In 2018, the global Contract Manufacturing Organisation (CMO) was valued at $92.42 billion. Business is booming, and more companies than ever are now using contract manufacturing.
So, what is it, and is it right for you?
Let’s find out.
What Is Contract Manufacturing?
Businesses that use contract manufacturing hire other companies to produce their products for them. This provides smaller businesses with a significant advantage.
They can sell their products on a large scale without needing the assets required to run a large warehouse or factory.
It’s the dream of any entrepreneur or business owner: Your product will be manufactured swiftly and sold in vast quantities by a contract manufacturer.
This process can save time and money, all while increasing the reach of your business. A contract manufacturer can be based anywhere, but China and the U.S provide some of the most popular services.
The Benefits of Contract Manufacturing
Businesses of all shapes and sizes can benefit from contract manufacturing. Here are just a few of the ways it can help you:
The Hiring of Service or Labor
With contract manufacturing, it’s also possible to subcontract labor. For example, if you’re a smaller company, you might not have enough employees to make your production process run smoothly.
In these cases, you can outsource. This method is popular with many large-scale manufacturers, especially as you’ll be able to select manufacturers who are experts in your specific field.
You Gain an Operational Advantage
If the demand for a specific product is high, and a contract manufacturer can provide the capacity to meet this demand, you’ll generate more profit.
In some cases, you’ll also be able to work with contract manufacturers if you’re looking to pilot a new product. They’ll be able to test the market for you before you launch into large-scale manufacturing, saving you time and resources.
This is one of the most significant benefits of contract manufacturing. They’ll have the resources, time, and manpower to adapt to the specific needs of your product.
This means it can often get to the market quicker than you can achieve by working in-house.
You’ll also find that many suppliers offer a range of services. These can include warehousing and 3PL services, quality inspection and testing, manufacturing, order consolidation, assembly, IP servicing, and more.
If you outsource and select the appropriate supplier, the expansion opportunities are vast. Your customers will also be satisfied with more resources.
CM’s can provide high-quality testing and assembly, so your products are guaranteed to be safe and fully functional.
You Can Enter Different Markets
As a merchant, it can sometimes be hard to trade and perform business in other countries.
When you outsource and provide contracts to manufacturers in different countries, you’ll find it much easier to sell your products outside your national market.
It can also be cheaper to enter other markets through contract manufacturing, so you’ll give yourself the best chance to generate more profit.
You Can Dedicate More Time to Selling
Marketing is an important business. Suppose you can’t target potential consumers effectively. In that case, the quality of your products won’t matter because you won’t be reaping the rewards.
If you use contract marketing, you’ll be allowing other people to handle the practical side of your business while you focus on selling. As a result, you’ll be able to strike a better balance and give yourself a fighting chance in the market.
High-Quality and Low-Cost
Your products will be safe in the hands of professionals who can use their expertise to maximize the quality of your products. Many contract manufacturers are experts in production activities.
They can often perform this work to a higher standard than most businesses who choose not to outsource.
What Are the Disadvantages?
The benefits of contract manufacturing are substantial, but the process doesn’t come without its disadvantages. These can include the following:
Lack of Control
You’ll lose control over your production activities. If you have solid and existing production skills, you might choose not to outsource. If you’d prefer to hand-pick your employees yourself, this may also be a problem.
Although you’ll be able to select the manufacturer yourself, you won’t be able to choose individually or approve the people who manage your products. Your CM will take care of this for you.
Potential Delivery Delays
Contract manufacturers work on a colossal scale. Sometimes, due to a heavy workload, they may not produce products on time, and your customers could experience some delays.
Potential Outsourcing Problems
If you choose to outsource abroad, you could be interacting with people who speak different languages and live in different time zones. If you’re impatient, communication could become stressful for all parties involved. Make sure you’re happy with who you’re outsourcing to.
What channels will you use to communicate? Are you happy to speak with manufacturers in different time zones, even if it’s not during your business hours? These are all critical questions to consider.
Are You Ready to Get Started With Contract Manufacturing?
We hope that having read this blog post you now have a clearer idea of why you need contract manufacturing.
If you’re looking to hire a labor force, access better equipment and facilities, and/or have goods built, contract manufacturing could be a perfect solution.
You’ll also be able to negate start-up costs, improve product quality, concentrate on your brand and keep up with seasonal demand.
Contract manufacturers like Shield Works offer companies an array of different services and high levels of expertise. So if you’re looking for a reliable manufacturer and want to move your production to China, contact Shield Works today for more information.
It’s no secret that outsourcing your manufacturing obligations can save you plenty of time and money. In fact, China is one of the most popular destinations to do so.
But, not every entrepreneur knows everything they should about contract manufacturing in China. So, we’ve put together a guide with all the details you should keep in mind.
Let’s get started.
1. You Need to Find a Reliable Supplier
As you might guess, you’ll need to find a reputable supplier before you can move forward with your manufacturing obligations. Although this responsibility can seem overwhelming at first, is not as difficult as you might anticipate.
In general, you’ll want to consider the following factors before you make your decision:
- The size of the factory
- The location
- Total production capacity
To elaborate on this last point, you should decide whether or not you want your supplier to exclusively manufacture for your business during the production process. Once you’ve figured out the necessary criteria, you can begin your search.
Keep in mind that either you or a dedicated professional must visit the actual facility before production begins. This is to ensure that the facility meets all your needs and that you aren’t being misled.
