Best practices for OEMs within the first year

by Startacus Admin

Starting up as an OEM enterprise? These tips will help you lay strong and stable foundations for the years ahead...

The first year of business is full of major events. From your first contract and chosen product line to developing your branding and hiring and investing in employees across a multitude of departments. And while all these milestones are considered to be exciting, in reality, during your first year as an OEM enterprise, you’re not only laying the foundations for business success but strengthening the foundations for business survival.  

Running a successful operation means getting to grips with the best practices and hitting the ground running. OEMs can expect a rollercoaster of stress and success within their first year, so let’s explore some of the best practices to ensure your foundations are strong and stable for the years ahead.

Focus On Your Procurement

The purchasing process is often overlooked by fledgling OEMs, simply because the idea of sourcing the right component parts for their assembly line seems relatively straightforward. However, when you consider the intricate and extensive list of required components on their BOM, price comparisons, sourcing specific parts such as a visible LED semiconductor or passive filters and coordinating scheduled deliveries to coincide with your required time scales. This “simple” purchasing process suddenly got a lot more complicated.

By focusing your procurement tasks online, and using an online marketplace such as Sourcengine to source your required electronic components, you’ll be able to upload your BOM in its entirety, set search criteria to find the right price and delivery slots, and choose from over 550 million parts from over 3,000 fully vetted and industry compliant vendors. Knowing you have a range of stable and professional suppliers at your fingertips will give your OEM enterprise the competitive edge, in terms of product quality, reliability and price.

Ensure Your Equipment is Up to Standard

Are the machines on your assembly line able to meet your requirements? Machinery inevitably breaks down, which is why your chosen systems need to come with a reliable customer support package that prioritises emergency repairs and call outs. The quicker your machines are repaired and maintained, the less downtime your production line will experience.

Get Your Accounting in Order

From day one, your accounting and books should be in order. Setting up simple and accurately recorded financials today, will make financial compliance and accuracy much easier when your tax responsibilities come knocking. Reaching out to an accountant to handle your bookkeeping is recommended for OEM enterprises in their first year, however maintaining an understanding of your financial position is crucial for business growth, so stay organised and informed.

Prioritise Inventory Management

Too little inventory and you won’t be able to meet your orders, too much inventory and you’ll be wasting resources, time and racing against the clock to fight the depreciation of your surplus stock. Focus on how to move your inventory through your supply chain as quickly as possible, and take advantage of a supply chain management optimization software that will help keep you and your employees informed of your current inventory status and the associated costs.

Final Thoughts…

Starting a business from scratch is challenging, but with the right foundations, your efforts will soon be rewarded with revenue and yearly growth – propelling you into year 2.

 

 

 

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Published on: 4th July 2021