Manufacturing Industry

Strategic Sourcing is Palm's pilot: two years ago Palm started to take strategic sourcing seriously. Result: lower total product cost, higher gross profit margins and reduced inventory. (Buying for Computers).(virtual manufacturing )

Purchasing, April, 2003 by Carbone, Jim

For the past 10 years or so, many analysts and industry watchers have predicted how OEMs will move to a virtual manufacturing model. In such a model a company designs and markets a product, but outsources manufacturing to an electronics contract manufacturer. While many companies outsource some manufacturing, most of them still continue to have internal manufacturing as well, especially for high end products.

One company that has embraced the virtual manufacturing model is Palm Inc. maker of handheld computers such as Tungsten T, Zire and other portable computers.

"We are a virtual manufacturer," says Angel Mendez, senior vice president of global operations and accessory solutions group at Palm, based in Milpitas, Calif. "You are not going to...

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