What Can OEM Manufacturers Provide You With? A Closer Look
The OEM industry ships over 1.9 trillion dollars of goods every year, huge right? There are plenty of reasons this type of manufacturing is so popular.
OEMs (original equipment manufacturers) are an essential component of modern industrial production. Whether you’re considering a phone, car, or even your beauty products, chances are they contain OEM products inside them.
The majority of the things we use daily come with OEM parts. However, these enterprises primarily operate in the B2B sector. This means most consumers are unaware of their importance.
OEM manufacturers may save money and time. Third-party components allow a company to focus on its primary business. They no longer need to focus on each secondary or internal item.
If you want to learn more about OEM, read on.
What is an OEM, and How Does It Work?
Initially, the term Original Equipment Manufacturer (OEM) referred to a firm that sold equipment to another company for resale or incorporation into their equipment for sale.
The term “OEM” currently refers to a product obtained by a firm to reuse or incorporate into another product under the reseller’s brand name.
This could mean the entire product is from an OEM manufacturer. The end business simply labeled the product with its branding. Alternatively, the OEM parts are a few components inside a product.
The OEM is the firm that creates subsystems or components that other companies utilize to make the final product. For example, not all of the features in a Lenovo laptop computer are made by Lenovo. Some components, such as the CPU or memory module, may be the work of an OEM.
OEM manufacturers are not the same as value-added resellers or VARs. A VAR is a corporation or organization that purchases an OEM component, part, or product and either enhances or adds extra details. They do so to raise its value before selling it directly to customers.
VARs and OEMs collaborate. OEMs create sub-assembly parts for VARs to sell. Some OEMs produce entire things for VAR distribution, meaning they directly influence the final result.
For example, if your product can handle medical problems, a VAR may bundle it with other goods for health providers.
Why is OEM Important?
A manufacturer or reseller can cut expenses by cooperating with an OEM. Companies are not required to construct manufacturing facilities or manage OEM manufacturing in-house.
They incorporate OEM components from China, India, or other countries with cheap manufacturing.
Typically, the cost savings pass on to the client who purchases the bundled product or system.
Managing many products, systems, and providers may be difficult for the end-user. The technical support and maintenance model expands dramatically when an organization embraces new technology. There might be dozens of OEMs and third-party companies servicing their hardware products.
Companies can decide to involve a third party to connect with and maintain relationships with OEM manufacturers. This makes the process smoother. A consolidated support and service approach helps many firms decrease OEM and vendor complexity.
How is an OEM Product Developed, Partnered With, and Resold?
Before offering a product to end-users, businesses determine the best strategy to meet the demands of their consumers.
By collaborating with an OEM manufacturer, a company may:
- Decrease manufacturing investment
- Decrease production costs
- Decrease material expenses
- Obtain knowledge in product design
- Have a shorter production life cycle.
- Still develop products employing best-of-breed components
- Focus on branding
OEMs can add everything to the product and brand it with their logo. Other OEMs merely supply components and do not sell products under their name. However, many businesses do both.
These items are often available for purchase straight from the firm as well.
The OEM Manufacturer Sector
In the hardware sector, an original equipment manufacturer (OEM) is a firm that creates a product for end customers, such as a PC, laptop, or printer. Original equipment makers include Apple, HP, Dell, Canon, and Brother.
On the other hand, OEM hardware refers to the components that comprise the items mentioned above. It includes CPUs, fans, motherboards, memory chips, hard drives, and other features. Companies that manufacture these components offer them to OEMs as OEM hardware.
The hardware sector of the computer business is even more well-known for OEMs. Hard drives, graphics cards, and CPUs for retail goods are built by a small number of firms, with market leaders such as Intel dominating.
For example, hard drive manufacturers provide bare hard drives for OEM customers. they also provide retail hard drives that come in a box with peripherals such as cables and installation instructions.
OEM hardware is often less expensive than retail versions. However, there are certain drawbacks. Most OEM hardware lacks customer support. It also has limited guarantee terms and is not easily integrated with other components of whatever system you’re building.
DVD drives, for example, may be missing cables or ribbons that connect to the motherboard.
