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Is Agility Now the Most Important Factor for OEM Service Providers?

What should you look for when choosing your OEM provider.

What’s the most important factor of all OEM services? Quality. Obviously. So much so, that it is implicit and we will power right through to other factors, such as: innovation, fill quantity, cost, turnaround, and customer service. Ranking these factors for the entire automotive industry is not possible. But their influence may continue to be reprioritized in the accelerating technological environment.

Industry Week emphasises three trends in vehicles: “connected cars” (wi-fi enabled, back-up cameras, and sharing car services), electric vehicles, and new materials. Global car companies are continuing to push boundaries and create faster, safer, more powerful vehicles. And ultimately, “new vehicles mean new processes.” With that in mind, let’s proceed.

Innovation

According to PwC’s Automotive Trends report, ROI on automotive innovation is concentrated within companies who are creatively exploring and navigating new ideas. This is true for OEMs and distributors, because as an industry, there is pressure to discover and claim the next defining step for vehicles. A tried-and-true way to innovate? Trial and error.  Agility. One vote for agility.

Cost

Cost is always going to be a factor when deciding which OEM service provider to use. Cost is tightly tied to innovation, and therefore an OEM and distributor must have aligning priorities. PwC’s report suggests that OEMs should be taking notes from the aircraft industry and combine strengths. As investment in innovation continues to remain conservative, OEMs could avoid a lot of redundancies by sharing efficiencies, innovation, and technologies. Until then, secrets will be kept, and distributors need to decide if lower costs are more important than other factors.

Fill quantity

This is an interesting one, because is tied to innovation, turnaround, services, all of them. Everything is tied everything, fine. But fill quantity could be the opposing force of cost. Or lower costs. Classic economics, higher order quantity, lower price. But when layering on the industry trends towards innovation, technology, car sharing, distributors may want to look at specialized OEMs for small orders. And likely orders with a fast...

Turnaround

Being able to fill an unique size order is just as important as being able to fill it in a timely manner. In order to respond to the needs of the marketing, a fast turnaround on a flexible fill order is an attractive feature for OEMs. Turnaround and quantity flexibility can be the ultimate equation for OEM agility, if the right processes and people are there to support.

Customer service

Customer service is not dead. As much as the automotive industry is leaning toward technological innovations, and appealing to a Millennial audience, many OEMs continue to operate through a traditional customer service model, with people and relationships at the helm of each transaction. Having a good OEM-distributor relationship can ensure that business needs are being met and good times are being had.

So is agility increasingly becoming a more important factor for OEMs and distributors to consider? Perhaps. Depending on the goals of each party. Technology and innovation, which is a focus of the automotive market, tends to be well complemented by agile processes, products, and people.

 

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