Insights from CBA’s latest industry report

Charlie Barnhart & Associates, LLC (CBA) released its Fourth Quarter 2015 Outsourcing Navigator Council (ONC) report to member companies last week. The main issues discussed in the accompanying webinar were:

  1. Re-introduction of full TCO (Total Cost of Outsourcing) model. Following an absence of two quarters necessitated by pricing issues in the industry, CBA has reintroduced the OEM Internal Spend and Geographic Risk Modules that in combination with the Global Pricing Module represent the full TCO analysis.
  2. On average, OEMs spend more internally in support of their outsourcing initiatives than they pay their EMS for transformation services.
  3. OEMs in general are underestimating the cost of building its own products. In 4 out of the 5 surveys conducted this quarter, the expectations of OEM’s were below breakeven of even the most efficient EMS companies.
  4. The rate of reengagement by OEMs in the supply-chain (i.e. OEM controls pricing) has increased above CBA’s initial estimate from the first quarter this year.

Members of the ONC receive quarterly industry data reports, associated webinars, and updated Total Cost of Outsourcing (TCO) Tool in Excel format. For more information about joining the ONC and an overview of the data sets and benefits included in membership, please refer to this website:


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