Manufacturing is a vital part of the U.S. economy. It accounts for more than 11 percent of total output and about 8.5 percent of total jobs.
This also means remaining competitive can be a challenge. Doing so entails producing superior products for your customers.
If you are new to manufacturing or looking for new opportunities for production, assembly, or warehousing, consider original equipment manufacturing (OEM). This alternative can make all the difference in the price you are paying for parts and the quality of the end-product you are offering.
There are many advantages to choosing the OEM option. This original equipment manufacturing guide will give you an idea of what these production methods entail. It also will offer some insights into how your business could benefit from them.
What Is Original Equipment Manufacturing (OEM)?
Original equipment manufacturing (OEM) means that a company makes components for other businesses. These value-added resellers (VAR) then sell the end-product under its own brand.
OEM companies market to other manufacturing retailers, while VARs focus on sales to the public. The computer, electronic, and automotive industries are the most common types of businesses that use OEM.
For example, a computer company will not manufacture all the components in the machine. An OEM will make the processor, disc drive, or other hardware, then the company assembles and sells the completed computer. Similar arrangements are found in automobile manufacturing.
OEMs are distinct from aftermarket parts manufacturers. These companies make parts that look and function like original components. They are generally less expensive, although that is not always the case.
Examples of aftermarket parts include fenders, rims, or cargo racks for vehicles. These are less common in computer manufacturing but are prevalent in the manufacture of a variety of electronic products.
Most aftermarket parts do not function with the same reliability as OEMs. There are exceptions, but it depends on the product. For instance, people might buy tire rims that drive better than generic ones that come with their vehicle.
What are the Advantages of OEMs?
There are many advantages an original equipment manufacturing company can provide. Here are a few significant ones to consider.
The most obvious advantage of OEMs is that they function as intended. Unlike aftermarket parts, OEM components fill an original, specific function. This means that in most cases, they are more reliable and durable.
A reputable OEM company will have some type of guarantee for the parts they are producing. Warranties differ by company, but you can expect to get the components they promise and that they will perform as intended.
Another advantage of OEMs is customization. If you are ordering these parts for a specific purpose, you will be starting from scratch with the production company. They will design a process for producing the part with precision.
Besides basic parts production, OEM companies will often offer extra assembly options. They are more likely than other manufacturers to work with you on getting the final combination of components that best suits your production demands.
You can expect a more personal and interactive customer relationship with OEM companies. This is because, from the outset, you must be in conversation with them about components and their function. They are more likely to be in tune with how to meet your product and assembly needs.
OEM companies will send you samples and adjust specifications based on your recommendations. Likewise, they can adjust the production process where necessary. This is something you will not get from many aftermarket manufacturers.
Aftermarket parts can be cheaper for consumers looking for a quick replacement. But this is not always the case for VARs with larger manufacturing needs. In fact, due to economy-of-scale, OEM companies can keep production costs low and pass those savings along to their clients.
Once OEMs have design and manufacturing processes in place, production is cost-effective. Depending on the size of your order, this is likely to mean cheaper costs to you, especially in the long term.
OEM companies can estimate the cost of production with precision. This will allow you to budget long-term. It also allows you to eliminate the guesswork of what parts may cost––and how quickly you can get them–months down the road.
This also means you can return to that OEM at a later date and expect to receive the same part. This can translate to huge efficiencies for your business. Since you will not be starting from scratch, you can fill new orders quicker without having to worry about accessing the parts you need to do so.
Warehousing is a big part of manufacturing. Another benefit of going with an OEM company is their ability to assist in this endeavor. OEM companies are more likely to offer a variety of third-party logistics (3PL) services, such as repackaging and labeling.
Warehousing is another add-on service that OEM companies are more likely to offer than aftermarket parts businesses. It can be a huge asset for larger orders and shipping efficiency.
Warehousing provides you with greater flexibility for inventory management as well. Prominent OEM companies are likely to offer cloud-based management services. Such programs can make it easier for you to manage your parts on-hand and get them where they need to go.
This can translate to serious cost savings for your business. It helps you manage larger orders and do direct shipping to customers. It also may allow you to reach a broader market base.
Find Original Equipment Manufacturing Near Me
Now that you have an idea of some original equipment manufacturing tips and what OEM entails, you can decide if it is right for your business. Find a reputable company that can meet your specific production needs and provides value-added services that can help you provide a better product and manage delivery processes.
At Shield Works Precision Manufacturing, we provide original equipment manufacturing (OEM) production, assembly, and warehousing solutions to our international clients. We offer quality custom manufacturing at globally competitive speeds and prices. Reach out to us today for a free quote and consultation.
China’s factories ran at record-high levels in the second quarter of 2021. High demand for Chinese exports in places like the US and Europe fueled this production.
Would you like to take advantage of the benefits a Chinese OEM manufacturer can bring your business, but you’re not sure where to start? Are you wondering how to choose an OEM manufacturer?
Learn more here about how to find the right OEM manufacturer for your products.
Why Use an OEM Manufacturer?
Many companies don’t have the resources for high-volume manufacturing or highly specialized products. You can outsource manufacturing to reduce costs and avoid the complexities of keeping production in-house.
