Who Are Partstat Solutions For? Part 1: OEMs

One of the common questions we receive at Partstat is who exactly are our Inventory Ownership Solutions designed for. Who is poised to take advantage of the benefits they offer, and are there any entities who are excluded from considering the service? This series of articles will try to clarify this question and highlight how Partstat Inventory Ownership Solutions can benefit organizations at various points in the supply chain.

First, we would like to highlight original equipment manufacturers:

Original Equipment Manufacturers (OEMs)

It is no secret that the 2021 supply chain shortage has significantly hindered OEMs’ ability to meet soaring demand around the world. This is particularly true in industries such as the automotive industry, which by some estimates, could cost the industry $110 billion this year alone. And this says nothing about the concerns regarding inflation, which combined with shortages, has raised component costs anywhere from 15% to 40%.

In this environment, an Inventory Ownership Solution through Partstat allows these manufacturers the ability to get ahead of these looming risks as much as possible. In the early stages of product design and development, this solution allows a manufacturer to initiate a last time buy for all the inventory they will need for the product’s lifecycle — direct from the component manufacturer. All of this is done using Partstat’s own capital, so nothing comes out of pocket from the OEM, and it is then stored in Partstat’s own secure, climate-controlled facilities in Winter Springs, Florida. Since the inception of the solution, Partstat has stored inventory for some of the largest names in manufacturing for well over ten years.

Benefits

Our solution’s unique ability to preserve working capital for our customers opens up a variety of benefits. First, this significantly opens up organizational cash flow that can then be put toward initiatives with significantly greater short term ROI. This can include hiring new talent (or rehiring as the COVID-19 pandemic resides and business continues to recover), investing in new technologies and infrastructure, and even entering new markets.

Additionally, this strategy eliminates the risk of inflation. Not only are manufacturers receiving inventory at current prices, but putting in large single orders also opens up the possibility of receiving significant bulk purchase discounts from the manufacturer.

Arguably most important, however, an Inventory Ownership Solution represents a guaranteed hedge against all known forms of modern supply chain risk. Extended lead times or unexpected product obsolescence issues are no longer a concern, costly redesigns or product discontinuations will not be necessary, and all inventory will be shipped directly from Partstat’s facilities on a customized delivery schedule when you need it, where you need it. Also, by utilizing Parstat’s storage facilities, OEM customers have been proven to save an average of 42% in annual inventory carrying costs.

For more information on the many benefits Inventory Ownership Solutions have in store for OEM customers, have a look at our information page here. In Part 2 of this series, we will discuss how EMS providers can also benefit.