Cost Reduction Strategy For Medium And Small-sized Mobile Phone OEM Enterprises

Over the past 10 years,China's domestic mobile phone companies have risen rapidly.Mobile phone sales accounted for more than half of the global market.Sales growth did not drive the development of medium and small-sized OEM enterprises.the salary of an enterprise worker has increased by 10% per year over the past 10 years,while housing price have increased several times,vicious competition among enterprises and customer transfer cost pressure to OEM factory,all of these factors further raise the operating costs of enterprises.Based on the industry background,this thesis makes recommendations from the perspective of cost reduction.41 medium and small-sized OEM factory from Pearl River Delta regions has been choose for this thesis which investigated in to find out the whole operation situation,Statistics show that 58% of the enterprises in the Pearl River Delta region are facing operational difficulties.The result show that SMEs(OEM)are facing a severe development environment and eager to take the operation cost reduction strategy as soon as possible,so how to reduce the cost is necessary critical.Based on literature summary,we find that the path of OEM factory transformation and upgrading is a very difficult way,many SMEs are used to the contract business model and hard to change and have been locked in the lower part of the global value chain(GVC)according to the division of labor.Second,we surveyed Huawei and other well-known mobile phone brand enterprise,found that OEM model is still the mainstream business model of these enterprises.OEM business model has its strong vitality.And then we take some famous OEM factories as the case background,analyzing the involving root-cause of factory close,operating cost structure,product quotation and profit model,found that direct human cost is the core of manufacture cost and more than 50%.Finally,compared the troubled OEM enterprise with the industry advanced OEM enterprises,there are three cost reduction strategies are proposed for companies to choose from,Contains automation applications,DFM procedure and Six Sigma management,illustrate the profit performance with case accordingly.Boost OEM factory confidence,And put forward feasible suggestions on the problems that enterprises may encounter in implementing these strategies,hope this thesis will help medium and small OEM enterprises.