An Original Equipment Manufacturer (OEM) makes the components for your product. You provide the design specifications for anything the OEM produces. You receive the parts and assemble them into the finished product with your trademark.
An OEM with experience making products similar to yours knows the product assembly process. They already have a supply chain in place. You can put this experience to work for you.
Domestic or Overseas Production?
Before you start looking for the right OEM manufacturer, you need to decide if you want to use a factory in the US or overseas. The best solution for your product manufacturing depends on your business priorities.
Pros and Cons of Domestic Manufacturing
Domestic manufacturing has some advantages. Using a factory in the US can give you more direct control over production. You can visit the site more regularly. You avoid dealing with tariffs and international shipping logistics.
American factories usually let you order small batches of a product. Overseas factories often have large minimum orders.
The main disadvantage of using an American factory is that you’ll almost always pay more. In addition, you may not be able to find a domestic manufacturer for some types of products.
Pros and Cons of Overseas Manufacturing
Using a factory overseas has several benefits. A factory in a country like China will almost always be cheaper than a factory in the US.
You have more options. The vast number of companies that have outsourced their manufacturing to China means that you’ll usually be able to find several sites with experience making your type of product.
Possible challenges include longer shipping times and handling import/export regulations. You’ll also need to navigate differences in business cultures. However, you can address many of the issues surrounding overseas production when you start vetting potential manufacturers.
Start Looking for a Chinese Manufacturing Plant
You can get suggestions for Chinese manufacturers you may want to use from many sources. Your industry trade association can give you potential names. The small business network for your industry is another resource.
You can also get recommendations from business contacts and networking groups.
International trade shows in the US that attract Chinese manufacturers are a good starting point as well. You can meet manufacturers and make connections with exhibitors selling products similar to yours.
Online directories of overseas manufacturers are a good resource. These sites include:
- Global Sources
- Global Sourcing Specialists
Searching by industry or product category can help you find manufacturers with expertise in your area.
Narrow Down Your Choices
You can use several factors to narrow down your list of potential manufacturing partners. One of the most important considerations is to find a factory that makes products similar to yours. Some manufacturers will offer to make anything, but the quality will likely be lower.
Look for online ratings and reviews to see what other buyers say about the manufacturer.
Finally, look for manufacturers that primarily export to the US and other western countries. These manufacturers already have experience complying with the necessary quality standards, product safety standards, labeling regulations, and packaging requirements. They’re more likely to have the international shipping logistics you need.
You can also look for a Wholly Foreign Owned Enterprise (WFOE). A WFOE manufacturer has its production facilities in China. However, the company has non-Chinese ownership and management.
Depending on its ownership, a WFOE will give you the quality and service western businesses expect.
Protect Your Intellectual Property
Protecting your intellectual property (IP) is critically important as you begin the process of outsourcing your manufacturing. Copyrights, trademarks, and patents are some tools you can use. Be sure your legal protections are designed for international situations.
A non-disclosure agreement (NDA) is a legally binding contract. It helps protect you against other companies copying your product. Before you start getting quotes from potential manufacturers, they should sign an NDA.
Questions to Ask a Potential OEM Manufacturer
Once you’ve narrowed down your list, it’s time to start asking some detailed questions. Ask about the labor practices of any factory you’re considering. Be sure to verify this information the best you can. Unsafe working conditions or abnormally low compensation for workers are at minimum a PR risk for you.
Ask to see a business license and documentation of the quality control system. Recent proof of inspections or third-party audits is also important. A reputable company will give you this information.
Other questions to ask include:
- What is your experience making this type of product?
- Who are some of your current clients?
- Do you do all the work in-house or subcontract to other factories?
- What is the minimum order size?
- How long will it take to make my order?
- What is the price for samples?
- What is the price for production?
- What are the payment terms?
With this information, you can choose two or three finalists and ask them to make a sample of your product. Comparing the results will show you which Chinese manufacturing plant you should use.
Choose Your OEM Manufacturer
The process for finding and evaluating an OEM manufacturer in China can seem overwhelming. Thorough research will help you find the best factory for your products.
Avoid the hassle and choose Shield Works for your product manufacturing. We’re a 100% British-owned WFOE. You get benefits like full IP protection, a live video stream from your manufacturing zone, and ISO standard quality control.
We also offer warehousing and logistics. Contact us today to find out how we can be your outsourcing solution.
Choosing the right manufacturer for your business will play a significant role and how much revenue you are able to generate. For this reason, most entrepreneurs tend to work with a Chinese manufacturing plant.
However, not everybody understands the benefits that they can experience from doing so. Let’s explore the key details you need to know about China manufacturing.
Lower Overall Costs
As you might assume, one of the primary benefits of outsourcing your manufacturing to China is the lower labor costs.
This is simply due to the fact that Chinese facilities have much less overhead to work with. Additionally, they also have fewer training costs. When manufacturing domestically, facilities need to allocate a significant amount of money to cover these expenses.
This leads to businesses of all types outsourcing instead. Of course, wages in China are also lower than those in the United States.
This allows each dollar you spend to go much further when outsourcing. Keep this in mind when moving forward so that you can take advantage of the utility Chinese product assembly can provide.
Larger Production Volume
Not every business needs to manufacture thousands of products within a single order. However, large organizations often find it difficult to find a domestic facility that can satisfy their needs.
