Manufacturing industry

Supply chain aspects play an important role in the manufacturing industry. What is the position of the company in the overall (supply) chain, to whom does the company provide its products and who are its suppliers. An important distinction here is the difference between companies with a product function and companies with a capacity function.

  • The product function usually lies with the OEMs (Original Equipment Manufacturers / the end manufacturers) who are the legal owner of the design of the products they sell. They tend to have a dominant role when it comes to directing the chain and distributing the margin earned by the chain. On the one hand the emphasis here is on the development of new products and on the other hand on sales and distribution. The production and assembly of the products is often outsourced. Product / market combinations, life cycles of products and margin monitoring play an important role here.
  • The capacity function lies with the suppliers who make and assemble products on commission. This concerns a wide range of metal and plastic processing, mechatronics, software, etc. These companies are concerned with the available capacity of (man-) machine hours and the extent to which this capacity is used for customer orders. Occupancy rate and turnaround times play an important role in this. Depending on the logistic distance from the OEM, a company is qualified as a 1st, 2nd or 3rd line supplier. A strategically interesting development is the aim of vertical integration, whereby prior or subsequent supply chain phases are included into the company.
  • In hybrid companies that have both a product function and a capacity function, strategically interesting fields of tension arise that require clear coordination and good management.

Technological developments play an important role in the manufacturing industry. Within the primary production process, but also within the business model. It is therefore important not to let the business model age, but instead to allow it to evolve along with external developments and possibilities.

With our HARR® analysis model we assess the performance of companies by organizing their financial performance in a specific way, and by zooming in on their intercompany relationships. As a result, we can provide you with an overview of positive and/or negative developments at an early stage, which otherwise would only become visible at a later stage. 

Paul   Mencke

Paul Mencke

High-Tech, Family businesses

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