Densitron – Outsourcing can help companies refocus and build business agility
Pete Semerak, SVP Product, Densitron
In an uncertain world, it pays for broadcast vendors to refocus their activities on what really makes them distinctive. And one way in which they can do that is to outsource some of their design, manufacturing and integration needs to a dedicated ODM provider, says Densitron’s SVP Product, Peter Semerak.
From tough times come new opportunities, and that has certainly been true of the last few years. While no one would dispute the scale of recent challenges for manufacturing, they have also provided a chance for companies to review the way they work and have some frank internal conversations about their strengths and weaknesses. As we shall see, this tends to support the case for specialist original design manufacturer offers – such as our own recently-launched ODM+ service – that allow companies to refocus on their core activities and invest more time in planning for the future.
In many ways, broadcast could be said to represent a microcosm of the pressures to have affected manufacturing as a whole these past few years. As well as being subject to the shutdowns that were universal to all sectors, it faced a prolonged supply chain crisis focused on electronic components. We’re pretty much back to normal now, but long-lead times took their toll, not least in the capacity that companies had to allocate to finding alternative components. Inevitably, the ability – or not – to fulfil orders also had an impact on the generation of new business, not to mention new ideas.
All of which raised some burning questions about business agility – something that many companies had already been concerned about in the midst of a period of huge technological change. IP, the cloud and, increasingly, AI have massive implications for the future development and delivery of broadcast solutions. Factor in growing worries about a skills shortage in various areas of production and engineering, and you have all the necessary elements for a lot of late nights and anxious Zoom calls.
It’s against this complex background of factors that we, as a company, have been thinking about ODM services and how they can help broadcast vendors to refocus on their core activities and become more agile. For those not familiar with the term, an ODM is an original design manufacturer – a company that designs and manufactures a product that is then rebranded by another firm for sales and marketing.
For some time we have been convinced of the scope for an enhanced ODM service which includes the traditional ODM responsibilities of managing the complete product lifecycle for customers, but also provides access to Densitron’s own extensive IP, which includes groundbreaking control and display technology patents that can be incorporated into customized hardware solutions. To say the least, this is not a common occurrence in existing broadcast ODM services, which overwhelmingly focus on more straightforward outsourcing and product management functions. Hence why we have decided to call our service ODM+ as it really does add something extra!
Above all, ODM+ recognizes that the industry now requires enhanced design and build services that allow customers to be more targeted and responsive to a rapidly changing market. In addition, due to our own effective internal structure and extensive long-term planning, it acknowledges that Densitron itself has escaped many of the worst effects of the past few years. Indeed, the manner in which we have navigated the challenges confirms that our business itself is highly agile.
Robust approach to hardware R&D
There are a couple of key reasons for this positive result. First and foremost, we have been able to maintain good levels of strategic stock, with existing long lead-times on that stock mitigating the challenges that were occurring elsewhere. Secondly, it became apparent that we were in a good position because, in the broadcast market generally, more companies were switching to delivering software solutions. We therefore saw a pinch-point on the developmental side in those organizations where people were looking more to develop software. It wasn’t that they were neglecting hardware as such, but it has often not receiving the same attention as software.
So while we were able to keep our own display and control hardware production moving to schedule, we also realized that there was growing scope in the market to innovate in the hardware realm. It was at that point that the whole notion of offering a dedicated and comprehensive third-party design & build service began to formulate.
Benefiting from our own robust supply chain and production processes, Densitron ODM+ was always conceived as a service that would allow our customers to refocus their operations in a way that builds resilience and agility. At one level, it involves Densitron taking over the complete hardware product lifecycle from customers – from design to manufacturing to supply. This includes access to our well-established supply chain management processes so that all of the main concerns associated with sourcing components – including contingency solutions – can become the domain of Densitron.
But it also enables customers to take advantage of our R&D capabilities, which are founded on years of ambitious original work in developing control systems, control surfaces, displays and computing solutions. This is especially beneficial given the extent to which many companies have had to focus their R&D activities on finding solutions to supply chain problems related to existing solutions. With the freeing up of resources that is made possible by ODM+, companies have a much better chance of doing more focused R&D that really plays to their greatest strengths.
It’s also good news for an industry whose long-term prosperity is completely dependent on innovation and original solutions development.
Future production fears
Hence it appears to us that, in this period especially, opting for a comprehensive ODM service holds significant advantages. One of the reasons for this recommendation is the growing list of factors that could potentially disrupt future production. For example, few would disagree that geopolitics is now at its most uncertain since the 1990s, with any number of world events threatening to disrupt supply chains and cause further hindrance to production of semiconductors and other vital components.
Then there is the darkening macroeconomic picture. Many countries could tip into recession and, already in the red due to the pandemic, governments may only be able to offer limited assistance. Sadly, at the highly value-attuned components level, it’s likely that some businesses will hit the wall altogether.
So it makes for a real headache for the industry and one that isn’t going to go away anytime soon. In which context, it surely makes sense for individual companies to remove those areas of concern that they can confidently outsource to a third-party with a long track record of targeted hardware production and delivery.
It’s in that spirit that I would encourage any companies with hardware production concerns to get in touch and see if ODM+ can help you. We are already working with some leading names, and anticipate that this list will grow in the near future. It’s the start of what we hope will be something big and even transformative for our part of the industry.
For more information on ODM+ and other Densitron services, please visit https://www.densitron.com/design-and-build