2. You Must Register Your IP
Unfortunately, many entrepreneurs are unaware of the fact that they need to register their intellectual property in China. This means that you should pursue any necessary patents, trademarks, or copyrights.
Foregoing this obligation can easily become a significant obstacle for your production process if another entity in China decides to register your IP under their name.
Not only will this prevent you from manufacturing a product, but you could also run into legal issues for infringing upon their copyright. Due to the murkiness of international law, it can be highly difficult to prove that you were the original creator and owner of a particular IP.
Even after you have registered your IP in China and found a reputable manufacturer, there is one extra step you need to take.
You must have your manufacturer sign a nondisclosure, non-use, non-circumvention (NNN) agreement in order to further protect your rights. Anyone who attempts to avoid this obligation is someone that you should never work with.
3. Prioritize Quality Control
Ideally, you would be able to provide your manufacturer with the necessary information and then receive a high-quality product. But, this isn’t always how things turn out.
It’s not uncommon for you to encounter quality issues while outsourcing your production overseas. Fortunately, though, this is often a result of misdirection that can be resolved through communication.
The best way to accomplish this is to have a third party regularly conduct QC checks during the production process. This will allow you to catch issues as quickly as possible and then take steps to remedy them.
Failure to do so could easily result in dissatisfied customers, delayed deadlines, etc. Put simply, brushing off your quality control obligation comes with a strong risk of hurting your brand’s image.
4. Preserve Approved Samples
It’s not abnormal for different batches of products to have inconsistencies between them. To elaborate, the first few rounds of Chinese contract manufacturing may meet your standards while subsequent batches may fall short.
To help keep everything on track, it’s essential that you preserve copies of approved samples. This will give your manufacturer a solid reference that they can strive to duplicate in the future.
Additionally, you can use an approved sample as an index of whether or not a current batch meets your standards. If it doesn’t, your manufacturer is obligated to make changes.
But, these can take a significant amount of time to complete. This also means your manufacturer may not be able to adhere to your time constraints.
So, it’s in your best interest to have multiple high-quality samples that your manufacturer can use in order to streamline the production process. In the event that your standards change, you should obtain new samples as quickly as possible.
5. Establish an Original Equipment Manufacturer (OEM) Agreement
For those who are unfamiliar with this type of document, this is an agreement between you and your manufacturer that aims to remove any form of ambiguity in your relationship.
This means that you need to elaborate upon any minute details that could cause complications in the future. In practice, you’ll find yourself having to clearly define the color you want your product to be, the projected timeline, etc.
In fact, colors are defined by Pantone number as opposed to terms like ‘red’ or ‘blue.’
Other factors to consider include:
- Ownership of tooling
- Dispute resolution
- Payment terms
- Quality requirements
The same can be said about product weights and dimensions. In addition to all of this, you’ll need to ensure that this agreement is enforceable in China and not just the United States.
This often means working with a Chinese legal professional to help you navigate the nuances of Chinese law. Additionally, it’s required that you write the document in Chinese.
Otherwise, your manufacturer could break all of your guidelines and suffer no consequences.
Contract Manufacturing In China Can Be Game-Changing
So, it’s essential that you keep the above information in mind. From here, you’ll understand everything you should about contract manufacturing and can then make the most of this opportunity.
Want to learn more about what we have to offer? Feel free to reach out to us today and see how we can help.
Are your manufacturing costs running your business into the ground? Are you looking for a better way to have your goods produced? If so, you should consider turning to Chinese manufacturing.
There are several benefits of choosing a foreign manufacturer. To help you determine whether it’s the right decision for you, we’re going to discuss those benefits below.
The most obvious benefit of Chinese manufacturing is lower costs. Costs are lower in China for a variety of reasons.
For one, there are fewer regulations on Chinese businesses. As such, they have much lower overhead costs. This enables them to produce an item at a lower price, thus allowing them to pass a lower price on to the customer.
There’s also the fact that labor costs in China are substantially lower than in the United States. Workers don’t need to be paid as much, thus lowering the overall cost of manufacturing. Again, these savings are passed on to the consumer.
If you want high-quality products at a very reasonable price, having your products made in China is the ideal option. You’ll save tons of money, allowing you to get your business out of the red as soon as possible.
Not only do Chinese manufacturers work cheaply, but efficiently as well. As such, they can produce a substantial number of products in just a short amount of time.
This could bode well for your business, especially if you’re struggling to keep up with demand. The rapid manufacturing pace of Chinese factories will maintain a steady stream of products into your warehouses. You’ll never have to worry about whether you have enough supply on hand.
What makes Chinese manufacturing so efficient? 1. Less regulation, and 2. Practice! These companies have fine-tuned their operational processes, allowing them to be extraordinarily consistent in their manufacturing efforts.
Odds are, your business won’t stay the same size forever. At some point, you’re probably going to want it to grow. After all, it’s growth that increases revenue, and increasing revenue is one of the primary goals of running a business, right?
The key is for you to have a manufacturer who can keep up with demand when the time comes. Chinese manufacturers are more than suited to do so.
As was noted above, Chinese manufacturers can produce unbelievable amounts of products in just a short amount of time. So, if you ever need to scale up your business, a Chinese manufacturer will be able to accommodate you. Just make the call and your wish will be granted.
Knowledge of the Product
It doesn’t matter what your product is. Odds are, there is a Chinese manufacturer that has manufactured it at length. This is a good thing, as it means that your product can be made to perfection.