Chinese factories produce goods for a substantial number of countries on Earth. This means that China has typically created facilities that are capable of high-volume production. In fact, even the average Chinese factory could drastically outperform most facilities within the United States.
For companies that need a massive supply of their product, there is simply no better alternative than outsourcing to China. In many cases, doing so is also the only way to hit your target metrics.
Part of long-term success involves scaling your business.
This can occur in a multitude of different ways. For instance, you might introduce a new product line to customers in order to generate additional revenue.
Or, you may break into growing markets in order to establish a niche. Regardless of how you do so, Chinese manufacturers can help you diversify your business opportunities. Creating new products, in particular, is one of the primary ways in which they can help.
In some circumstances, choosing a Chinese OEM manufacturing plant could be what helps you set yourself apart from your competition.
Quick Changes to Product Design
Domestic facilities can’t always accommodate design changes. More specifically, it may take them days or weeks in order to implement your new ideas.
As you can tell, this can easily cause issues with your sales numbers. Your current product might not be something your customers would be satisfied with. Delayed orders due to design changes also carry the risk of having your audience turn to competitors instead.
Chinese facilities are always ready to implement required changes. In fact, all you need to do is get in touch with a representative from your manufacturer and convey what you need.
More often than not, the facility will begin manufacturing the revised products immediately. This is a crucial factor to consider, as it can often mean the difference between whether or not you maintain your brand reputation.
Intellectual Property Protection
Interestingly, many people are unaware of the fact that many Chinese factories prioritize intellectual property protection.
This means that they painstakingly work to avoid any sort of infringement that could land you in legal trouble. For example, let’s assume that you sell a product that is highly similar to that of a competitor.
A reputable manufacturing facility in China will go out of its way to ensure that no copying or reverse engineering has occurred. As with any other manufacturing industry, there are shady facilities that employ the above tactics.
The good news is that you can research the reputation of your prospective factory to ensure that you avoid working with ones that use underhanded tactics. Otherwise, you may find yourself in a situation that is difficult to overcome.
Not only are Chinese factories capable of mass production, but they can also do so at a notable rate.
These facilities have the newest and most efficient equipment that makes them capable of meeting virtually any production standard. This also allows smaller organizations to compete with larger ones.
Under many circumstances, small companies simply can’t keep up with the rate at which larger companies produce goods. Without the right manufacturer on your side, there’s a strong chance you can’t remain competitive.
How Can I Find The Factory Right for Me?
It can seem overwhelming to find a Chinese manufacturer. Not only are there time zone complications, but the language barriers in place often deter entrepreneurs from doing so. Working with a professional will help get you in touch with the facility that is ideal for your business.
These individuals will serve as the liaison between you and the other party. So, they will handle nuances making agreements, conveying production needs, etc.
You can check out this resource to learn more about how you can benefit from doing so.
China Manufacturing Can Be Game-Changing
So, be sure that you keep the above information in mind when determining whether or not this decision is right for you. From here, you’ll be able to leverage China manufacturing if it’s appropriate for your business.
Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.
Are you looking for manufacturing services but aren’t sure where to turn? Electronics companies and more usually outsource their manufacturing to expert facilities that engineer their products with precision. In a computer or smartphone, every component has to be carefully constructed to create a positive end user experience. There isn’t much room for error. Because of this, brands often turn to OEM manufacturing to create their components to get the best possible quality and safety for their products.
OEMs, or original equipment manufacturers, don’t just work in the electronics industry, however. Besides OEM phone manufacturers and PC manufacturers, you can find companies producing all kinds of consumer products. Practically any business can utilize OEM manufacturing and enjoy its many benefits in their field.
Best of all, when you turn to OEM for your manufacturing needs, you get the same quality and reliability that top brands rely on.
Some businesses turn to other types of manufacturing: aftermarket manufacturers or value-added resellers. These alternatives work well in the industries where they excel. But nothing compares to the precision and service offered by top OEM manufacturers, whether your company produces business electronics or consumer products.
If you want to better understand the benefits of using OEM, then you’ve come to the right place. Keep reading for the top five benefits of OEM manufacturing.
1. Reliable Quality
Earlier, we mentioned aftermarket manufacturers and value-added resellers as being alternatives to OEM. But neither option provides the same level of customizability or support that OEM offers.
Aftermarket manufacturers make parts that are meant to imitate OEM-manufactured components. This often comes at a cost, as aftermarket parts are often low-quality compared to OEM parts. Aftermarket manufacturers are also limited in the level of customization they can provide to their customers.
Value-added resellers take OEM parts from other manufacturers and enhance them. They do this by adding new features and capabilities with additional components.
While VARs fill an important role in the market, they’re limited by the availability of OEM parts. VARs don’t create entirely new components from scratch, which can hold some businesses back.
As their name implies, original equipment manufacturers specialize in manufacturing brand-new parts based on original designs. This means they’re capable of building necessary components from scratch. It also makes OEM manufacturers well equipped to provide remarkable levels of customization to their customers.
OEM companies work directly with their customers. Because of this, they’re better prepared to produce products that perform exactly as their customers need them to. This often leads to sturdier, longer-lasting parts than aftermarket manufacturers can provide.
