An uphill struggle: The most common challenges OEMs face in 2021

As an OEM improving the efficiency of your business is an ongoing task, however, certain challenges make this undertaking an uphill struggle. An OEM supply chain can be a particular source of contention for growing businesses. Whether you’re looking for Churod Electronics products or optoelectronics, keeping your supply chain efficient and productive isn’t easy.

Read on for the most common challenges OEMs are facing in 2021.

Inventory errors

Bad inventory can have a persistently negative impact on a business from one month to the next. For many businesses, their inventory is part of their profit – having an inventory that is understocked, or overflowing with obsolete parts or components is considered to be a drain on your revenue. When your inventory is poorly managed and littered with mistakes, those errors filter their way into other facets of your business, including your customer service. The more disorganised your inventory is, the more likely your shipments are going to be late, wrong or neglected as your team scrambles to source the right parts.

In addition, the more inventory you have lying around, the more likely it is to decrease in value, especially as it’s likely to become damaged, stolen or destroyed as it sits idly in your warehouse. Essentially, persistent inventory errors are a complete waste of money for your business.

Chronic and persistent overspending

Chronic and persistent overspending in business can have a disastrous effect on your success and your bottom line. While your procurement team scrambles to source the right parts of your business as quickly as possible, a lack of time and communication throughout your company can result in duplicate or incorrect orders and these additional and avoidable spends, quickly add up. Persistent overspending as part of the procurement process can mean issues throughout your business, such as failing to pay bills on time, having to borrow more, failing to have any cash set aside for business growth and even struggling to pay your employees.

Quality issues

The consequences of persistent quality issues aren’t hard to imagine, however, you may not realise how far they reach. Not only will your business have to spend even more money as it scrambles to cover the cost of the poor components and electrical parts, but quality issues can also impact the relationships you have with your clients, who are more likely to look elsewhere for a reliable and quality-driven OEM. Quality issues can damage your bottom line and your reputation.

Pricing shifts

Maintaining costs and keeping a good financial balance is another concern OEMs are facing. Frustratingly, when component part suppliers become unpredictable with their pricing, and costs begin to shift, it can be difficult to maintain that balance. And if you’re having trouble sourcing a particular electronic component then you may find yourself at the mercy of a supplier who has the monopoly.

The solution

For many OEMs the solution to all these difficulties is simple – by switching to an online marketplace to source their electronic parts, they’re in a stronger position to maintain high levels of quality, improve customer satisfaction and keep costs low. 

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