common ground for powering the supply chain to achieve meaningful cost down results.

    That’s why AMI provides customers with detailed part number costing and sourcing; cell level process and technical detail by product; and the margins AMI applies to these costs to arrive at its prices.  For proof via just one example, click to view a sample of AMI’s costing and pricing matrix, which is a principal document associated with each AMI price quotation. 

    AMI, with its unwavering policy of across-the-board transparency for customer-critical information, is the right size and the best choice for the EMS middle market.

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