As a business, you want efficiency, and effectiveness because your core objective is to maximize value for your different stakeholders. You want your products to reach the customers in the right quality, time, and in the right amount. You want raw materials to be available in time for efficient production to happen. You need all the moving parts working optimally to meet your internal and external obligations. This is why more and more companies are seeking the services of EMS partners for the provision of an array of value added products. However, this can place you at a risk, particularly because you give an EMS partner control over vital components of your operations such as supply chain management.
While a good EMS partner offers numerous benefits such as effectiveness in procurement of materials on your behalf from your supplier, creating long lasting relationships with these suppliers, and streamlining the supply chain, a bad EMS partner can negatively affect your business in various ways. Below are some of the ways a bad EMS partner can be detrimental to your business goals.
Failed Deliveries
As a manufacturer, you require raw materials to be available within the required dates, and you also need your products to be available in the market in the correct time. A bad EMS partner can result in inefficiency in the supply of raw materials which may delay and undermine production. On the same breadth, a bad EMS partner can undermine your company by disrupting the smooth flow of finished goods to the market, which may give your competition and opportunity to fight you in the market.
Bad Supply Chain Management,
Establishing a quality and value driven relationship with suppliers is one of the core responsibilities of an EMS partner. Additionally, with greater control over the flow of goods from suppliers and the flow of goods to customers, your EMS partner has the greatest control over the supply chain. Poor communication practices, ineffective relationships with suppliers, and poor resource tracking are some of the costs of a bad EMS partner. This can cause a collapse in your supply chain, which will undermine many stakeholders, including your customers, your suppliers, your board, and even your employees.
Brand Image Loss
In business, image is everything. No business can afford to have a bad reputation in the market, because this is one of the drivers of business failure. It is for this reason that companies spend billions every year to build their brand image. Shortcomings arising from a bad EMS partner can really affect your brand image. Consumers may associate your company with late or ineffective deliveries, and suppliers may associate your company with poor business relationships. Therefore, you must be very keen on your choice of EMS partner to avoid a poor reputation, which will indubitably lead to poor sales.
Higher Rejection
Customers tend to reject products which arrive late, or which have defects. A bad EMS partner can greatly undermine the quality of your product in the market, particularly as a result of their influence on design and sourcing of materials.
Disgruntled Stakeholders
For your company to be successful, you wan to make sure that your stakeholders are happy. A bad EMS partner can get in the way of it. Whether it is customers who are angry as a result of poor or delayed products, suppliers dissatisfied with quality of correspondence, or your board satisfied with the financial and image losses associated with a poor partnership, your company will greatly suffer in the market.
Image and Financial Loss
High returns and/or rejections, poor sales, and increased costs of raw materials due to faulty sourcing will result in a huge financial blow for your company. On the same breadth, the hit on your corporate image may take years to restore. It takes a great deal of time and resources to try and woo back your customers after poor or substandard service.
It is therefore clear that a bad EMS partner can give you sleepless nights as the owner, or as the manager of a company. Take extra care and ensure that you select an effective and efficient EMS partner.