This wouldn’t necessarily be true of other types of manufacturers. After all, if they’ve never manufactured your product before, they’re likely not going to do it perfectly the first time. In fact, it could take months or even years before they’re able to adequately manufacture your product.
Utilizing Chinese manufacturing allows you to take advantage of a tried and true knowledge base. These manufacturers have manufactured your type of product many times before and will have no problem doing it again for your business.
An Enhanced Ability to Try New Products
You’ve been selling a single product for a while now, and have seen some good success along the way. But, at this point, you’ve reached about as high as you can reach with it. For this reason, you’re considering selling new products in addition to your original product.
The issue, of course, is that it costs money to sell new products. But with Chinese manufacturing, you can greatly reduce your cost obligation, thus making it easier (and less risky) to facilitate the change.
Were you to use an American manufacturer, you would have to pay a substantial amount of money just to get the new product made. This would be fine if you knew that the product would sell as intended, but you can’t make that guarantee. In other words, it’s tremendously risky.
So, if you’re interested in expanding to new products, there’s really only one option: you have to use a Chinese manufacturer.
When you think of Chinese manufacturing, you might think of poor quality. Yes, in some cases, that is certainly true. After all, not all manufacturers are created equal.
But that’s the case in the United States as well, just as anywhere else. In the end, it’s all about the manufacturer you choose. Some will do a good job, some will do a decent job, and some will do a fantastic job.
Just be sure to vet your manufacturer before signing any contracts. Ask to see examples of their past work and make sure that you’re totally satisfied with the quality.
Remember: Chinese manufacturers have devoted substantial amounts of time working on these products. As such, many of them have perfected the processes, and know exactly how to create the product in question.
Interested in Utilizing Chinese Manufacturing?
What do you say? Are you interested in utilizing Chinese manufacturing? If so, we here at Shield Works are the people to see.
We manufacture a wide variety of goods and do so at a low rate. If you’re at all interested in manufacturing in China, we have you covered.
Contact us today to discuss your needs!
Original equipment manufacturers (OEMs) can help a business with its production processes at a cost-effective price.
They can also be a reliable source that helps drive your business to the next level by taking care of some essential business tasks.
However, if you choose the wrong partner, this can cause production problems. Delivery delays could even result in your company losing customers.
Fortunately, there are several crucial aspects you can look for when deciding how to choose an original equipment manufacturer.
Read on to learn how to find the right OEM supplier for your business.
Original Equipment Manufacturers Quality Standards
Customers have more options than ever before, and if your products fall below their standards, they will simply buy from one of your competitors.
There are many stories about companies purchasing cheap goods that suffer from a severe lack of quality.
While you will want to keep your production costs affordable, it’s important to remember you may have to pay slightly more to obtain superior merchandise.
You should ask if the OEM service adheres to ISO standards throughout their manufacturing process. In addition, the company should train all their staff and ensure that employees are encouraged to report any potential issues.
When a company can identify potential problems early on, there is less likely to be a delivery delay. This can be a vital factor if you need a supply of high-demand products quickly to satisfy your customers’ needs.
A reliable OEM will be proactive and agree on the standards you require before they begin the production process. Then, they can examine their finished items in line with these terms.
By checking all products before they leave the factory, an OEM ensures you do not have to return items when they reach your premises.
When deciding how to choose an OEM, an open and honest line of communication is essential. To maintain your high standards, you can ask the company if they provide access to their site.
There is no need to have a physical presence on the premises because you can use technology to gain 24/7 access.
Whether you are at your desktop computer or using a mobile device, you can always get a live update on the production process.
If the OEM is happy to allow you to view their work through a secure video feed, this provides peace of mind that they will deliver what they promise.
You can even request access to specific locations along the production process. For example, you could view their quality control area to ensure you are satisfied with the finished article.
You may be wondering should you get an OEM if you are worried about the quality of their work. After all, if you haven’t worked with them before, you only have their word that they manufacture high-quality merchandise.
But, you can have more confidence when you partner with an OEM that uses independent third-party testing. When choosing your supplier, you can ask how you can communicate with the independent testers.
It’s best if you can discuss your product quality with them directly. This means you have the reassurance that the factory is working to the agreed standards.
Although the factory should also have its own internal quality control team, an extra layer of testing is reassuring. There is a reduced chance of inferior products slipping through the net.
It can be challenging to outsource your production needs to a company based in a different country. If companies don’t provide you with real-time information, then how do you follow the order progress?
You may also have to inform customers when they can inspect their goods. In this scenario, it’s important to have access to production analytics at all times.
You may be in a different time zone from your OEM and don’t have time to wait for a manager to get to the office.
Before partnering with an OEM service, you can query if they use a manufacturing software system.
For example, you may want to know about the production output, so you know when your order will be ready for shipping. In addition, if deliveries are later than expected, you should be able to view production downtime.
If a supplier consistently has too much downtime, you can decide to move your business to a different OEM.
Access to analytics can also be important as you will expect your supplier to take corrective action when there are issues.
Business doesn’t always run smoothly, and your OEM needs to know how to fix any issues that could have a negative impact on your company.
If you can see this information through the analytics software, it can be reassuring that your products are in good hands.
OEM IP Protection
If other companies steal your Intellectual Property (IP), they could target your customer base. Therefore, when selecting your OEM service, it’s good practice to ask about IP protection measures.
You can query if they have designated zones for specific processes. Also, how do they protect your information? Your partner company should have robust hiring procedures and use the latest technology to protect your data.
