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Five Best Practices for a Successful OEM / ODM Partnership to Help Drive Revenue
Hello again! If you’re reading this post, then I’d venture to guess you’ve read Parts 1 and 2 of our Original Design Manufacturer and Original Equipment Manufacturer (ODM/OEM) blog series. I’ve thoroughly enjoyed sharing our insights on ODM/OEM service, OEM customization, private labeling and more revenue driving opportunities. We have come to the final chapter in our series. My hope would be the end of this series is the beginning of a long-lasting ODM/OEM partnership. If that sounds good to you, I suggest you read on. If you’re not sold yet, I suggest you read on.
ODM/OEM partnerships are not forged by happenstance. They are like any other relationship in that you get out of them what you invest into them. With our 20 years of experience, we have identified the following best practices to ensuring a lasting, mutually beneficial ODM/OEM relationship.
1. Trust
The foundation of every strong relationship and particularly crucial for ODM/OEM relationships is trust. Establishing a trustful environment for information and idea exchange is essential to successfully defining and executing a product for maximum impact. Trust traditionally is established contractually through mutual non-disclosure agreements (mNDA) and the like. But, the best kind of trust is built over time when both parties realize they are stronger working together than apart and when both sides can play “open cards” about their needs and work constructively as partners to making sure everyone’s needs are addressed. ODM/OEM relationships are most successful when trust is valued by both sides and fail when trust is compromised.
2. Communication
An essential driver of trust is effective communication between companies and is essential to ensure ODM/OEM product success. Engineering and Product Management teams for both companies need to work closely together without being incumbered by layers of bureaucracy that can distort the messaging and lead to misunderstandings. Misunderstandings lead to project delays, product mismatch and ultimately unravels trust. Good, bad or ugly, messages need to be clear, transparent and timely throughout to ensure a successful relationship. Effective communication translates into product launches moving as scheduled to hit defined revenue target goals.
3. Predictability
Countless psychological studies have argued that uncertainty is chief amongst carnal human fears. We have found that reducing uncertainty is particularly important in developing a lasting ODM/OEM relationship. For Phocos to be a strong ODM/OEM partner for its clients, our responsibility is to ensure the products we deliver are of world-class quality, precisely produced according to mutually defined specifications and timely to ensure a constant flow to the marketplace. For Phocos to follow-through on these responsibilities, it is essential to receive firm commitments from our partners to specified minimum order quantities (“MOQs”) and accurate/timely forecasting from our clients. Our 20 years of experience has clearly shown when all of these areas are well-defined and well-executed, both sides insert a level of predictability in their business which, in turn, reduces uncertainty and strengthens trust.
4. Patience
If the goal in any ODM/OEM partnership is to provide the perfect solution for a given application, both partners must acknowledge that often perfection takes time to achieve. Taking the time to clearly define the solution on the front end and executing all of the steps during the development process to ensure a perfect, world-class solution may seem laborious and tedious. However, the wasted time and opportunity costs incurred by a poorly conceived and executed product far outweigh any perceived benefits from proceeding at the speed of light. Furthermore, patience is important during the entirety of the relationship when one considers that, although we all tend to strive for perfection all the time, life happens. Supply chain disruptions happen. Pandemics happen. The key to success in an ODM/OEM relationship is for both parties to work together in a patient, collaborative way to overcome all of the obstacles that life presents as a team and not as a group of individuals. The experienced team at Phocos will set up a process for success to maximize our partners’ investment of time and financial resources.
5. Equity
The best ODM/OEM partnerships are true collaborative efforts to drive the long-term success for both parties. This starts at the beginning of the process when a common vision is defined for how to achieve market success and what roles each party plays to ensure the relationship endures over time. Our ODM/OEM partners view Phocos as an extension of their team providing technical leadership and Phocos views its partners as an extension of its Applications team providing valuable market insights and channel leadership. We value long-lasting, equitable relationships with our ODM/OEM partners that prioritize the mutual benefits of the partnership above all else. We see our partners’ success as progress toward achieving our corporate vision. When you partner with Phocos, you benefit from our steadfast commitment to equity in all aspects of the relationship to ensure sustainable, value-driven results.
Now that we’ve defined ODM/OEM services, provided examples of some of the possibilities and provided a summary of some of our observed best practices for successful ODM/OEM partnerships throughout this 3-part blog series, who’s ready to join our mission to make universal access to reliable energy possible Anywhere, Anytime, Any-Grid? Contact us now to discuss how we can work together!
Series:
OEM / ODM Service and Customization 101 (Part 1 of 3)
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