About Siebel High Tech and Industrial Manufacturing

Oracle's Siebel High Tech and Industrial Manufacturing can be used to help component manufacturers sell products in the channel and to end customers, as well as to manage Market Development Funds (MDFs).

When Siebel High Tech and Industrial Manufacturing is used to sell components to manufacturers, the companies involved in the sale are the:

Component supplier. This company manufactures components that are used in the production of final or assembled products. For example, it might manufacture semiconductor chips, specialized light bulbs used in automobiles, or ball bearings.
Original equipment manufacturer (OEM). This company manufactures the final products that use the components. For example, it might manufacture computers or automobiles.
Distributor. This company sells the component supplier's products to the OEM. For example, it might sell semiconductor chips to computer manufacturers or specialized light bulbs to automobile manufacturers.

Component suppliers generally have their own sales force, which sells directly to OEMs and concentrates on strategic accounts. Component suppliers usually use distributors for sales to smaller accounts.

When Siebel High Tech and Industrial Manufacturing is used to manage MDFs, the companies involved are the:

Brand owner. The company owning the brand.
Partner reseller. A company that sells a brand owner's products to end customers.

Overview of Design Registration and Win

Selling components to OEMs requires a substantial amount of design work by the OEM, and the sales cycle for the distributor is long and requires significant investments of resources.

To protect themselves from competition during this long design period, distributors use Siebel High Tech and Industrial Manufacturing to register designs. If the registration is approved, the distributor typically receives financial incentives from the manufacturer, such as special off-book pricing. Distributors without registration do not get those incentives, so it is unlikely that they would invest their resources in this project.

If the distributor or salesperson successfully convinces the OEM to use this component in this product, then the distributor or salesperson uses Siebel High Tech and Industrial Manufacturing to change the status to design win.

The goal is to give the distributor an incentive to spend time with the OEM, designing the supplier's component into the OEM's product. After the distributor owning the registration gets the design win, the manufacturer will typically grant them additional margins through a special pricing authorization (SPA). Competing distributors will not have the same cost base as the distributor owning the registration, so they cannot offer the same price to the OEM.

For more information about design registration and win, see Chapter 4, "Design Registration, Opportunity Management, and Design Win."

Overview of Special Pricing Authorization

In some cases, a distributor may need to apply for a special price below the usual book price for a component, in order to protect its margin.

Special pricing authorization is generally used in the high tech and industrial manufacturing industries. Siebel Partner Relationship Management (PRM) supports special pricing authorization as follows:

The distributor negotiates with an OEM who is willing to offer a certain price.
That price would reduce the distributor's margin below its typical level.
The distributor applies for a lower book price to restore expected margin.
The component supplier decides whether to approve the special price.
If the special price is approved, the distributor ships components and then claims the difference between book price and authorized price.
The supplier approves the claim and pays the distributor the difference between the book price and the special price.

For more information about special pricing authorization, see Siebel Partner Relationship Management Administration Guide

Overview of Market Development Fund Management

MDF Management allows companies and manufacturers to:

Set up co-op or MDF incentive programs.
Identify participating partners and automate creation of partner program accounts.
Manage the fund request pre-approval process.
Manage claims against pre-approved fund requests.

For more information about MDFs, see Siebel Partner Relationship Management Administration Guide. The sections about the advanced MDF option is most relevant to the high tech and industrial manufacturing industries.