The cost structure of electronic products is very important to the success of contract manufacturers (CM / EMS). In a highly competitive market, the ability to reduce BOM costs, increase gross margins and have maximum flexibility in setting product pricing has become critical. With their biggest manufacturing expense being the electronic components, CM / EMS companies are increasingly finding ways to reduce their material cost by utilizing strategic global sourcing. As a crucial sourcing arm to major EMS worldwide, SHIN Group offers increased savings and higher business flexibility.

• Increased gross margins and profit
• Immediate and effortless business results
• Improved buyer position
• Strengthened competitive positioning
• Additional exposure to potential new OEMs

Customer: World class EMS providing products to various verticals
Business start: January 2012 (within one month from first contact)

Challenges

• Reduce material cost (80% of the spend accounts for mainly local distributors)
• Increase gross margins in a highly competitive market (more than 30 local EMSs)
• Reach new, high-potential customers based on product and verticals expertise
• Improve efficiency and profitability so as to fund continuous growth in a market with increasing consolidations

SHIN Group’s service

• Sourcing and procurement –  Based on SHIN Group’s Sourcing Solution for substantial cost savings
• Design-chain and engineering – AVL management, component engineering, technical support
• Fulfillment and distribution – On-time delivery with multiple shipments per month and option for VMI

Result

• More than one hundred of high-value components are sourced with average savings of 13%!
• Continuous savings on items that were already cost reduced – ongoing cost reduction.
• Potential customer introductions made by SHIN Group, helping to leverage EMS business.
• Within a short time, SHIN Group has become a close partner and top supplier.
• High value for customer: immediate results, low prices and increased gross margins, competitive logistic terms, high on-time delivery rate, improved competitive position, improved price benchmark power and exposure to new customers.