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How to Overcome the Top 5 Manufacturing Challenges for OEMs


Despite several years of sluggish growth and the onset of a global pandemic, the manufacturing industry is not going anywhere anytime soon. Thanks to technological innovations and resiliency, the manufacturing industry is actually expected to grow by up to 7.2% by the end of 2021. While this growth is optimistic for the future of the industry, there are still some serious challenges facing Home Appliance and Consumer Electronics Original Equipment Manufacturers (OEM). 

In this blog post, we will talk about the top 5 challenges that are currently holding back these OEM manufacturers, and provide actionable advice to overcome these pervasive difficulties. By tackling these various challenges head-on, OEMs can differentiate their brands from their competitors’ brands, improve Net Promoter Scores (NPS), and solidify their stronghold in this highly concentrated and competitive market. 

Top 5 Manufacturing Challenges & Their Solutions


1. Labor Shortage

The Challenge:

The manufacturing industry has been suffering from a labor shortage over the last several years. This decline in skilled workers is related to three main factors: 1) the “graying” of the workforce, 2) a shrinking labor pool, and 3) a lack of interest in a field service career. According to the Manufacturing Institute and Deloitte Consulting LLP, 22% of the workers in manufacturing now will be retiring in the next ten years. That is about 2.5 million workers retiring, which will leave a 2-million worker shortage in the manufacturing industry by 2025. This skilled labor shortage poses a major challenge to the manufacturing industry, with Home Appliance and Consumer Electronics OEMs citing their inability to hire or retain employees as a key challenge to operational expansion.

The Solution:

There are numerous ways to approach this significant industry challenge, ranging from recruiting, onboarding, employee retention, and transforming workforce structure. OEMs interested in increasing skilled workers in the industry can help establish quality training programs that get rookie workers up to speed with best practices and requirements. Likewise, manufacturers can leverage creative recruiting strategies to attract skilled workers, employ informative onboarding programs, and focus on retention. While all of these can help, the most influential and lasting solution is to start leveraging a blended workforce model. By utilizing both employed and contracted workers, manufacturers can access a wide pool of qualified candidates ready to work. However, make sure to leverage a field service management software that is purpose built for a blended workforce

2. Inventory Management

The Challenge:

Home Appliance and Consumer Electronic OEMs often struggle to measure, forecast, and maintain the right inventory levels. This is typically because they are utilizing manual inventory management processes that are time-consuming and inefficient. Manual inventory processes are also prone to errors that can result in serious issues such as inaccurate inventory numbers, shortages, overstock, and unidentified damages. Not to mention, communicating this information in a timely manner to all of the necessary parties presents additional opportunities for costly communication errors. Without an accurate inventory management system, manufacturers are unable to optimize operational efficiency, and ultimately lose out on revenue. 

The Solution:

The best way to approach inventory management in the modern manufacturing industry is to embrace automation. By investing in comprehensive inventory management software, manufacturers can automate numerous inventory management processes and optimize overall efficiency. For instance, inventory management software enables routine inventory audits to quickly identify any possible discrepancies between inventory reports and the actual number of products stocked. In addition, by sending real-time alerts to inventory managers when inventory levels dip below a predetermined threshold, or when an inventory approaches a specific timeframe, manufacturers are able to reorder the right inventory at exactly the right time. This helps improve operational efficiency, encourage productivity, and increase revenue.

3. Scaling Business Operations

The Challenge:

Manufacturers notoriously struggle with knowing when to scale operations and by how much. Scaling operations up too soon or too late can send a negative ripple effect through business operations, most notably impacting financial performance. For instance, over-scaling operations at the wrong time with too many products can result in dead stock, unsold items cluttering your warehouse for a long time. Moreover, dead stock can cost manufacturers as much as 11% of their revenue. However, scaling operations is critical for growth in this competitive market, so manufacturers need to figure out how to strategically scale operations as accurately as possible.

The Solution:

Leveraging data-driven decision making is essential to accurately scaling manufacturing operations. This means thoroughly measuring product performance through product life-cycle management, as well as calculating investment value, shelf life, and turnover to identify surplus inventory and see the profit margin of specific products. Most notably, intelligent field service management software can facilitate digital inventory management and provide dynamic reporting dashboards with actionable insights. This helps manufacturers scale operations, optimize inventory levels, improve profitability on products, and better determine appropriate prices.

4. Maximizing ROI

The Challenge:

As with any industry, maximizing ROI within the manufacturing industry is both a main priority and a main challenge. There are numerous factors that prevent manufacturers from being able to maximize ROI, with inefficient operational processes at the core of them all. By utilizing inefficient operational processes such as paper records, manual machinery checks, expedited shipping services, hand-written inventory audits, and manual scheduling, organizations are wasting time and money that ultimately decreases profitability. 

The Solution:

Optimizing efficiency of operational processes is the most critical component of maximizing ROI. By leveraging intelligent field service management software, Home Appliance and Consumer Electronics OEMs can strategically streamline employee and technician onboarding, inventory management, warranty claims processing, scheduling, dispatching, and reporting. With optimized efficiency across all of these operations, manufacturers can reduce production costs, labor costs, prevent fraud, and improve ROI. In fact, Gartner recognized ServicePower’s visionary field service management software for its ability to improve time to achieve ROI

5. Keeping Up with New Technologies

The Challenge:

Staying competitive in the manufacturing industry requires OEMs to keep up with the new technologies on the market. This also means choosing the right solutions to invest in, and avoiding passing fads. Not to mention, selecting the right solution that can effectively integrate into their existing software stack. Without this technological synergy, companies are no better off than without a solution at all. However, with the right technology and integrations, manufacturers can drastically improve their brand differentiation, competitive advantage, customer experience, and profitability. 

The Solution:

By actively embracing the digital transformation, OEMs can stay viable and competitive in the market. This means staying abreast of new industry technologies and trends, and not letting a fear of change prohibit them from learning and adopting new techniques and methodologies for optimizing operational processes. By conducting a competitive audit, they can learn how other companies are handling or not handling the introduction of these technologies, and see if there is an opportunity to copy their strategies. In addition, it can be beneficial to survey employees and contractors about their day-to-day pain points, as this helps to identify what features to look for and ultimately build alignment between the software’s capabilities and the company’s needs. By keeping in mind the existing software stack and company budget, OEMs are better able to invest in a solution that will provide the most value at the least cost. Lastly, trying out the software is a pivotal part of the process. By requesting a demo and trying out the User Interface in real-time, the “fit” of the new technology will be apparent. 


Home Appliance and Consumer Electronics OEMs are currently facing several challenges that are holding them back. The top 5 of these challenges are as follows:

  • Skilled Labor Shortage
  • Inventory Management
  • Scaling Business Operations
  • Maximizing ROI
  • Keeping up with New Technologies

By investing in intelligent field service management software, manufacturers will be able to overcome these challenges, establishing brand differentiation, increasing operational efficiency, improving profitability, and advancing innovation. 

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