Manufacturers are Transforming from OEM Service, Introducing Digital Services to Brand Management.

Service transformation

In the early days, family OEMs and factory OEMs were everywhere, but nowadays, if you want to rely on OEMs to make profits, you are already facing low-profit margins. Facing global competition, Taiwan's manufacturing industry is currently struggling to transform and develop towards a high value-added operation model. While observing the transformation model of the manufacturing industry, some OEM / ODM operators have gradually moved towards brand thinking and have begun to build the ability to use data analysis techniques to capture business opportunities.

The thinking of brand and service brings higher value to the manufacturing industry. Take Taiwan as an example. In recent years, Taiwan’s manufacturing industry has gradually evolved from simple back-end manufacturing in the past to an integrated front-end distribution channel and manufacturing service-oriented to customer needs. Business model. For this reason, the trend of the manufacturing industry toward information-based services will become more and more obvious. For example, manufacturers will begin to collect information from end-users, analyze and explore the needs of end-users, and then develop products or services that users need.

The transformation of Taiwan's current manufacturers can be roughly divided into two modes. One is the long-term focus on OEM/ODM-based foundry manufacturers. Unlike the past when designing and manufacturing for customers, what customers want to provide, but to help customers think about feasible solutions and divisions early. Advice on how to implement further planning. The other is to use data analysis to create new business models in the B2B market. Through data collection and analysis, we can further understand market feedback and adjust future business models and marketing strategies.

Close to the consumer market

To meet the needs of customers, it has driven the manufacturing industry to use digital systems to establish channels for interaction with customers. Take the current situation of the textile industry as an example. In recent years, the consumer market has sought innovation and change. Global brand channels are now promoting short delivery times and many customizations. The textile industry is facing a deeper sense of production shock, and the order delivery time has been compressed to less than 30 days. The front-end industry and the client’s design proofing timeline are compressed. The textile industry is also beginning to accumulate the communication process and digital information with customers through the digital system. In addition to avoiding duplication of resources and heavy work, it can also shorten the process that took several months. Give more competitive delivery.

Besides, it not only reduces the complicated production cycle but also relies on the accumulation and analysis of the digital system database. The textile industry can quickly grasp the changes in the consumer market through the investment business analysis system. On the business side, it can quickly grasp the sales situation and distribution of the client in the market, or observe the current consumer's hobby of styles, and even predict the future market trend earlier than the client. In addition to designing in line with customer needs, it can also take the initiative to provide brand customers with new style designs and have better bargaining space.

In the past, Taiwan was good at the OEM / ODM services, but it focused on product or process technology development. It had a low grasp of end customers. Although it had high-quality production technology, it had a low grasp of market dynamics and missed more hidden markets. Business. Nowadays, customers and consumers dominate the consumer market, and the needs and preferences of customers are constantly changing. The market has become more mature. More and more competitors have joined the market to improve market competition. Customer service has become a differentiated strategy different from competitors. Important factor. With the maturity of the Internet of Things and sensing technologies, manufacturers have also begun to accumulate data in their products. In addition to optimizing product performance, they also optimize the user experience through continuous iterative updates. In the past, industrialists sold products, but in the future on the product side, there is quite a chance to use the rent-and-sell model for breakthrough innovation.

Data analysis creates new business models

In addition to being closer to the consumer market, successful cases of the manufacturing industry using data analysis to create new business models have also been verified in recent years in the transformation of machinery and equipment manufacturers to machinery and equipment service providers. Nowadays, Taiwanese machinery and equipment manufacturers no longer rely solely on single-machine output as their main business model but are turning to the use of industry know-how to help customers optimize the service experience of production. For example, the machinery and equipment industry accumulate machine operation and process parameters through a digital database, and then provides recommendations for optimized cutting parameters, or establishes an optimized analysis of the equipment predictive maintenance cycle. For example, the sawing machine equipment manufacturer who invested in AI to establish big data analysis in the earliest period has even taken orders from high-end market customers and developed a new business model independent of the original business scope. Market competitors widened the gap.

In the future, manufacturers in various industries will not only need to optimize production lines to introduce automated and intelligent manufacturing processes, but also need to move from low-profit manufacturing OEMs to brand management thinking and enhance OEM / ODM service more added value. And with the data from product sales to the market, we can further plan the future strategic direction to respond to the ever-changing market demand.