Best of all, the best OEM manufacturers are constantly working to improve the quality of their products.
2. Competitive Pricing
One of the highlights of OEM manufacturers in the competitive prices they offer. Despite providing excellent support and service, manufacturing parts with an OEM is well within the budgets of most businesses.
While aftermarket parts are sometimes cheaper, their low prices often come at the cost of both quality and customization. And when you buy OEM parts in bulk, you can save even more. You may even match the prices of top aftermarket manufacturers.
3. Faster Production
You probably wouldn’t expect the production of physical parts to happen very quickly, but with an OEM, production times can be short. OEM manufacturers try to keep designs on hand for as many parts as possible, including older parts no longer in production. This means they can often find blueprints for needed parts immediately and start production right away.
What about when existing designs for necessary components aren’t available? OEMs offer quick turnaround, even when working with original designs from their customers.
OEM companies know they exist within a highly competitive market. They’re careful to make sure their customers are satisfied with their services.
4. Excellent Support
OEM manufacturers work directly with their customers. When you contact your manufacturer, you have the opportunity to speak with an engineer responsible for your product. This means OEM customers have a wide range of technical and engineering support.
OEMs work closely with their customers to ensure each component works exactly as intended. Precise manufacturing is key, so manufacturers go above and beyond to meet customer demands.
Not only that, but OEM companies often offer excellent warranties on their products. If you should ever get a part with any defects, your manufacturer should make it right.
5. Return on Investment
The most important part of any business endeavor is getting a return on your investment. Original equipment manufacturers make it easier for businesses to turn a profit with their products.
OEM parts are specifically designed from the ground up to fit their applications. This means the functionality and lifespan of OEM products are usually excellent. As a result, businesses working with an OEM can expect to save money and reduce downtime in the long run.
Most importantly, your own customers will be far more likely to have a good experience with your products.
Get Started With OEM Manufacturing From Shield Works
And there you have it: the top five benefits of OEM manufacturing, from quality to ROI. As you can see, a business can’t go wrong when choosing to work with any OEM manufacturer.
Not all OEMs are created equal, however. That’s why you should seek out the best, whether you need OEM barrel manufacturing or are looking for a great OEM PC manufacturer.
Whatever your OEM needs, Shield Works has your business covered with some of the best features and services in the industry. Contact us today, and let’s start taking your business to the next level.
If you have decided to outsource production to China, you must find a reliable contract manufacturer to partner up with. They can make or break your business. During your search, you’ll come across the terms OEM and ODM. You must understand these unique business services before contacting a manufacturer. In this post, we evaluate OEM vs. ODM manufacturing to help you choose the right producer to meet your needs.
OEM vs. ODM Meaning: What is OEM Manufacturing?
The abbreviation OEM stands for Original Equipment Manufacturer. It means that the production factory manufactures products as per the design specifications provided by the original company. An OEM firm plays a purely manufacturing role in the supply chain, allowing both companies to benefit from their strengths.
In many cases, a firm doesn’t have the resources needed to produce high-volume or highly-specialized goods. Outsourcing production to an OEM company cuts down on costs.
The client usually commissions the supplier to manufacture parts, components, and subsystems according to their specifications. Once the components are delivered to the client, they go through assembly. The client affixes the finished product with the company trademark, and sells it on the market under their name, and at competitive prices.
Common product categories that benefit from OEM production include the automotive industry, electronics, ICT equipment, plastic parts, cosmetics, toys, and garments.
Advantages of OEM
Some of the benefits of OEM vs. ODM manufacturing include:
The cost of producing components is highly competitive due to the economies of scale. Streamlined processes, large volumes, and efficient supply chains in countries like China make OEM components quite cheap. This translates to higher profit margins, increased sales, and more revenue.
Don’t have the right equipment or expertise to create certain components? Take advantage of the specialized technology offered by OEM manufacturers to get it done. This access to better technology and expertise leads to quality products.
Intellectual Property Rights
OEM gives you complete control over the trademarks and intellectual property rights. This allows you a better bargaining position, which makes it easier if you ever need to switch suppliers.
Disadvantages of OEM vs. ODM Manufacturing
The main disadvantage is that there is a limited selection of OEM suppliers for specialized items. This doesn’t allow you a good opportunity to capitalize quickly on innovative or new products. Requesting product samples can help circumvent this issue.
Many OEM suppliers prefer dealing with companies that can create a lot of demand. As such, this may not be your ideal route if you can’t sell goods fast.
There is also the risk of infringement of your intellectual property rights. The designs you create for components could be sold to competitors.
You cannot rely on OEM suppliers to troubleshoot or correct any faulty designs as they manufacture products based solely on the data you provide.
OEM vs. ODM Meaning: What is ODM Manufacturing?
The abbreviation stands for Original Design Manufacturer and refers to companies that design and manufacture products. The products are then sold to other companies, which rebrand and market them as their own.
ODM manufacturers produce goods in bulk. This allows smaller companies to benefit from the expertise of the manufacturing firm and economies of scale.
ODM companies are categorized under White Label & Private Label Production. White label suppliers distribute generic finished products to different retailers who sell them as their own. Private labeling firms sell finished products exclusively to a particular retailer.
