Navigating challenges and seizing opportunities with OEMs
Posted to News on 14th Feb 2024, 14:00

Navigating challenges and seizing opportunities with OEMs

In an era of relentless digital transformation across industries, OEMs bear the exciting responsibility of embedding cutting-edge technologies into their products to meet customer demands. The rewards of this digital shift are evident to end users, but the journey also holds vast potential for OEMs, leading to the creation of value-added after-sale services, as Jake Dibb, OEM business development manager at SolutionsPT, explains.

Navigating challenges and seizing opportunities with OEMs

OEMs face distinct challenges that set them apart from end users. They are entrusted with addressing unique problems, developing products that not only meet immediate customer needs but deliver sustained value throughout an assets lifecycle. Unlike end users, OEMs must maintain a relentless pace in adopting digital transformation technologies to stay at the forefront of technology adoption, all while differentiating themselves in a fiercely competitive market.

SolutionsPT is committed to turning this vision into reality, and recently embarked on an enlightening journey with an OEM Vision Day to see how it can collaborate to unlock the art of the possible. During the Vision Day, the company engaged with OEMs to gain insights into their specific challenges:

Technological advancements: Keeping pace with rapidly evolving industrial automation technology, including emerging capabilities like artificial intelligence, demands extensive research and development efforts.

Competition: A highly competitive marketplace, filled with established and emerging brands, necessitates innovation and differentiated services for OEMs to gain a competitive edge.

Customisation and flexibility: The needs of the ultimate end user are always changing, this has forced the need for customisation and flexibility onto the manufacturer, and therefore back to the OEM. This creates a new challenge for OEMs who have to develop modular products that can be adapted to different environments and integrated with existing systems, whether they are legacy assets created by themselves previously or by an entirely different OEM.

Cybersecurity: The convergence of IT and OT (Operational Technology) exposes OEMs to cybersecurity considerations. Robust security measures are essential for the protection of digitalised systems.

Skills gap: This ongoing issue is industry-wide, not just an issue for OEMs. Innovating in this space requires a skilled workforce that has expertise across various specialisms. In fact, the job role of an OEM now includes engineering, software development, data analytics, and system integration. The challenge of meeting these skills requirements will only continue to grow as an ageing workforce reaches retirement age.

Inventory management: Recent global events have proved the need for a secure supply chain and for OEMs this is perhaps even more mission-critical because without an optimal level of inventory they cant produce assets. Balancing between too much or too little inventory is a complex task that OEMs must manage effectively.

Building resilience

Despite these challenges, there is a positive outlook for OEMs. These challenges, in some form, are also impacting end users who are turning to OEMs to help resolve them. So, despite the current challenges 35% of OEMs are reporting a significant improvement on cash flow, share price and employee head count.

Recent studies show that while deployment was similar between Europe and North America, European business profitability suffered more. To understand this we need to understand how the two regions differ. Through research, we can see that North American OEMs often have a less complex portfolio, opting to concentrate on higher margin products as well as adjusting prices to reflect increased cost of supply.

European OEMs are often working with complex and bespoke products that require a high time and skill investment. Another differentiating factor is that North American OEMs are deriving a higher share of their revenues from services which makes a big impact on overall margin, these after sales services is what will separate OEMs in the crowded market and ensure value long after the product has been delivered.

OEM and End User Opportunities

In some cases, end users arent interested in machine data as long as production can continue, but that doesnt mean that data isnt useful for OEMs. OEMs can collate and analyse overall equipment effectiveness, condition monitoring, runtimes, and other relevant data. This will give a clear insight into how the machine is running in operation and provide in-situ information that will aid in the development of future machines.

While this is all positive for the OEM, how does it relate to increasing revenue? OEMs can use this data to create service packages for the end user. This can result in providing the end user with improved uptime and availability, better reliability, more effective monitoring of alarms and events, and preventative maintenance opportunities.

Working closely with SolutionsPT also enables remote license management, essentially removing that worry from the end user and ensuring the OEMs position as a member of the ecosystem rather than an expert brought in specifically for at point of sale or installation.

The digitally transformed OEM that utilises post-sales services supports the end user to achieve higher production yields, higher quality products, and often most importantly, increased profits. Such advantages pave the way for more reliable income streams and more opportunities for new business in a competitive marketplace.

In this brief exploration of OEM challenges and the potential of digitalisation, weve only scratched the surface. The digitally transformed OEM, armed with data and post-sales services, supports end users in achieving higher productivity, product quality, and profitability. SolutionsPT is ready to join your ecosystem and enable these post-sales services.

SolutionsPT Ltd

Unit 1, Oakfield Road
Cheadle Royal Business Park

+44 (0)161 495 4600

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