Supplier Web Platform Credit System for OEM-End User Relationships
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Solution Overview
Problem
The inefficiency in the business relationship between suppliers, original equipment manufacturers (OEMs), and end users, where OEMs act as middlemen for replacement parts and materials, leading to increased costs for end users and loss of benefits for OEMs, as end users often bypass OEMs to directly purchase from suppliers, disrupting the original sales relationship.
Innovation Solution
A system and method where a supplier provides a web site for OEMs and end users to purchase subsystems and consumable parts, crediting OEM accounts with online credits for sales, generating enhanced credits for repeat purchases, and allowing redemption for future subsystem purchases, thereby establishing mutually beneficial incentives.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If end users go directly to the supplier for replacement parts and materials, then the end user can obtain parts more efficiently and at lower cost, but the OEM loses credit and benefit for establishing the original relationship between the supplier and end user
Solution Approach 1:
The system implements a feedback mechanism where the supplier tracks and rewards OEMs for generating end user business. When end users purchase parts directly from the supplier, the system automatically credits the OEM's account with online credits, creating a positive feedback loop that incentivizes OEMs to maintain their relationship-building role while allowing efficient direct purchasing.
Solution Approach 2:
The online credit system acts as an intermediary mechanism that transfers value from supplier to OEM based on end user purchasing behavior. This intermediary structure allows the end user to purchase directly from the supplier while simultaneously compensating the OEM for the relationship value they provided, resolving the conflict between direct access efficiency and OEM benefit preservation.
2Ease of operation
If OEM acts as middleman between end user and supplier for replacement parts, then the OEM maintains control over the relationship, but the end user incurs increased costs and the process becomes inefficient
Solution Approach 1:
The system extracts the transactional function from the OEM's role while preserving their relationship-management function. End users can directly access the supplier's online store for parts procurement, removing the inefficient middleman step in the transaction process, while the credit system ensures the OEM still receives value for maintaining the customer relationship.
Solution Approach 2:
The system enables end users to self-serve by directly accessing the supplier's online platform for purchasing replacement parts and materials. This self-service capability eliminates the need for OEM intermediation in the actual purchasing process, improving efficiency while the automated credit allocation ensures OEMs are compensated for their role in generating the business.
3Stability of the object's composition
If OEM acts as middleman for replacement parts requests, then the existing relationship structure is maintained, but costs are driven up for the end user
Solution Approach 1:
The online credit system serves as an intermediary mechanism that preserves the OEM's role in the relationship structure while eliminating the cost inefficiency. The system automatically calculates and allocates credits to OEMs based on end user purchasing patterns, ensuring they receive appropriate compensation without requiring them to act as transactional middlemen that drive up costs.
Solution Approach 2:
The system changes the parameter of value transfer from direct product sales to automated credit allocation. Instead of the OEM profiting from markups on parts sales (which increases end user costs), the system transforms the value transfer mechanism to automatically credit OEMs based on verified end user purchasing data, maintaining relationship stability while eliminating harmful cost inflation.
Data Source
AI summary
Systems and methods to accommodate business relationships between a supplier, an original equipment manufacturer (OEM), and an end user. A supplier provides a server having a web site that is accessible by OEM's and end users to purchase subsystems and consumable parts and materials. The OEM's and end users are associated with each other by the server in accordance with established business relationships. The server manages accounts of the OEM's and associated end users to reward on-line credits to the OEM's and the end users when the OEM's and the end users make purchases from the supplier. The rewarding of on-line credits are structured to generate additional business for the supplier from the OEM's and the associated end users.