As original equipment manufacturers ramp up production to meet increased demand, there is a new problem that a recovering economy presents -- the need for OEMs to evaluate the health and capabilities of their vendors. Manufacturers that proactively work with their suppliers should be better-positioned to identify and mitigate risks.
With the economic downturn coming so hard and fast, some suppliers went to extreme measures as a means of survival, making cutbacks from both a cash and human-capital perspective that have left gaping holes in operations. These reduced capabilities and resources can pose significant risks to OEMs as they begin to reinvest in new products and reinvigorate their go-to-market strategies. These OEMs need to know if their suppliers are up to the challenge.
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