Product categories that benefit heavily from ODM manufacturing include cosmetics, food, electronic cigarettes, consumer electronics, medicine, and clothing. Many supermarkets with their range of basic items share the same ODM supplier.
Advantages of ODM Manufacturing
Top benefits of manufacturing ODM vs OEM you should consider include:
Speeds Things Up
ODM companies don’t have to worry about researching, developing, and testing a product. They already did that a long time. All they have to worry about is rebranding an already made product to be uniquely linked to your firm.
Cheaper than Manufacturing Your Products
Designing and testing the effectiveness of a product requires capital and time. Partnering with an ODM manufacturer saves that much more money and allows you time to focus on the core aspects of your business.
Reliable and Tested Products
Depending on how complicated a product is, certification is required before it goes to market. ODM manufacturers handle all the quality inspections and testing and obtain product certifications long before you place your order.
Disadvantages of ODM Manufacturing
Working with an ODM manufacturer makes it difficult to stand out from the competition. The same product you purchase will be sold to other companies, with minimal variations. Unless you get creative with marketing or are a well-known brand, your product will get lost in the crowd.
If you do manage to kill it in sales and customers request an upgrade, convincing your ODM supplier to help you will be tough. Many ODMs aren’t quick to develop new products, especially if it calls for a partial or full redesign.
The intellectual rights belong to your supplier. As such, you’ll never have complete control over any legal decisions regarding the product, or who else the supplier sells to.
ODM vs OEM Manufacturing: What’s Right for Me?
The main difference between OEM vs. ODM lies in the approach to product development. This poses obvious implications for you as an importer in terms of lead time, IP ownership, and costs. Let’s take a closer look at a comparison between the two:
- There is no difference in price per unit
- Product development takes 1-8 months in OEM and 1-4 weeks in ODM
- Injection molds and tooling is paid for by OEM buyers and ODM supplier
- Both offer mass production
- The buyer provides the product design in OEM while ODM manufacturers handle product design
- OEM buyers and ODM suppliers own the intellectual property rights
Whether working with an ODM or an OEM works for you depends on your product, market, and goals.
OEM vs. ODM: Contact Shield Works to Learn More
Whatever your business model, outsourcing production can improve the efficiency of your supply chain and spark business growth.
Shield Works provides reliable precision assembly services that you can rely on for increased output and enjoy the benefits of product assembly in China. Contact us today to learn more about OEM vs. ODM manufacturing.
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.
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.
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.
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.
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.
Studies show that about 66% of large businesses and about 29% of small ones outsource services for different reasons. While you may prefer to complete all your company’s work in-house, this may not always be possible. As the demand for your products grows, you may find it hard to keep up. Besides, you may lack the right skills and equipment to produce enough products to match the increasing demand. By outsourcing your assembly line production services, you can boost output and grow your business.
Here, we discuss the five top benefits of hiring another company to assemble your products. We will also explain how you can improve productivity and ease work by sub-contracting.
1. Reduces Costs
One key benefit of outsourcing your assembly line production services is that it can help you reduce costs. Most firms report that they experience at least a 15% decrease in the total cost by hiring another party to offer their services or produce goods.
Some of the expenses you can reduce by subcontracting are raw material sourcing and training employees. You will also reduce the cost of labor since you will not need to hire many workers for production and packaging.
Outsourcing can help you reduce the amount of money you spend paying for facilities like warehouses. Instead of storing assembled products in your company’s premises, the sub-contracted firm will keep them. They can then ship the goods from their location when a client places an order.
Maintaining equipment can be expensive and sometimes lead to reduced production. When you outsource assembly services, you will avoid such expenses. Since most of these firms have a large pool of equipment for different uses, you will not have to stop producing goods due to maintenance.
By cutting down the total costs, you can then direct more money into marketing and getting more customers. Also, you can hire more skilled workers in other departments. Such may include customer care, operations management, and information technology (IT).
2. Allows the Company to Focus on Other Operations
Another benefit of subcontracting assembly line production services is that it allows you to put more effort into other business areas. Instead of hiring workers for production, you can focus on getting those with other needed skills.
These may include employee management, strategy marketing, public relations, financial forecasting. Focusing more effort on these areas will give you a clear understanding of the target market. It will also allow you to observe market trends and make better decisions.
Other than that, your managers can direct more time and resources towards improving the skills of your employees. For example, they may conduct training and development sessions to help workers focus on the primary goals of your business.
Such measures can motivate them to develop more creative ways of running the business and getting new clients. Putting more funds into training can also reduce employee turnover and the cost of hiring more workers.
3. Improves Quality
A minor mistake in production can cause secondary damage and lead to more losses. For instance, using the wrong quantities of ingredients can affect the quality of the end product. It may also cause the machine to break down and lead to the loss of raw materials.
Outsourcing an assembly production line can help you avoid such mistakes and improve the quality of your goods. This is because firms that focus on production always hire employees with specific skills.
These experts have enough work experience, which allows them to notice a production mistake faster. They can then come up with ways to correct it before it causes further damage and losses.
Another way outsourcing product assembly can improve quality is through control. Firms that offer these services always test the strength and durability of manufactured products. This measure allows them to regulate the standards of each batch.
