“I am not focused on acquiring net new customers right now, I have the best labels in the world I work with…what I am challenged with is solutions that will help me go deeper into existing customers and grow share of wallet.”
The person who recently said this runs marketing for a global EMS provider. New to contract electronics services, this person spent most of their career with one OEM label serving the computing/servers/storage/services sector.
The challenge this person faces should not be determining how to go deeper into existing [OEM] customers.
Plus, growing share of wallet should not be the goal.
Growing an EMS provider’s wallet will happen naturally as a by-product of solving your customer’s most pressing business problems.
In your search results you can further target other Industries and/or Services plus, you can add more geographies to your search.
What keeps OEMs up at night?
Any number of surveys on this typically amount to similar concerns for the ‘best labels in the world’. OEM or otherwise. Here’s a partial list from Allianz Risk Pulse / Allianz Risk Barometer*:
– Supply chain risk
– Loss of reputation or brand value
– Market stagnation or decline
– Intensified competition
– Cyber crime/espionage
EMS challenge or OEM problem
In conversation with OEM and EMS executives through the years, the challenge I see preventing EMS providers from deepening relationships with their existing OEM customers is, in most cases, OEMs are reluctant to fully trust their EMS/ODM partners.
SEE ALSO
Electronic NPI flowchart, more NPI articles
But I argue this type of OEM disclosure is indeed necessary if their electronics services partners are to become able to do the type of advanced planning necessary to really help OEM customers meet both technical and service capability requirements, in a timely manner, to better meet their near- and long-term needs: developing or purchasing technical capabilities, freeing up or acquiring additional capacity…for OEM programs.
Otherwise, EMS providers are more likely to be in a constant state of playing catch up.
One sure advantage of full disclosure? Faster provider response times to OEM product changes and unforeseen market forces — improving how the OEM’s supply chain competes against his competitor’s supply chain (who might not be as intimate about exchanging product/roadmap info with his electronics services partner).
Instead, today (most?) OEMs typically provide providers only with weekly, monthly, quarterly forecasts, along with frequent ECOs inserted into product on the production floor and revising previously finished goods inventory in the warehouse.
So, will electronics OEMs ever be willing to carry this risk when doing so could result in roadmaps falling into hands of competing OEMs served by the same provider? Add to this, EMS provider employees switch companies frequently and tend to stay in industry, often taking customer relationships and knowledge with them. In the case of the latter, policing a former EMS employee at his next EMS employer against disclosure of a previous OEM customer’s roadmap would be even more difficult to manage.
Building Trust
The question for EMS providers wanting to go deeper into existing customers then becomes: How do I earn the OEM’s trust at the level we both need?
From one OEM’s perspective: “Why be willing to take on this much risk telling your partner your entire product strategy? Would you give all of your passwords to even your closest friend?”
Let’s hear what other OEMs have to say.
*Allianze Risk Pulse (PDF)
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