With a mission to expand the supply chain capabilities it can offer its mid and high volume EMS customers, MEC’s Singapore IPO (International Purchasing Office) was founded in late 2011. From this convenient Southeast Asia location, Singapore offers MEC additional strategic advantages in tapping a range of low-cost markets from India to China.

Although the IPO is still in start-up mode and newly identified suppliers are in various stages of evaluation, the past year has uncovered some significant cost reduction potential on several commodities. Suppliers undergo an approval process which involves auditing, and a three month sample testing procedure.

In general, after discovering MEC didn’t have any direct relationships with suppliers in Asia and that all suppliers involved at least one cost-increasing intermediary, the IPO team successfully negotiated better payment terms with many in the existing supply base in China. Also, to help lead in the development of a broader base of high quality sources, each new supplier undergoes a factory audit. Auditing trips are being scheduled about every 8 weeks.

“We value our current supply base and plan to continue to work with those who maintain competitive pricing. However, identifying additional suppliers and developing direct relationships with both these and our current suppliers improves both our negotiating leverage and options in the event of allocation or unanticipated supply chain interruptions. Long-term this improves the value we offer our customers for the electronics manufacturing and PCB assembly services they need.” said Jered Stoehr, MEC’s Director of Asia Business Development.

2012 saw a strong foundation laid, despite the fact that it will take time for MEC’s Singapore IPO to grow the approved supply base and set up truly optimized logistics – 2013 should see identified cost reductions start to materialize. More information about the IPO can be found online by visiting MEC Companies Business Units – Singapore IPO.