Once the manufacturing experts notice that a product is below the needed level, they will mark it as a reject. After that, they can check what went wrong and develop measures to correct the mistake. Such precautions will protect your firm from selling low-quality goods and help you maintain clients.
4. Allows You to Customize Products
Customization can improve efficiency and help you make goods designed to address specific needs. Tailor-made products are also more marketable and will allow your brand to expand into untapped markets.
Still, creating custom products calls for detailed research and testing. You may also need to use specific tools to create the desired outcome.
By outsourcing assembly line production, you can avoid most of the issues that may arise when creating custom goods in several ways. For example, the partner firm can create a better product because they know the production methods your competitors use.
Besides, they can liaise with your employees and selected consumers for a pilot launch to assess the pros and cons of the new model. They will also perform various durability and environment tests for quality assurance.
These processes allow them to identify defects and come up with ways to correct them before mass production.
5. Improves Organization
Keeping track of various processes can be challenging when you have a big company. You have to follow up on raw material sourcing, goods production, and distribution.
At the same time, you need to market new and existing products to maintain and gain more customers.
When you have so much work, you may neglect some tasks, which will affect performance in the long run. Luckily, an assembly line production company can also provide related services packaging.
Their warehouses are also safer for storage since they have designs that suit specific products. With their services, you will smoothen work by having a clear business process flow chart.
Storing goods in their warehouse can also make it easier to supply to your customers. Once the firm makes the goods, they do not need to ship each batch to you. Instead, they can hold some and send them to clients who are near their locations.
This way, you ensure that customers get their goods in time and save money that you would use in transportation.
Contact Shield Works Today for Assembly Line Production Services
Collaborating with another company for assembly line production can improve efficiency and help your business grow. At Shield Works, we provide reliable precision assembly and warehousing services.
We communicate with our clients daily, allowing them to follow up on the whole production process.
By partnering with us, you can increase output and enjoy the benefits of China-based manufacturing while saving costs. Reach out to us today for reliable assembly-line production outsourcing.
OEM manufacturing is a part of most people’s lives, whether they realize it or not.
The products that people use in their daily will have parts from OEM manufacturers. These include automobile, electrics, and computer software products that benefit from OEM manufacturers.
In this article, we’re going to take a deep dive into the world of OEM manufacturing. So take a seat, buckle up, and enjoy the ride!
An original equipment manufacturer (OEM) is a company who manufactures parts to be used in another companies’ products. The purchasing company then sells the end product to the consumer.
Take, for example, a car that’s driven daily. An OEM manufacturer is the one that manufactures parts such as the steering wheel or tires that are then assembled and sold to individuals.
Traditionally, OEM manufacturers have only dealt with business-to-business transactions. Recently they have been selling directly to consumers with the help of the internet. Say an individual consumer wants to buy a graphics card. They can then purchase the graphics card directly from the OEM manufacturers or retailers with the OEM product in stock.
Like OEM manufacturers, contract manufacturers also develop products based on their client’s designs. However, contract manufacturers have the added benefit if a company wishes to expand its range of products.
A company looking to hire a contract manufacturer typically has a design or a formula for the product they want to sell to individual consumers.
One example would be a cleaning supply company. They would hire a contract manufacturer to produce the product according to their design, then throw on a private label specific to them.
Some contract manufacturers also provide warehousing options. This means that they can provide services including:
- Manufacturing the product
- Storing the product
- Shipping directly to the consumer
In today’s globally connected world, the services above become a valuable part of any profitable business plan.
Working together with a contract manufacturer has an added benefit – giving the business owner more time to focus on customers rather than worrying about their supply chain.
Benefits of OEM Manufacturers
Working with an OEM Manufacturer in China has its advantages that blow its competition out of the water. Here are some of the most important.
Manufacturing in China has been a practice that is recognized not only in the U.S. but also globally. The main reason for the recognition is the significant decrease in production costs. The advantage is competitive pricing. This enables the selling company to decrease the product’s price while maintaining a higher profit margin.
The competitive pricing that OEM manufacturers located in China provide makes working with them ideal. The higher overhead costs of domestic OEM manufacturers only lead to higher prices for both parties.
The fact that OEM manufacturers in China produce goods for companies globally is a well-known fact. Due to the demand, these manufacturers can scale their production well beyond any domestic company for a fraction of the price.
Limited storage space is a problem for many small business owners and companies. But it’s a problem that OEM manufacturers in China with warehousing services solve. Specifically, warehouses that can provide next-day shipping.
Let’s say a company wants to expand its products or dip its toes into a new market. An OEM manufacturer in China or contract manufacturer can develop the product line for the company with a quick turnaround.
Several well-known companies contract out their production of parts to OEMs. However, they assemble their final product themselves. Unfortunately, this isn’t always possible or even profitable for smaller businesses.
Contract manufacturers provide another solution to a problem here. Some contract manufacturers provide assembly services in addition to manufacturing, warehousing, and shipping. Thus, they are essentially an all-in-one shop.
Some people tend to think that products made in China are of lower quality because the cost to produce is so low. That’s not the case whatsoever.
A large majority of these OEM manufacturers have been implementing the same production process for decades. This makes them experts on that process. Many companies and small businesses make the costly mistake of attempting to produce a product on their own. That mistake doesn’t make sense when they have the option to contract an OEM manufacturer in China with decades of experience.
