Myself Rajat Bothra Director East India Technologies Pvt Ltd the biggest Electronics Manufacturing Services company based out of Bengaluru India and I’m also an author of the book. Know hear How OEM can Bulldoze their competitor by choosing an EMS partner
Now Lets get to the point:
Growth
Embarking on an outsource strategy enables business leaders to focus on product development, marketing and sales. Free from the day-to-day shop floor distraction they can spend more time listening to what their customers really want. In turn, they can focus on designing new products which continue to meet their ever changing demands. Or develop new services and ways of working which enhance the customers experience when buying the product or using the service.
The sales team are no longer constrained by internal capacity or have to fear being caught out by over promising and under delivering. When they close a sale they will have the confidence that it can be delivered, without putting undue stress and strain on other areas of the business. This, in turn, helps create a greater sense of trust between the end customer and OEM, resulting in further orders being placed.
And whereas before the OEM may have had to look at ways of cutting costs to boost profits, they now simply need to focus on selling more units than they have done so before. Sounds simple. And if they also manage to reduce some of their overheads as well, then that’s even better.
Quite often OEMs focus their attention on cost cutting exercises to help improve profit levels. Unfortunately, sometimes they cut too deep and then struggle to resource effectively and keep up with demand when things pick up. But increases in profit don’t necessarily have to be about cutting costs. Selling more of the same can achieve an equally positive result.
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Flexibility
In order to grow an OEM must remain agile. They need to get new products out to market before the competition. They must be able to react to unknown demand patterns and deliver products within an ever decreasing timescale. Amazon Prime now deliver certain orders in just a few hours – how long until this becomes the ‘norm’ for us all? OEMs have to remain one step ahead of their customers and evolve their products and services as market conditions change or they face going down in history as yet another company slow to respond which then missed out.
Unfortunately, the amount of time, resource, investment and board room attention a manufacturing operation requires hinders how flexible an OEM can truly be. For example, if the engineering team are constantly out on the shop floor firefighting to get existing products through the production process they will struggle to find time designing new ones and getting them out into the market place. And unless the OEM is prepared to eat up cash and build ‘just in case’ stock for when peaks in demand occur, they will have to constantly juggle having enough product to fulfil orders and keeping their FD happy. Unfortunately, experience suggests that both of these are difficult to achieve. And it’s almost guaranteed that just when you think a customer won’t have demand for an ageing product variant you no longer keep in stock, they try and order it. In bulk.
Although this video post touches on two key benefits of outsourcing in truth there are many more. It’s fair to say though that the extent of such benefits are only realised when a clear strategy is in place, with buy in from the top. Short term outsourcing projects usually end up costing the OEM more in the long run. And those that struggle to relinquish full control or do so over a prolonged period of time will have mediocre results.
But of course, such an important decision requires a great deal of trust and research. With over 980 Indian EMS companies offering (what appear on the surface) to be similar services, it’s important OEMs take time to explore their options and find the right partner for them
East India Technologies Pvt Ltd offers a complete range of supply chain and manufacturing outsourcing solutions that enable you to spend more time focussing on your core activities, such as: designing new products, marketing, and sales to help grow your business.
To get a free quote for your product kindly call +919818666080 or email us:info@eitpl.com or visit us at www.eitplems.