It’s also a good idea to work with a company that helps you register your IP in China. This can make it easier to obtain the protection you need for your products without having to navigate the required steps on your own.
Partner with Shield Works Today
Shield Works is a British-owned and managed OEM based in China. We are one of the leading original equipment manufacturers and have been providing our services to satisfied clients for over 15 years.
We operate to the highest quality standards and use the latest technology to provide our clients with the products they need.
We work closely with our partners to ensure we meet delivery times and exceed expectations.
Contact the Shield Works sales team to book a consultation today.
Are you wondering how to improve your ability to assemble your products?
When you run a business, you need to know how to make high-quality items for as little money as possible. For a lot of companies, this proves to be a challenge. They need to stay within their budget while crafting items their clients want to buy.
Doing it in-house can get expensive, so quite a few turn to outsourcing their assembly process. But what do you need to know before outsourcing product assembly?
We go into the top 5 things to know below. Keep reading to learn more!
1. What Is Outsourced Product Assembly?
Many companies take advantage of outsourced product assembly, but do you know what it is?
Outsourcing assembly occurs when a business hires a third-party company to build the items they use or sell. The third-party business might build them in either part or whole, depending on the agreement reached between the two companies.
So, when you first start outsourcing your product construction, think about the items you would like the other company to make. Then, search for businesses equipped to build your items and begin talking to them about entering a working relationship!
2. It Saves Money
Why would people want to outsource their products? Doesn’t it make more sense for companies to produce everything on their own?
When a company makes its own products, it must employ people to create them. This raises the overall cost of running the business. It can especially hurt small companies, which may not have the funds to employ a large number of workers.
Working with another company can cut your production costs. When you do this, you do pay for the work to get done, but the other company provides and employs the workers. As such, you don’t need to worry about paying for salaries or taking new people onto your payroll.
Usually, the other company has its roots in another country, such as China. The cost of production in most of these countries runs cheaper than in other nations, so you will not have to spend as much on creating your final product. It also helps you foster productive and positive business relations with professionals in another country!
3. Not Every Assembly Company Will Work Well for You
Many companies grow eager to save money on their products and agree to work with a third-party company too soon. Just like any other business partnership, you want to make sure you find the right manufacturing company for your needs.
To do this, brainstorm all the qualities a company will need to make your product. Do they have the right materials and items?
You should also ask whether they have worked with any companies like yours in the past. This lets you know whether they’ve created products like yours below.
In addition, pay attention to how well you get along with the workers at the company. Do they handle your questions in a professional manner? Do they have great client services? Because you will work with this company for a considerable time, you should try to find one with which you enjoy working.
4. Ask About Timeline
As you start talking to a company, you should ask them about how long it takes them to produce items and ship them. This impacts the amount of time it takes you to deliver your clients the materials they ordered. As such, you want to find a company that makes high-quality items without taking too much time.
Your timeline discussions should include conversations on what happens when unforeseen circumstances occur. Natural disasters, for instance, might interrupt the company’s ability to get your product to you. So, you should know what measures the company takes to keep their production running well in the midst of emergencies.
At this time, ask who you should contact in the case of an urgent situation. This gives you a person to go to instead of wasting time trying to figure out who to contact.
5. Make Sure Your Intellectual Property Remains Safe
Other countries have different laws surrounding the protection of intellectual property. As a company, you should prioritize keeping your intellectual property safe and uncompromised.
As such, you should research the intellectual property laws in the country where your products will be made. If they don’t have a good track record of protecting the rights of other companies, you should look to make your products elsewhere.
You should also look into the software your company uses and see how it keeps your data secure. Do they use technology known for its privacy features? Is it on par with the security measures you take for your business? Do they perform routine security updates and checks?
A leak of your intellectual property could cause huge damages to your business, including piracy and a loss of data. So, if you want to keep your business safe, look into how other companies will protect your information.
Ready to Outsource Your Product Manufacturing?
So, are you thinking of outsourcing your assembly process?
Outsourcing product assembly serves many companies well. It helps them get the same great products for a fraction of the production cost. In addition, it frees them to focus on innovation and growing their business instead of worrying about building their items.
Here at Shield Works, we provide you with great product manufacturing services. British-owned and located in China, we employ qualified individuals dedicated to giving our clients the best items for the best price. Contact us today to learn more about what we can do for you!
Are you tired of the expensive cost of contract manufacturing in your home country? You really should consider contract manufacturing in China to help lower your spending!
Knowing how to find a contract manufacturer in China may feel like an intense task. However, it is not as difficult as you might think. All it takes is following a step-by-step process.
To learn how to find the best OEM manufacturers in China, keep reading.
What Is Contract Manufacturing?
If you aren’t familiar with contract manufacturing, let’s cover the basics.
Contract manufacturing means that your company is looking for another company to take responsibility for part of the production process for your products. This can be a great way to collaborate and split duties with another company to complete your production more effectively.
So, how do you find a contract manufacturer in China?
What to Do Before Finding a Manufacturer in China
You’re still searching for a contract manufacturer, but there are still some important tasks you need to complete before you solidify one.
File Your Intellectual Property Rights
This is a very important step. You will need to register your intellectual property rights (or IP rights) in China.
Your product’s IP includes any watermarks, trademarks, and other copyrights associated with it. If you are not the first company to do this, then some other company may step in.
That’s right: the first company that registers IP rights in China is the one who gets them. Even if your company is the only one of its kind, your IP rights could be at risk if you don’t register them in China.
