If you work in manufacturing, you know that your products are only as good as every component. Getting the right part at a reasonable price translates to better products, happier clients, and financial success.
This is where OEM manufacturing comes in. There are many advantages to using OEM parts, but there are also some things you can do as a client to get the most out of your relationship with the production company.
This article covers the basics of OEM manufacturing, including the advantages of their products. It also gives you some tips for maximizing your relationship with the company. It will help you ensure you are getting quality parts that allow you to meet your production demands.
What Is OEM Manufacturing?
The definition of “OEM manufacturer” is complex. In general, an “original equipment manufacturer” is a company that makes specific components that are then used in the products of another company. They work with clients to create a design and settle on manufacturing processes.
OEM companies set supply chain goals to produce the right component for the job. They also may offer add-on services, such as assembly, logistics, or warehousing.
Electronics and auto manufacturing are two of the most common industries that regularly use OEM parts. However, there are lots of different industries that rely on OEM manufacturers.
Advantages of OEM Parts
The biggest advantage of OEM parts is that, by definition, they are produced with a specific function in mind. They are made to fit and perform based on the original design of the finished product. This is why you can expect OEM parts to be the highest quality and design.
This may not be the case with aftermarket parts. These too are produced by a third party but without the original design in mind. For this reason, aftermarket parts may be sub-par in quality and function.
Aftermarket parts sales are usually directed toward consumers. OEM companies are generally business-to-business focused. That is due to the nature of the products.
The goal of an OEM is to make a component for a product before its original sale to consumers. Aftermarket parts are often produced as a cheaper replacement for a part after it has been sold, or to serve a different function than the original component.
An OEM is also distinct from an “original design manufacturer” (ODM). While OEMs make components for another end product, ODMs design and produce their own components for sale under another company’s label.
A good example of ODMs is third-party phone chargers. These tend to have a very similar design to other products on the market but are sold by distinct companies.
Getting the Most Out of OEM Manufacturing
The most important thing you can do to get the most out of an OEM manufacturing agreement is to establish a good relationship with the company. Communication is key. Having a working agreement with a manufacturer that is willing to field challenges as they arise will ensure you get the components you need on time.
This includes every step of the production process. Below are some tips to consider as you move through each phase.
Creating a Prototype
Prototyping is standard practice in OEM manufacturing. It allows you to establish a relationship with the company and lay out clear expectations about the process and the product.
This includes discussions of production timelines. If the OEM manufacturer is warehousing products for you, this is a chance to go over inventory management practices and standards.
Finally, the prototyping phase is the time to cover documentation. This includes conversations about how you will handle the exchange of files, blueprints, invoices, and other important documents.
Be sure to sign a non-disclosure agreement. This will grant the manufacturer permission to receive the product design necessary to produce the prototype while ensuring protection and privacy.
If both parties are completely satisfied with the prototyping phase, they will continue with pre-production. This step involves honing production processes to make a component that is ready to go to market.
Pre-production is an opportunity to take what was learned during prototyping and apply it to the production processes. This will improve efficiencies and end product quality.
Production begins when the OEM has finalized all adjustments from pre-production. Before actual production begins, the OEM manufacturer may ask you to sign a “manufacturing services agreement” (MSA). This solidifies all the expectations from each party.
The MSA is an important step for the manufacturer. It allows them to move forward to supply chain arrangements and set up inventory management. It also allows them to budget and put a production schedule in place.
Be sure you are comfortable with everything laid out in the agreement. This includes any applicable warranty information and production details. It also should specify steps for making changes during certain phases of post-production.
Once production begins, it may feel that things are “on autopilot.” This may be the case, and regular communication may slow a bit, but the manufacturing relationship does not end.
During post-production, be sure to schedule regular meetings for updates and adjustments. Spelling out this schedule in the MSA is even better.
As with any type of sales business, production needs may change. A reputable OEM manufacturer will want to help you meet all your demands, even amidst unforeseen circumstances.
Being upfront about changing needs or production specifics is the best course of action. It will allow you and the manufacturer to iron a plan together that is beneficial to both companies.
Find OEM Manufacturing Services
Now that you understand the basics of the OEM manufacturing processes, you get the most out of your agreement. Remember that the most important thing is to establish clear communication with the company. This will ensure that everyone is on the same page throughout all planning and production phases.
Shield Works Precision Manufacturing provides customized OEM production, assembly, and warehousing solutions to an international client base. We pride ourselves on maintaining the highest standards of customer service and product management. Reach out to us today to learn more about services or to get a customized quote today.