It is because OEM hardware is primarily built for resellers. Those manufacturers must include:
- Warranties
- Technical assistance
- Other components when constructing complete systems
Other OEM Physical Products
There are tonnes of other industries that OEM products. These include but aren’t limited to sectors such as:
Machined goods – OEM manufacturers can often build parts to scale, these can include things like shims, nuts and bolts, rotors, and other metal or plastic components for machinery.
Auto – Car companies do not build every single part of their car in their factories. They often use OEM manufactures for computer chips, audio components, door trims, etc.
Tools – Whether we are talking household or industrial tools, OEM parts are frequently used. Motors, drill bits, and casing are all examples of how tools use off-site manufacturing.
Household products – You may be surprised to find that many of your branded household products are actually OEM or contain OEM parts. Everything from pottery, to TVs and kitchen appliances, may use this industry to drive costs down.
Beauty products – Many beauty companies do not make containers for their product, they often have them shipped in from an OEM manufacturer.
Musical instruments – Piano wires and guitar strings, tuning pegs, piano keys, and any other small part on musical gear are often OEM manufactured.
Original Equipment Manufacturers (OEMs) Provide Replacement Components and Spares
Some parts of all products are more prone to wear and tear than others. Companies frequently maintain a continual supply of vital spares on hand for their essential assets. These stockpiles get renewed regularly.
OEMs are the most outstanding providers of equipment parts and replacement components.
OEMs Provide Aftersales Assistance as Well as Maintenance and Repairs
On top of quality testing, certain OEM providers may also provide continuing maintenance services. They do so as part of an after-sales support package. When working with highly specialized equipment, the on-site maintenance personnel may lack the essential skills or instruments to perform the necessary maintenance tasks.
The maintenance contract determines the cost of these services.
Keep in mind that many OEM manufacturers do not offer all of the above services. Choosing vendors that do not provide enough documentation or a consistent supply of spares might raise your maintenance expenses and increase the risk of unplanned downtime. When selecting maintenance contractors, make sure you conduct your research.
OEM Vs. OE Parts
OE is an abbreviation for Original Equipment Manufacturing, the same as “OEM.” Both OE and OEM components are equivalent since they are manufactured following exact requirements. The only difference is that a different company manufactures the OE components.
Consider an OEM automobile component for a Mercedes made in-house by the firm. The OE variation of the same element might come from a Mercedes-licensed auto parts subcontractor, such as Hella Behr.
The genuine Mercedes logo will have the same build quality and dependability as the original product. OE spares are often less expensive than OEM spares.
OEM Vs. Aftermarket Parts
Aftermarket components are produced by firms that are not affiliated with the OEM. Various companies are active in manufacturing aftermarket replacements for OEM spares, particularly in the automobile sector.
Moreover, aftermarket components have a lot of appeal since they may be up to 60% less expensive than OEM or OE parts. However, that cost comes with significant drawbacks regarding quality and dependability.
OEM/OE spares from various vendors will provide a comparable degree of dependability. However, you do not have this warranty with aftermarket components. There are many possibilities from obscure producers with wildly varying quality.
Some high-priced aftermarket solutions provide performance and durability equivalent to OEM parts. Unfortunately, this is an exception rather than the rule. The great majority of low-cost replacements have a short guarantee and are of poor quality.
It is preferable to use OEM/OE components for essential purchases.
How are OCM and OEM Parts Similar?
OCM components are another sort of named part that appears, particularly in foodservice maintenance. Components distributed through equipment manufacturer networks and authorized service providers are generally known as OCM (Original Component Manufacturer) or direct source parts.
These are the identical parts used in the original equipment. It implies that referring to a component as an OCM part is practically synonymous with referring to it as an OEM or OE part.
OCM components are also known as original parts. In many circumstances, the term “original parts” refers to OER components (original equipment replacement parts) and may not be identical to OEM parts.
Why are OEM Products Less Costly?
OEM products are often less expensive due to economies of scale. Because the firm collaborates with others to produce huge quantities, both the price and the manufacturing time significantly decrease.
