In a recent blog, I attempted to dispel the myth that there is a clear relationship between volume and price of electronic components. Many still find this hard to believe. They hold to the idea that price is somehow tied to manufacturing cost, which is related to volume. This is rarely the case in the […]
Who Benefits From Component Price Secrecy? Read More »
In a previous blog, I discussed some of the myths surrounding the relationship between price and volume. Another often misunderstood subject is “security of supply.” In analyzing our clients’ component spending, we frequently see unnecessary costs incurred that create an expensive (and often false) sense of “supply security.” Lytica’s freebenchmarking.com reports reveal the exorbitant dollars
Purchasing Strategies: Security of Supply Read More »
For years, I have been telling people there is no relationship between volume and price. Occasionally, I meet an enlightened soul who agrees with me. More often, I am met with blank stares of disbelief. Yes, I agree that, when you buy a few engineering samples, look at pricing on a distributor’s Website, and ask
The (Non) Relationship Between Volume & Price Read More »
Now that the Consumer Electronics Show (CES) 2012 is over and the flurry of Freebenchmarking.com activity resulting from it is under control, I have had time to reflect on the various participants at the exhibition and the issue of vertical integration. I must confess to being most impressed by the Koreans and would give them
Vertical Integration Champions Read More »
Exactly what knowledge do market-leading companies gain from vertical integration? My thought process here considers a very high-level product design process. Though I will portray that process as linear and sequential, the reality is messier, iterative, and probably chaotic. For my purpose, the process starts with a market spec, which defines the customer experience (a
Knowledge From Vertical Integration Read More »
I am in the business of price benchmarking and cost reduction, but even so, I am amazed at what supply chain professionals have achieved. With specials and deals of all kinds during the holiday season, it is astounding the value that is being passed on to customers at very low prices in electronic products. Thirty-two-inch
The Virtues of Vertical Integration Read More »
As chief procurement officer for Nortel Networks Ltd. during the downturn in the optical business in 2000, I had to preside over the management of billions of dollars of excess material. This is not something I ever want to have to do again, and I am sure none of you want to do it, either.
Avoiding Inventory Overload Read More »
Corporate governance is a pretty dry subject in the best of times, but it just may become a bit more interesting, particularly if we have gotten it wrong and it turns out to be the source of the current worldwide economic crisis. The Occupy Wall Street protests clearly show the people’s frustration with high unemployment
An Inevitable Clash Read More »
In our work at freebenchmarking.com, one of the surprising findings is the amount of cost reduction available to companies by just implementing pricing that they have already achieved with suppliers. In times of economic uncertainty and with price reductions getting more difficult to achieve, companies can’t afford to let profits leak away. We see two
Savings in Your Backyard Read More »
Knowledge chains enable supply chain performance. They bring together the information and context that let you make decisions and take actions. Gaps in a supply chain are noticed and fixed immediately, but holes in a knowledge chain often go undetected. This is because supply chain gaps are usually catastrophic, but knowledge gaps are performance-limiting. How
Many Advantages of a Strong Knowledge Chain Read More »