How to Find a Contract Manufacturer in China
Finding the right contract manufacturing in China is essential. You want to make sure you and your contract manufacturer are on the same page when it comes to producing your products.
Here are some things to consider when beginning your search for OEM manufacturers in China.
1. Do Your Research First
The most important thing to do in the beginning stages is to do proper research on product development as well as contract manufacturing in China.
You need to develop your product idea to the fullest. This helps you know how much money and time it will take to create your product in bulk.
It can also give you some idea of what customers want and will expect from your product as well.
2. Know the Kinds of Factories in China
There are three kinds of factories in China, and all of them vary.
A raw materials factory is what it sounds like: it makes everything you will need to make your product to begin with. Once these materials are made, they are then sent to a component factory.
Unlike a raw materials factory, a component factory makes part of your end product but not all of it. That’s a job for the assembly factory.
Again, the assembly factory sounds like what it is. Your product is assembled in full here.
One thing to keep in mind is that not all factories will do all three types of manufacturing work. You will need to double-check with the factory itself to see what they can offer and do for your product.
3. Find the Right Contract Manufacturing in China
Finding OEM manufacturers in China can feel like a dubious task. The good news is that you have several places you can look for options.
One easy way to research potential manufacturers is to look online. Alibaba, MadeInChina, and many other places can lead you in the right direction, but you may have some delays due to the COVID-19 pandemic. There are also trade shows and other opportunities to find contract manufacturing too.
You still need to do your research for the one that fits best with you. You can learn more about Shield Works’ manufacturing services here. As a British-owned manufacturer in China, we know how to overcome cultural barriers to get you the products you need.
Avoid using a sourcing agent: we’re here to help!
What to Do Once You Have a Manufacturer
Once you have a manufacturer picked out, you still need to do a couple of things. Let’s break it down step by step.
1. Draw Up an NNN Agreement in Chinese
An NNN agreement is a “non-disclosure, non-use, non-circumventing” agreement. This means that your IP rights will be protected even further.
It must be written in Chinese so that it is seen as genuine in the eyes of a Chinese court.
2. Create an OEM Agreement
An OEM agreement stands for Original Equipment Manufacturer agreement. This is where you write all of the details of your product. Be as specific as possible.
Like the NNN agreement, this one must be written in Chinese as well. In a Chinese court, the terms of the contract will only be enforceable if written in Chinese.
3. Quality Control
Quality control assurance throughout the production process will save you a headache later. This means making sure you keep certified product samples onhand too.
A good way to do this is to have a third party perform quality control procedures on your manufacturer. Though the factory may have its own quality control team, it is always best to have an outside perspective too.
Contract Manufacturing in China
Finding the right contract manufacturing in China takes time, like anything. When you find the right contract manufacturer, your product’s production process will run smoothly.
Traversing a different culture and language for contract manufacturing is stressful. Lucky for you, Shield Works is here!
Let us be your chosen manufacturer in China. Contact us today so we can get started!
If you’re the OEM (original equipment manufacturer) of a design spec, then production is one of your most important considerations. Unfortunately, many companies stumble when it decides to make their OEM products in-house or through outsourcing. In most cases, outsourced OEM products are cheaper and quicker. But, is this always the best course of action? In this article, we’ll explore whether or not outsourcing your OEM production is the best course of action. Let’s get started!
Outsourced OEM Production
Outsourcing your OEM production involves allowing another manufacturer to produce your product. You keep all the trademarks and intellectual property, but another company does the production.
Most often, this is done with multinational suppliers. Consulting companies with expertise in finding manufacturers will usually help you get in touch with the right company. Let’s take a look at some of the pros and cons involved in this method.
The biggest advantage that comes with OEM production is cost. Since the outsourcing company is creating your product in bulk, you typically end up saving money on production costs. What’s more, the final product is generally of superior quality. As long as you have strict testing standards, then the outsource OEM firm should be able to meet them if they’re competent.
Many outsourced OEM companies also have specialized technology that allows them to create components you wouldn’t be able to create on your own. In the past, OEM production typically only worked for larger companies. However, this is beginning to change. Smaller companies with excellent design skills can take advantage of this type of outsourcing.
It allows them to avoid dealing with factory floor production skills, which take a lot of energy and money to manage. Instead, they can focus on more design and promotion while allowing a skilled workforce to handle the production.
Unfortunately, there are some downsides to outsourcing your OEM productions. For one thing, you’re at the mercy of your supplier when it comes to quality control. As such, you’re responsible for any problems that might occur at the end of the day. Furthermore, you may have difficulty finding an OEM production firm that’s willing to take you on.
These companies generally only like dealing with clients that create a lot of demand. As such, smaller companies may have a difficult time finding multinational production firms, especially if their products are hard to make.
Finally, if you don’t go with a company that you’re sure of, then you may be at risk of property theft. This occurs when a manufacturer infringes or steals your intellectual property right. It occurs enough in the business, that you should inquire what the company is doing to fight against it.
In-House OEM Production
In-house production put vertical integration ahead of scale and affordability. Typically, in-house OEM production worked best for smaller companies. However, that’s beginning to change. Let’s take a lot at some of the pros and cons involved in this method.
The biggest advantage to in-house production is the amount of control you get over your product. As the OEM, you’re naturally an expert when it comes to producing your work. As such, you don’t need to spend time teaching someone else to make it. In-house can also be more advantageous when it comes to scheduling concerns.