When you buy a product from an OEM, you should always double-check what you’re buying. While the goods are less expensive and provide the same features and performance, you may not receive some “extras” such as tech support, generally handled by a retail business.
What are Genuine Parts?
Genuine components are typically leftovers from previous production runs. The OEM packages and resells them as replacement components.
Genuine replacement or genuinely made components vary slightly from genuine parts. Genuine replacement parts are typically available after a product’s production run. But they are not leftover components.
They are usually the same or equivalent to the original OEM components. Usually, they’re manufactured by the same OEM parts source.
Genuine replacement parts, in many aspects, are similar to any other spare parts. They are supplied by the maker of the original finished product. Even if they are not identical, they are more likely to be of the same quality as OE components.
Benefits of Purchasing OEM Products
There are some across-the-board benefits you will have when you buy OEMs. These include:
Good Quality
An OEM product is the same as the original manufacturer’s product. Although there are less expensive alternatives, the price of the OEM product reflects its quality.
Durability
Such things are often not just of high quality but also long-lasting. For example, when purchasing a spare tire, an OEM tire is usually preferable to an aftermarket tire since one can be sure of the materials utilized in its manufacture.
Lifespan
OEM parts often last longer than aftermarket parts. They are also designed to fit with the end product from the start.
Move Forward with OEM Manufacturers
Do you need manufacturing services but don’t know where to look? Relax! Our OEM platform Shield Works is here to help you get started.
Now that you know what OEM manufacturers do, check out the rest of our blog to learn more about how we can help your business. Or, get in contact with us today to get cracking on your manufacturing needs.
Why Intellectual Property Protection is Important
Your business’s intellectual property (IP) is essential to your company. You invest a lot of money and resources in your employees and the assets of the business and their resulting creations. The biggest asset you have as a business is the mindset of your talent base, which holds significant business value for many years down the line.
Once your IP is open to the public, it’s easy for other people to copy it. This is why businesses should take intellectual property protection seriously. While you’re not obligated to consider the safety of your business’s IP, it could save you thousands of dollars and a significant amount of time in the future.
Unfortunately, most start-ups and mid-sized businesses often take IP protection for granted. Overlooking this aspect of your business will lead to significant regrets later.
Are you still unconvinced about the importance of intellectual property protection? Read below to understand more about intellectual property protection and why it is important:
What Is Intellectual Property?
IP refers to intangible assets such as ideas that are legally protected and owned by an individual or a company. The property is protected from external use and implementation without permission. An intangible asset is referred to as a non-physical asset that is owned by a person or a business.
The main concept behind intellectual property is that certain products of the human intellect should be legally protected and owned in the same way as physical properties. Most countries with developed economies have strict rules to protect these forms of property.
There are several types of intellectual property, including:
- Trade secrets
- Franchises
- Trademarks
- Copyrights
- Patents
Intellectual property is owned by the creator of the work, or by an individual deemed the owner. However, this can differ in certain circumstances where different types of intellectual property ownership are determined differently.
For example, if an idea comes from an employer, they become the owners of that IP. However, if it comes from an employee under contract, it can be registered under the employer. Keep in mind that IP ownership is transferable from one individual to another.
It Protects Your Exclusive Rights
IP protection gives your business exclusive rights within the jurisdiction where it’s registered. This means you will have the right to your design, brand name, and invention. The good news is that other people can’t directly benefit from your IP or reap any financial benefits from counterfeits of your brand.
IP protection also helps you protect your business from reputational damage, often caused by malicious people producing substandard products in your name. This gives your business the competitive edge it needs to compete with even major brands on the market.
It Prevents Other People from Using Your Goodwill and Branding
Crafting, protecting, and maintaining a great online and offline brand is a costly endeavor for most companies. Therefore, it’s essential to take the right steps to protect your brand and ensure it’s not at risk. Make sure you get started immediately when establishing your brand.
Most businesses often make the mistake of waiting until they have a larger budget to put in place IP protection. This is a mistake that could cost you thousands of dollars. This is because most of these businesses often forget about the process until someone else steals their IP.