Another benefit we want to discuss also has to do with the cost-effectiveness of OEM manufacturers. For example, say a company wishes to produce its product domestically.
This means that a large part of their investment will have to go into the factory as well as the purchase of expensive equipment. It also includes the added cost of raw material prices fluctuating in the market. Yet, manufacturers in China can mitigate the risk. The OEMs lock in costs per unit over a fixed period. This protects them against fluctuations in currency and raw materials costs.
Disadvantages of OEM Manufacturers
Working with OEM manufacturers is not all roses and sunshine. However, the disadvantages discussed below can be avoided with proper research.
The most apparent drawback of working with an OEM manufacturer overseas is the lack of complete control over the final product. The lack of total control can be mitigated by building a relationship with the manufacturer. This entails clear, consistent communication from both parties.
An international agreement entails two different legal systems. Before signing a contract, a company must understand which legal system the contract falls under.
In addition, culture and language differences are also a cause for concern for many business owners.
Despite the disadvantages, companies looking to work with an overseas OEM manufacturer can avoid the risks. Proper research is a vital step towards a fruitful relationship.
Change the Game
Shield Works is a 100% British-owned and managed company headquartered in China with offices in the U.K. and the U.S.
We are the one-stop-shop for all your OEM manufacturing needs. We provide a range of services, including assembly, manufacturing, warehousing, or management needs. That’s in addition to any other custom services you require. To better serve our clients, we leverage our C2W membership to provide supply chain services as well.
Get in contact with us to change the game.
Did you know that the assembly line has been around for centuries? It is technically an age-old method that is so effective we still implement its uses in the year 2021. Product assembly consists of a line of workers, each with a designated job, to ensure that a product’s parts secure correctly before going out on the market.
These products could be anything from ketchup bottles to your newest technological gadget. If you are a business that makes mass-produced items, you should consider an assembly.
But is it worth it for your company? If you want to know the answer to that question, keep reading our guide for the pros and cons of product assembly in China.
Pro: Mass Production
Chinese assembly lines produce nearly 50% of the world’s goods and products. Mass production was one of the leading factors that brought China into industrialization in the first place. It is one of the main pros of product assembly.
Let’s say your company produces a few hundred, maybe one-thousand, products a month. By choosing Chinese assembly services, you and double, even quadruple that amount per month.
Your product numbers would soar. You would be able to meet your client’s needs more efficiently.
Pro: Improved Profit
Your numbers would increase dramatically with an assembly team from China. These professionals would ensure that you receive mass amounts of your product as soon as possible.
That way, you can keep up steady production and re-stocking methods. The more product you have on the shelves, the more sales you will likely receive. Down the road, assembly lines will save you money while increasing your profits.
Pro: Product Uniformity
When a product is popular, you want every piece to look like the last. People do not buy things like new technology for their uniqueness.
Many want items like that because they enjoy the design and how they look. If you create your product on your own or with a small team, there is no guarantee that every item will be the same.
However, with an assembly line, you can count on uniformity. That will save you the headache from angry client calls complaining about the aesthetic state of their product.
Pro: Upgrading Benefits
If you compared product assembly from decades ago to where we are now in 2021, you wouldn’t recognize anything. That is because assembly lines benefit from upgrades.
Manufacturing teams constantly employ things like new systems or materials to improve efficiency over time. With every upgrade, the process improves. So, you don’t have to worry about time issues when you put in an order request.
Pro: High-Quality Products
With Shield Works Assembly lines, we implement a quality-first approach. That means we have methods to ensure your products are of the highest grade possible.
Nowadays, most assembly lines hire quality inspectors stationed at the end of the manufacturing process. These professionals check the final products for issues like defects and deformations.
They also ensure the products look alike, so everything you order is identical. With our quality control at hand, we can identify any major flaws before shipping your products to you.
If there is something wrong, we will fix each item. That way, you don’t have to worry about receiving anything less than perfect.
Con: Labor Issues
Assembly lines provide monotonous work for employees. As a result, it is hard to find people who want to work a job like this for eight or more hours. When people work for product assembly, they essentially stand in one place and perform one task all day.
That task could be something as simple as ensuring a machine screws a top on straight. On top of this, the buildings for product assembly present dangerous worker conditions.
Many people experience severe injuries and maiming due to machines. They can also suffer from health issues if there is dust, dirt, or mold present. That’s why it’s critical to choose a company that promises a safe and comfortable working environment.
Con: High Start-up Costs
You will spend a decent amount of money at the beginning of your product assembly venture. Sure, they do help you make more money.
But to begin with mass manufacturing, be ready to pay for start-up costs, employee labor, and factory space.
Of course, this is true of everything you begin in business. Keep in mind that everything in business takes money to make money!
Con: Requires Strategic Thought
Never decide on something without giving it any strategic thought. That will lead to complications down the road. When it comes to OEM manufacturers in China, you have quite a few things to consider.
You want to think about things, like what materials to use for your product. You will also have to consider the methods the team implements and even the shape of the assembly line. For instance, some people prefer a u-shaped line because it adds to the manufacturing efficiency.
Hire Product Assembly Services in China
As you can tell, there are several pros and cons of employing product assembly in China. However, the pros do outweigh the cons because you get more products on a speedier schedule.