Since you don’t need to ship your product or parts over long distances, you can meet your scheduling needs more easily. In-house production also allows you to make more advanced components.
If your product requires a specific part that’s difficult to make, then you’ll have a lot of difficulties finding an OEM manufacturer to make it. However, with enough demand, you can find some custom manufacturing options.
It shouldn’t come as a big surprise that there’s a huge shortage of skilled workers in America. Though this problem was a long time coming, it’s been exasperated by the COVID-19 pandemic. As a result, the New York Times predicts that two million skilled jobs could go unfilled by 2025.
As such, finding workers for your in-house production may prove difficult. Another big factor is that it will cost even more to make your product in-house. The sad reality is that overseas production is much more affordable than domestic. What’s more, outsourced OEM production is typically higher in quality than in-house. So, ultimately, you’ll be paying more for a potentially inferior product.
Why China Is Uniquely Qualified to Handle OEM Product Manufacturing
There’s a reason why the vast majority of OEM outsourced production goes toward China. China accounts for over 28% of all global manufacturing output. The advanced production capabilities in the country make it easy to meet huge product numbers at an affordable price.
In particular, clothing and electronic brands like Nike and Apple outsource their manufacturing work to the company. In the wake of the COVID-19 pandemic, China is poised to be one of the first countries to dive back into the manufacturing industry.
Despite being one of the early countries to be hit, the government has been able to largely contain the spread within the country. As such, China will have more skilled laborers than many other countries combined to meet OEM product demands.
Ready to Save Money On Your OEM Production? Contact Shield Works
We hope this article helped you learn whether or not outsourced OEM product manufacturing is the right decision for your company. Ultimately, the decision depends on your specific set-up. But, the right arrangement can allow the company to divide and conquer in ways that are simply impossible while maintaining an in-house division.
So, how do you find the right manufacturer? Look no further than Shield Works. Our British-owned company works out of China to provide you with affordable manufacturing solutions, as well as expertise in nearly every product category. But, don’t take our word on it. Contact us today so we can walk you through what we can do for you.
Have you ever received parts for your equipment and products that don’t work as expected? This is a common problem businesses face when they don’t partner with an OEM manufacturing company.
Choosing aftermarket products to save money will end up costing you more in the end. Parts will fail, take longer to ship, and don’t meet the required specifications of your products.
OEM manufacturing, however, delivers quality parts designed to fit your equipment and products. Every product you receive will work as expected and comes with additional warranties and support.
Do you want to invest in long-lasting parts guaranteed to work with your products? Check out these benefits of OEM manufacturing.
What is OEM Manufacturing?
When you see OEM manufacturing on an item, it stands for Original Equipment Manufacturer. An OEM manufacturer is a company that produces original products or parts to a product. Another company purchases the OEM parts and products to use in their products or sell to buyers under their branding.
The companies reselling the OEM parts are Value-Added Resellers or VARs. The VAR sells OEM products with added features to enhance its benefits. VARs and OEMs have a mutually beneficial relationship.
Your car is a perfect example of an OEM and VAR relationship. The brand of the car is the VAR but they don’t manufacture every part of their vehicles. An OEM company manufactures these parts, such as the tires, seat belts, or the car battery.
OEM Manufacturing Benefits
Working with an OEM manufacturing partner guarantees the products you buy are high-quality and will properly fit in your products. Some aftermarket companies may offer similar parts but they may not fit nor offer the same compatibility.
Here are a few reasons why you need to work with an OEM original manufacturer.
When you need a specific part for a project or as a replacement, ordering from your top OEM manufacturers will take less time. There’s no “middle-man” as you can directly order parts from the OEM manufacturer.
Working with a third-party distributor, broker, or aftermarket company will take significantly longer. These companies may take longer to identify the part and determine whether they have a particular part or product in stock. In other cases, it will take longer for them to locate it in their storage warehouse since they distribute other products as well.
Reputable OEM manufacturers take pride in delivering their products as quickly as possible. Many monitor their delivery methods to ensure your receive your parts and products on time.
OEM manufacturers offer superior support when it comes to ordering or asking questions about a specific part or product you’ve ordered in the past. This is because the original engineers are a part of the OEM manufacturing company. You have access to engineering and technical support directly from the engineers.
OEM manufacturers have the greatest knowledge base of their products. They designed and crafted their products to fit a specific need or needs. From there, they tested the products to ensure they meet requirements and to find out their limitations.
OEM manufacturers know their products best. You’ll receive the most accurate information and answers to your questions directly from the source.
OEM manufacturers take pride in the products they create and place their name on every part and product. The OEM’s pride and confidence translate into high-quality products. OEM manufacturing companies work directly with their customers to ensure their parts fit their customers’ needs perfectly.
The success of an OEM manufacturing company largely depends on keeping their customers satisfied. Their parts and products need to continuously meet their customers’ expectations. Failing to do so can result in lost customers and a loss in sales.
What do you do if you need a part or product replaced? OEMs offer replacements that are identical, if not better, than the original part. OEMs craft their parts to meet the original part’s specifications and compatibilities.
Parts and products manufactured by an OEM company come with a manufacturer’s warranty. This is also true for replacement parts—an advantage you can’t always get with any aftermarket company or distributor. Many OEMs will happily replace parts and offer a warranty on the replacement parts as well.
If you find a component or product has flaws, you can contact the source and request a new one. Again, OEMs value their customers’ satisfaction and are happy to help your business with any issues you may run into.