The first step towards protecting your intellectual property is registering it. Ensure you register your trademark, invention, or design to protect your company’s unique identifiers. Through this, you will be taking active steps towards protecting your business’s distinct personality and discouraging other individuals from using it.
As such, if anyone tries to use your business’s registered IP, they will likely be infringing on your rights. This means you can sue them and claim intellectual property infringement.
Therefore, you can defend your company’s rights to use the IP and take the other party to court. You can even receive damages from the infringing party or a percentage of the profits they made in the infringement process.
It Adds Value to Your Property
Are you looking to stay ahead of the curve in the assembly and manufacturing industry? Then obtaining your IP rights is the first step to doing so. Securing your IP rights will proactively increase your company’s market share.
It can also help you win your customers’ loyalty by keeping them loyal to your brand. Your company logo, name, and the products or services you offer your clients are fundamental parts of your branding. This is what sets you apart from your competitors, making your business stand out.
Therefore, it’s essential to make sure your business uses these intangible assets to get ahead of the game by protecting them. Different intellectual properties and creations can be protected in varying ways. With the right advisors and team, it will be easy to efficiently protect your IP at each step of your business’s development stage.
Intellectual Property Protection Helps You Raise Money
Intellectual property protection can create a profit-generating asset for your company. This means you can raise money by selling your IP or licensing it.
When you own the intellectual property rights to a brand or a creation, you have the freedom to use it however you want. You can even transfer the rights to other companies or individuals. This can be an extra revenue stream for your business through earning royalties by licensing your IP or selling the rights to another individual.
Knowing how to fully take advantage of your IP is essential to protecting your IP. Some financial institutions highly regard IP rights, and they can be a form of security for numerous loans in some cases.
It Protects Business Growth
As a small business, it’s essential to protect your company’s unique services or products that you own. In some cases, competitors use other businesses’ success to take away a chunk of the market share. It results in reduced revenue and slow business growth.
Losing your market share early in the company’s development stage can be quite overwhelming and devastating. It’s also stressful and time-consuming to start chasing the guilty party if you don’t have any legal protection. This could result in losses and even business closure if not appropriately handled.
Keep in mind that no one else is responsible for checking if your IP has been infringed. You should always check to ensure that no one else in the market uses your assets to make a profit or discredit your brand. Even major companies have had to deal with IP infringement at some point in their development journey.
Protecting intellectual property is directly related to your business growth. It’s the only way to ensure that your business is protected throughout the development stages.
It Protects and Secures Your Business Ideas
When you have a unique and great idea for a service or product, there are always individuals who will try to duplicate and sell the idea as their own, making a profit in the process. Depending on your circumstances, you could use trademarks, copyrights, or patents to protect your ideas. All these are instrumental in covering different areas of intellectual property.
Without proper consent, IP protection can help you prevent your competitors or any other individual from making a profit from your ideas. This protection should apply to companies of all sizes.
We have all seen billion-dollar companies having their ideas infringed upon, which leads to costly lawsuits. A great example of this is the Samsung-Apple dispute about their smartphones.
IP Protection Is an Easy Process
While the intellectual property protection process may seem daunting, stressful, and time-consuming, it’s easier than most people think. Likewise, the time, effort, and resources you use to protect your IP are well worth it.
While it’s not feasible to protect the idea by itself, you can secure the processes and means by which you put your unique idea into operation. This is what you will protect using IP.
On the other hand, copyright doesn’t require any actual registration procedures. That’s because the protection is automatic and free. While copyright doesn’t protect your idea, it will cover how the concept is presented, for example, on flyers, websites, presentations, and brochures.
If you’re looking to protect your intellectual property by registering a design, applying for a patent, or trademark, you can do this through your local intellectual property office. You can do this on your own or with a solicitor.
Contact Us for Intellectual Property Protection Today
Do you have a company in China? If your company doesn’t file its patents, trademarks, or copyrights in China, the IP will have no formal protection. Contact us today at Shield Works for all your intellectual property protection needs in China.
We work with a top Zhuhai-based IP industry expert to offer our clients IP protection services to cover all their needs.