Your company will boom once you hire a product assembly service.
We hope this article helps you make an informed decision for your company. If you require assembly services, then look no further than the China team at Shield Works.
Feel free to contact us. We are happy to answer any questions and get you started with OEM assembly today.
Have you ever thought to wonder about outsourcing your business internationally? There are quite a few benefits to outsourced manufacturing, especially during the last few decades. One of the main benefits is how cost-efficient it can be for businesses, thereby allowing you to save money and resources while providing a living to skilled individuals.
Another benefit to outsourcing is that your business can provide specific solutions to specific issues for your customer and give you a wide range of tasks to delegate. This gives you the time and energy to focus on the core of your business without worry.
Finding experts in their trade is yet another positive in the realm of outsourcing. You can find a whole host of people skilled in their craft and willing to provide that expertise to your business.
There are many different industries that are benefiting from outsourcing their manufacturing. Interested in learning more?
Keep reading, as we’re going to show you why you should consider it and the reasons to outsource.
Outsourced Manufacturing In Retail
Though considered to be at the bottom of the distribution chain, retail can gain as much benefit from outsourcing as any other company. As a result, the practice can boost profit margins and cut costs to customers by outsourcing for cheaper alternatives to products the store already carries.
Benefits include multi-channel customer support, through phone, email, live chat, and social media. And outsourcing, in turn, assists with multiple customer inquiries across the many channels at once.
Retail outsourcing can also gain flexibility in staffing needs during busier seasons. And the extra staff takes some of the burdens of the heavy workload when numbers are high and questions need to be answered quickly.
Another great benefit to outsourcing is data analysis and collection in retail, such as online shopping. The results include showing which items are most popular to the items that are mostly being returned, supplying valuable feedback.
Overall, the process comes together to create a better customer experience, able to handle a variety of customer problems, and the likelihood of resolving those problems becomes very high.
Up Next With Pharmaceuticals
Manufacturing in pharmaceuticals is yet another way that outsourcing can benefit important, essential companies.
Outsourcing provides a wide spectrum of services like preclinical development, drug discovery support, contract manufacturing, and clinical trials. Outsourcing helps the world of developing medicine go quicker and easier.
Pharmaceutical and biotech companies receive outsourced assistance in the care of sick, elderly, and everyday consumers to maintain their health. This results in securing a trusting partnership for the ultimate good cause.
The end result of outsourcing is saving money in bringing in medicine, and for the consumer to not have to spend so much to take care of themselves.
Tech & Software
Did you happen to know that manufacturing domestically is more expensive than outsourcing it? Not a lot of people do.
Saving costs is the top reason most tech companies usually outsource to either China or India. They outsource due to the lack of raw materials available as well as lack of sufficient labor in the US.
In a nutshell, that means that saving money on manufacturing has the added benefit of also saving money for the consumer. Essentially those software companies save on costs and as a result, so do their customers.
The resulting experience is that everyone remains happy in the long run.
Time Is Definitely Money
In the current US economy, being a one-stop-shop for all of your business needs is now more of a pipe dream than anything else.
Unless you’re running the smallest business known to man, outsourcing is not only a wiser choice but a smarter one, too. The result helps you create profits and growth even in hard economic times.
One of the main benefits of outsourcing is obviously saving money on company costs which results in even longer-term cost reductions and ensuring the survival of your company.
Time is money and you don’t want that time to cost much of that money in manufacturing stateside, and it allows you to spend more time creating and less time stressing.
Focus On The Important Stuff
Snowballing from the section above, being cost-efficient in the long run can have a positive effect on your company when you outsource. Namely, allowing you to focus on the company you’ve worked so hard to get off the ground.
Saving money is important, but so is taking care of your business, free of unnecessary headaches that extreme worry about costs can bring.
Savings can increase sales and revenue, giving you the time to focus on core areas of your house. Those areas being marketing, research, and development, instead of being concerned if your customers aren’t getting the service they need.
All in all, outsourcing contributes to a bigger, more robust bottom line for you and your workers. Saving you the money and hassle for a hopefully long time.
Being More Efficient
Another outsourcing benefit, aside from saving on costs, is definitely finding experts who are masters at their trade. Thus, ensuring that all of your bases are covered when it comes to customer service.
Any outsourced expert who can do their job the best is naturally very useful to any company worth their salt in providing a quality product for their consumers.
If you want all your customers to receive answers to any query they pose, having someone with proven expertise is always pivotal. Outsourcing lessens you of all the stresses of whether your people have all the necessary answers at hand.
Less stress, along with increased productivity and efficiency contributes even more to your company’s bottom line. And it gives you more confidence in the resources you acclimate along the way through time.
The main point here is that having outsourced experts on the payroll is a setup for all kinds of success in the future.
Check Us Out
We hope that this has been a more than interesting read for anybody wanting to try outsourced manufacturing in the near future.
Why not start here, at Shield Works?
We can help you with any outsourcing knowledge you need as well as provide you with our company expertise to assist you in your outsourcing. As a result, it allows you access to our resources to walk you through outsourcing for your company.
Whether you need answers to your questions or simply want to acquire our services, please check us out right over here. Can’t wait to hear from you!