Added Value and a Longer Lifespan
OEM manufacturers like Shield Works, craft parts that are identical to the parts before. New and improved pieces meet the same specifications ensuring they offer the same performance as before.
Any spare parts offered by an OEM manufacturer will outlast and outperform any aftermarket product. OEMs use high-quality materials and regularly test all of their products for durability and reliability.
Opting for an aftermarket part or product may have cheaper upfront costs but the cost of installation and running the part will cost you more. These parts are likelier to fail and possibly damage your equipment. An aftermarket part won’t have the same specifications, warranties, and lifespan as OEM products.
A Greater Return on Investment
Partnering with an OEM manufacturing company will offer you a greater return on investment. You can order custom manufactured parts better suited for your products and equipment. Since OEM parts must meet specific requirements and specifications for your products, they’ll improve the longevity of your equipment. This level of reliability and longer lifespan will save you money and time.
OEM manufacturers look to and prepare for tomorrow meaning they’re continuously looking for ways to improve their products to better fit their clients’ needs. Working with an OEM manufacturing company will give your company and equipment an edge over the competition.
OEMs can make more accurate improvements to their parts as they already have the knowledge, design plans, molds, and testing of their current products. OEM clients can enjoy newer technology and upgrades to parts faster.
Shield Works OEM Manufacturing Is Right For You
OEM manufacturing companies believe in crafting strong business-customer relationships by offering unparalleled expertise and high-quality products. OEMs take the time to understand your business and your needs to ensure you receive the best service and products for your company.
Do you have a project you want to share? Let us know. We have the experience, knowledge, and skills to make your next big project a success!
Are you aware that around 20% of small businesses fail within a year?
Your company must stay afloat, even with a suboptimal budget. It’s tempting to jump to outsourced manufacturing because of convenience and quality. However, it doesn’t come without its risks.
So, what are the things you must be aware of?
First, you must know that it’s not a fool-proof solution. Read the rest of our guide to understand it better.
Direct arrangements with suppliers from every industry always come with risks. However, the risk can be greater when you’re sourcing from an international supplier. If you plan to outsource, you must carry out a thorough investigation.
You must know the possible source markets and suppliers. After that, you must make an in-depth risk assessment. Check the provider’s possible suppliers to know potential issues that may arise.
Your investigation must include all aspects of the supplier. It includes operations, quality, leadership, and labor. See whether their track record holds up to their promise.
This way, you’ll avoid operation disruptions because your supplier lacks a follow-through. You may also ask other helpful companies who used your potential supplier before. You’ll gain insight into working with them once you made the decision.
The results of quality failure are worse when it comes from international sources. Compared to domestic sources, the lead times for transporting products are longer. When this happens, you’ll likely suffer from serious business disruptions.
It can get so bad that it takes several months to correct the problems. To mitigate this risk, you must prepare detailed product specifications for your sources. Tell them that you’ll do some independent quality control inspections from time to time.
Take note, a decline in product quality can damage your reputation. Avoid this and spend a few weeks observing the process of manufacturing. This is cheaper and ensures quality, which is better than discovering you need a recall.
Intellectual Property Protection
Be careful of sharing information with your outsourced manufacturers. Check their origin country and their intellectual property rights first. Otherwise, someone might leak your propriety information.
It often happens when the manufacturer’s country has more relaxed IP laws. Depending on the product, you might find it better not to outsource anything. However, if your product undergoes regular upgrades, this might not be an issue.
If you think you can develop better items faster with better product quality, you may neglect patent protection. This happens when you pump out new products faster than the market’s capabilities.
Brand Reputation Risks
If you’ve been in the business for a long while, you know it takes lots of time to build a brand. Overnight success doesn’t exist because it takes years or decades. Your brand reputation matters, whether your company is local or global.
To minimize the risk to your reputation, you must consider some factors. Here are some:
Transportation and Delivery
Outsourcing to foreign services may also be troublesome if you don’t go through with the contracting process step by step. It may lead to delayed deliveries if not cleared up well enough.
The process of ordering and delivery must have a consistent time frame. Think about whether your outsourced manufacturer can keep a consistent timeframe. If it increases, you must find ways to adjust your customers’ expectations.
You may also look for alternatives to get the time frame back to its proper place. If you can’t, you’ll risk ruining all your hard work. Customers hate waiting for more than they need to, so consider this factor as your priority.
It can impact your brand identity between countries. Lots of international brands understand this concept. It allows them to thrive and penetrate markets regardless of the country.
So, ensure that your brand will adjust to various cultures. It must follow expectations, standards, and traditions. It will allow your company to promote a seamless integration.
This conversation isn’t as prevalent. Whenever it surfaces, it can harm your brand. It would be best to get a manufacturer that uses humane standards to make and fulfill your products.
Your manufacturer’s guidelines must be similar to your country’s. It’s especially when it’s labor laws and other related guidelines for employee safety. If your country is a member of ILO, both you and your outsourced help must adhere to its guidelines.
It seems obscure, but your manufacturer’s weather can affect your brand reputation. Bad weather can result in various delays. It puts your brand in a negative spotlight because you have to reveal your labor force.
The way your provider handles some weather-related situations can bite your supply chain as well. Regardless of their faults, your brand reputation will suffer. It’s why you must put it above everything else.
Is an Outsourced Manufacturing Right for You?
Before outsourcing a manufacturer, you must think about your company’s readiness. You must weigh the advantages of this decision to your company. It matters not what industry you’re in since its benefits and drawbacks remain the same.
