How to Sustain Growth in the High-Tech OEM Market

There are multi-level tasks that high-tech OEMs need to monitor and support along the manufacturing chain to ensure successful product delivery. These stages consist of time to market, go to market, supply to market, quote to cash, and after sales support. All along these stages, time is imperative to meet aggressive product development deadlines, ensuring customer demands. If you thought your development lifecycles were already shrinking, be prepared for less room to maneuver.

Along with increased time crunches, there are other clear challenges that are impacting the high-tech OEM market. Business Insider recently outlined the biggest obstacles that the SMB market is facing now in their 2013 ISM Report:

  • Gross Margins. Margins for manufacturers are increasing by 5% according to the report. What does that mean? Companies are losing the ability to protect their gross margins, and as a result, sales efforts spike up. This is a bad combination for maintaining profitability.

  • Inventory Disconnect. There is a historically low level of inventory available to meet customer demands, which are escalating by the day. The net effect of a slow-moving inventory could lead to reduced pricing that doesn’t line up with margin goals, and limits a producer’s ability to deal with fluctuations in customer demand.

  • Changing Power Dynamics. Customers who control the fates of suppliers, as well as distribution companies that store products and handle order fulfillment, are sending shocks up and down the supply chain. As a consequence, manufacturers are forced to occupy high volume niches or gain scale.

For high-tech OEMs to make necessary changes to anticipate demands and respond to these market shifts, they need to adapt to new advancements, strategies, and approaches. They also need a more streamlined process for analyzing information to make more informed decisions.

According to a report from SAP, analysts recommend that OEMs improve demand generation and multichannel sales capabilities to monitor, evaluate, and predict demands before they hit the order wires. Some essential pieces of knowledge that OEMs need to record and analyze are past customer orders, including what orders customers have fulfilled in the past and how often they have ordered.

This type of forecasting is invaluable to companies, and can augment perfect-launch capabilities, meaning that companies can significantly improve their time to market and, simultaneously, their time to value. With improved communication throughout the manufacturing chain, companies can be more efficient and more capable of adapting to order spikes.

If you’re interested in learning more about how SAP’s new line of High-Tech OEM technologies can streamline production and profitability while making your company more competitive, contact one of our Bramasol experts today.

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