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Five Strategies for Profitable OEM Solutions in Challenged Markets

Optimal OEM strategies are a moving target in today's challenging marketplace. Regardless of product focus, most OEMs are rethinking supply partnerships, collaborative SCM tactics and purchasing policies on a daily basis to counter eroding margins and tenuous consumer buying forecasts. But change for change sake is never a reliable model for success. Here are five important strategies to consider:

1. Keep channels of communication open with trusted suppliers. New solutions are the fruit of constant discussion and review.
2. Avoid reactive, short term changes in suppliers based on cost reduction alone. Long term relationships create amortized savings based on mutual benefits.
3. Don't underestimate the value of supplier insight from multiple OEM industry experience. Suppliers often see broad market trends first from small indicators across the supply chain.
4. Include key SCM suppliers in new product development. See #3 above!
5. Examine the value of even small efficiencies with your supply partners. Minute adjustments along links in the supply chain can increase margins for all supply chain parties.

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