Benefits of Outsourcing Manufacturers
The primary reason to do this is to cut your spending. At the same time, it will boost your business’s productivity. Many companies are willing to produce popular demands.
You’ll also avoid every bureaucratic aspect of manufacturing. It’s what bogs companies down, especially for countries with stringent laws.
Drawbacks of Outsourcing Manufacturers
The laborers under your outsourced manufacturer don’t work under you. You have no direct means to boost these people’s mood or morale. If they boycott work because of difficult conditions, your company will suffer.
Invest in Outsourced Manufacturing Today
Despite the risks, an outsourced manufacturing partner can help boost your business productivity. It’s all about finding a reputable manufacturer to work with. Use this information to find the best one around.
Are you looking to work with an international manufacturer? If so, contact us today and let’s talk about boosting your company’s sales.
In placing orders, shipping works best when orders come in bulk. Though with orders that come smaller or lesser than the expected amount, it hurts the shipping companies due to the costs involved. In such circumstances, you would encounter the option for freight consolidation. This method works by putting smaller packages together into one cohesive shipment. This helps in reducing both shipment costs and environmental impact.
Using order consolidation has its upsides and downsides. Today, we will look at these details and see how to make this work for you.
Reduced Shipping Costs
To start, we will look at the advantages you gain from order consolidation. One of the more noticeable advantages of this arrangement is that it costs less on shipping.
When you have shipment loads that are Less than Load (LTL), the shipping fee would depend on the size of the item. The rates would also vary between shipping companies. Though this changes when it fills up only 1/6 of the full load.
In such situations, it would end up with you paying for the rate equivalent to a full shipment size. This will have you shoulder the other underlying fees.
This changes when you go for order consolidation. By putting more LTL packages in a single shipment, you can reduce the costs of shipping.
This works well for cooperative setups. Here, you have one shipment to cover multiple packages from different sources.
You get to divide the costs with others, letting you pay your side of the container or truck. This also applies to warehousing, especially with orders that go through international shipping.
There is also an arrangement where you have a warehouse for packages from multiple shops. For such an arrangement, you need order consolidation to answer that. This allows you to send the packages to your area in a single shipment.
Streamlined Transportation with Faster Delivery Times
With this setup, you can get shorter times for transit and lead times. Due to how freights go in the same direction, the shipping becomes streamlined with its speed. This helps with timeframes due to how the majority of freights shipped using freight consolidation follow the same routes.
With this in mind, not only does it shorten the timeframe for the package to arrive, but it also comes without any interruptions. This means the order gets to the receiver without any stops.
Reduced Item Damage Risk
A single package on its own when placed for international shipping has a high chance of damage. It could end up getting jostled around and tossed from one corner to another without any means to secure it. This can prove detrimental as it damages the ordered item.
When you have it alongside other packages in a single shipment, it secures the item in place. This means it has less space for it to get tossed around. You can achieve this through simpler shipping schedules.
Needing Lower Levels of Inventory
Opting for order consolidation allows you to use a consolidation warehouse to make this work. On this aspect, you need low inventory levels when fulfilling customer orders. On the business side, this helps you open up more space for other merchandise and products to sell.
Store owners would note this as an advantage. It allows them to sell products with a higher variety. It also helps with organizing products and reduces inventory carrying costs.
Reduced Emissions and Environmental Impact
One of the things that affect the environment is fuel emissions. What makes order consolidation attractive is its approach towards efficiency.
Not only does it apply efficiency in storage space for the shipment. It also puts it into practice with fuel emissions and costs.
Instead of splitting up different shipments in separate runs, you end up having packages shipped by batch. This reduces the number of trucks and other transportation vehicles involved in the delivery.
Helps Avoid Overcrowded Docks
For brick-and-mortar shops, overcrowded docks can impede in handling shipments. With this method, you can avoid overcrowded docks by reducing the number of trucks present. With more space on the dockside, you have an easier time handling the products.
This opens up towards increased efficiency. It helps avoid late shipments and unintended detention times.
Improving Customer Satisfaction
With order consolidation, customer satisfaction improves. Not only does it provide the products with better quality, but it also charges less on shipping. With improved customer satisfaction, they would want more.
Logistics Scheduling Becomes Complicated
For this approach, scheduling becomes one of the trickier aspects. The process of scheduling the shipments may end up being the long and heavy portion of the whole arrangement. It involves a lot of aspects of organization and execution.
If you choose to play this setup by ear, you would end up in a disorganized mess. You would end up with frequent reschedules and service calls.
Consider going for a defined system for order consolidation. With an organized system in place, you have a simpler time dealing with such issues.
Fulfillment Inaccuracies and Shipping Delays
Another notable problem is in the shipping in itself. Though this pertains to the other aspect, the warehouse. Order consolidation opens up a lot of complications in the scheduling. Making any wrong calls on this would cause delays in fulfillment.
The other issue that would come up would be inaccuracies. Without proper supervision, the packages may end up at the wrong address.
What you need to pull this off is a reliable logistics service provider. They can assist with situations involving warehousing and inventory.
Order Consolidation for Efficient Order Fulfillment
Using order consolidation provides a good number of advantages. It provides an efficient means for fulfilling products for orders that have smaller packages. While complicated, a reliable logistics company can help you ease out these situations.
Order consolidation is one of the solutions we offer. We can help you get started with your fulfillment needs, such as warehousing. Contact us today and we can help you get started.