The Ultimate Guide to Original Equipment Manufacturing (OEM)

If you work in an industry that deals with physical devices, you understand how each part needs to function properly for the product to be a success. The average vehicle, for instance, has about 30,000 parts, and each one is important for the car to work. That is why knowing how each component is produced is vital to the overall quality of the machine. If you are unfamiliar with original equipment manufacturing (OEM) and its many benefits, keep reading.

The information below will explain the distinctions between OEMs and their alternatives. It will give you a sense of how your business will profit from these components and why you should find reputable manufacturers to work with.

What Is OEM Manufacturing?

Original equipment manufacturing (OEM) refers to the production and sale of products directly to customers. This means that the components of a product are manufactured for that machine and its uses. The automotive and electronics industries are some common industries where you will find OEM parts.

There is a distinction between OEMs and ODMs, which are original design manufacturers. ODMs created the design and specifications of a product. OEMs, by comparison, do not have to be the original designers but must be licensed to produce them using the original specifications.

OEM Alternatives

Aftermarket manufacturers make parts that are meant to look and function like OEM parts. They are often cheaper, although there are some deficits, including diminished quality, that come with the lower price tag.

There are exceptions to this. Some aftermarket parts can enhance performance. These are most common in the automotive industry. A good example is custom vehicle floor mats or upgraded stereo equipment.

It is worth noting that these are more the exception than the rule. And, even with these products, it is difficult to be certain of the heightened quality and performance.

There is a third option: value-added resellers (VAR). These are businesses that use OEM parts but incorporate different features and functions.

VARs and OEM parts manufacturers have a mutually beneficial relationship. VARs help sell OEM parts, and OEM manufacturers supply the parts for upgrade.

OEM Manufacturing Benefits

There are many advantages to purchasing OEM parts. Here are a few major ones to consider.

Better Quality

OEM companies work directly with customers. This means they are better situated to produce a product that performs the way you need it to. OEM manufacturers are much more likely to be able to customize parts for you.

OEM manufacturers make parts for their intended uses. So, you can expect them to function better and last longer than aftermarket ones. For this reason, you will find more comprehensive warranties with OEM parts.

OEMs will have higher quality standards than aftermarket companies. That is because they know that cheaper alternatives are available.

Since OEM companies are not trying to “fill a gap,” they are always improving the quality of their products. This means that the parts you buy from them tomorrow will be better than the ones they made today. This evolution in quality is not always present in aftermarket companies.

Competitive Cost

While aftermarket parts are often touted as cheaper alternatives, many OEM manufacturers can provide better pricing, especially with bulk orders. That is due to economy-of-scale production that is not achievable by aftermarket companies.

While aftermarket parts can be cheaper, you may be “rolling the dice” when it comes to value. With OEM parts, you can be more assured that you are getting what you pay for.

Also, the longer lifespan of OEM parts can more than offset any cost savings from cheaper parts that break down more often. Depending on your industry, this also can translate to thousands of dollars in savings due to avoided downtime.

You may find higher installation costs associated with aftermarket parts as well. Since they are not made to original specifications, there is no guarantee that you can incorporate them with the same ease as OEM parts.

Quicker Production

Faster turn-around is one of the biggest advantages of using OEM. That is because you are buying directly from the manufacturer and cutting out the “middle man.” An aftermarket company will take longer to identify the part and ensure they have it in stock.

OEM companies are more likely to have older parts as well. It is common for OEMs to have a more expansive storage capacity than smaller manufacturers.

Aftermarket companies often produce components to fill a need for a limited time. But OEM manufacturers are better situated to retain designs and production methods for older products. This can be a huge advantage if you need specific components that are otherwise no longer available.

Better Support Services

You can expect OEM companies to provide superior engineering and technical support. They will have unique knowledge about their products. That is because they are involved in everything from design to production and testing.

OEM companies can only exist if they are meeting the needs of their clients. They understand that alternatives are available and will do everything in their power to provide a quality product that works as intended.

Establishing a relationship with an OEM company will guarantee that, should products not meet your expectations, they will do everything they can to make it right. This can afford peace of mind that is not achievable with alternative product manufacturers.

Find Original Equipment Manufacturing Parts for Your Business

Now that you have an idea of what original equipment manufacturing entails and what the benefits are, you can decide on products that meet your manufacturing needs. Be sure to find a reputable manufacturer that can meet your product demands and offer superior support and customer service.

Shield Works provides customized OEM manufacturing, assembly, and warehousing solutions to clients around the world. We pride ourselves on open communication and services so that you will receive prompt communications and short lead times for product customization. Reach out today to learn more about our products and services.