Building Successful OEM/CM Relationships

Jeff Johnson, Vice President of Sales & Marketing

Posted on July 18th, 2018

How competitive is the CM space and what can a CM do to differentiate itself?
OEMs have many CM options ranging from small “job shops” that play a manufacturing support role to full service CMs which provide finished level assembly including testing and post manufacturing support. CMs can best differentiate themselves by not being generalists and trying to be all things to all end markets. By focusing on a specific end market or product type, CMs optimize their investments and supply chain leverage thereby maximizing their value in a crowded space.

When it comes to choosing a CM, who within an OEM is typically the decision maker?
Most OEMs form a cross functional team when selecting a CM – it’s a critical decision on their part with long term implications. VP of Operations or VP of Product Development often leads this team with strong inputs taken from supply chain and quality groups.

In your experience, what are OEMs most concerned about when selecting a CM and how does Paramit address those concerns?
Reliability is a top concern for medical device OEMs, and Paramit’s vPoke technology results in zero manufacturing defects and full traceability. But at a high level, with so much riding on the relationship, trust and confidence often drive an OEM’s CM selection. Can an OEM trust what the CM is promising and does the CM provide transparency? Paramit’s management team is experienced and accessible, and the culture we’ve developed supports a trust based relationship.

Mechanical assembly

From a CM’s perspective, what is the key to building a long-term relationship with an OEM and how does Paramit support this?
Successful OEM/CM relationships require continuous communication and clarity, or as we say at Paramit, “being on Center Point”. In a multi-year relationship issues will occasionally arise that for CMs can be uncomfortable to address – we are after all in a service business, and we want to please our customers. So it takes a concerted effort and company culture to keep customers apprised of risks and trade-offs and not let issues linger until they become unresolvable.

What is the most important or insightful question a prospective customer has ever asked about Paramit’s capabilities, methodologies or culture? How did you answer it?
When customers evaluate Paramit they always ask questions about our capabilities and costing and how we manage quality – very objective questions and checklists are common. But few customers take a dive deep into our organization and culture, ask about our long term plans, or seek to understand how our needs align with their needs. Relationship based “what if” questions are the most insightful and tell our team the customer is looking for an engagement that will stand the test of time.

What can you tell us about yourself that we wouldn’t be able to learn from reading your professional bio?
I love to golf and trout fish in Sierra streams.

Jeff joined Paramit in 1999 and has 25+ years of experience with manufacturing and new product introduction, which he uses to maximize value for Paramit’s customers. Special thanks to Jeff for his time and for helping us understand how successful OEM/CM relationships are built and sustained.