Is it time for a globally standardized price?

SourceESB

September 6, 2006


Is it Time for Global Standard Pricing on Components?


Do the prices you pay for components change when you shift production from North America to Asia? This is apparently a common and frustrating experience for component buyers. A product that is designed in North America or Europe often gets shifted to Asia for volume production. But if the price of the components changes as the production shifts across the world, the economic validity of the product might be in jeopardy.

A number of large component buyers and distributors have started voicing concerns about global pricing. Their request? They want the components industry to standardize the price for the parts wherever they are purchased around the world. “Sometimes we have trouble getting the same costs when production moves around the globe,” says George Richter, VP of SSG product management for Arrow Electronics Inc. in Melville, N.Y. “If a customer is bidding on my contract, I want to be able to tell that customer they will have the same cost when they move to Asia.”

Without standardized global pricing, the cost of components can be a mystery as the manufacturing of a product shifts to Asia. “Sometimes we have to wait until the production actually moves to Asia before we get answers about pricing,” says Richter. “So we have trouble giving our customer seamless, unified pricing. If there was a consistent pricing strategy from the supplier, we could assure our customer we can support the product with the same price.”

More at http://www.sourceesb.com/configurable/article20060906.html

Should there be a standardized prize for products?