What Is OEM Manufacturing? Everything You Need to Know
Running a business is expensive, especially if you produce complex products on a large scale. Operating out of your office or small warehouse isn’t going to cut it.
Building a full-on factory is super expensive. You also have to consider local labor costs and other technical headaches. The simplest solution is to go with an OEM manufacturing company.
What is OEM manufacturing? It’s partnering with a company that already has purpose-built factories. With them, you can reduce the costs and energy required in making your product.
You can also streamline the process and let your staff focus on more important things. The only thing you need to know is what they are, how they operate, and where to look for good ones. For an in-depth guide on OEM manufacturing and its uses, read on.
Defining an OEM
You may have heard the term OEM but aren’t sure what it means. You know it’s related to large-scale manufacturing and factories, but you want more specifics. OEM stands for Original Equipment Manufacturer.
These companies make and sell goods or parts to other companies to finish the product. Examples are companies that make protective glass for smartphones or car exhaust pipes.
The company that buys the components goes by the designation VAR. VAR stands for value-added reseller. VARs contract or partner with OEMs to build smaller components that go into a more complex product.
The “value-added” part comes from the idea that a VAR will do something to an OEM’s parts to increase the value. The sum of the individual parts gets transformed by the VAR into a new product and then sold for a profit.
The parts sourced and manufactured by OEMs are often small. By themselves, they don’t contribute to the overall value or complexity of the product. For example, an OEM might make the knobs on a car’s thermostat, but they didn’t design the thermostat or the car.
That said, OEMs are far more than manufacturers of simple screws and knobs. By definition, an OEM is anything that contributes to a more complex end product. This means that companies who make computer chips or other complex components can also be OEMs.
They only have to make these on behalf of a second company who will incorporate those parts into a new product.
The Basics of OEM Manufacturing
So what is OEM manufacturing, and how does it work on a basic level? OEMs fill a space in the global market for a variety of goods and components other companies need. These range from specialty bolts and screws to glass screens, electronics boards, and textiles.
Many of these companies might like to make these basic parts themselves. The issue is this is often too cost-prohibitive. Building an entire factory only to make screws for IKEA furniture isn’t worth it.
It’s cheaper and easier for companies to contract the services of an OEM. This is because the OEM has already built and tooled the factory to produce a variety of equipment. All the VAR needs to do is partner up with the right OEM company to fit their needs.
All of the top electronics brands use OEM manufacturing.
Using OEM Manufacturing
There are many ways to use OEM manufacturing. They’ve become a staple of the global economy and have made countless commercial products cheaper. Many of them take advantage of cheaper labor and government investment or subsidies.
Innovations in robotics, warehousing, and assembly line manufacturing all help improve efficiency. These also all come at a lower cost. There is nothing stopping an OEM from operating in developed economies, and many do.
However, using OEMs is most effective when you can secure the highest level quality of components for the most competitive price. This leads to a division of manufacturing operations. Western factories and manufacturers can focus on finishing products.
The automobile industry is a fantastic example. These companies rely on special OEM manufacturers to produce many of their car parts. These include battery and engine parts to electronic components in the entertainment systems.
The finished parts get assembled in the VAR company’s facility. They employ skilled workers to engineer the car, draft the parts OEMs will need to make, and put it together.
This process gets the most out of OEMs to produce high-quality local products. The OEM parts are still high-quality and selected by the VAR. Before seeing use, they also pass all necessary inspections in the reseller’s country.
By using OEMs, auto manufacturers can deliver high-quality vehicles to the market. The costs usually associated with building their own factories or components are gone. The result is consumers get cheaper cars without sacrificing quality.
The Relationship of OEMs and VARs
OEMs aren’t only specific manufacturers waiting for VARs to come along. While many OEMs specialize in specific fields or types of commodities, that’s not all they do. They have to remain flexible to work with as many VARs as possible.
OEMs and VARs work together by having a direct relationship. The VAR has to know exactly what they want, how they want it, and in what form or quantities. The OEM has to listen to these requests and find ways to accommodate them to the satisfaction of the VAR.
Communication, Flexibility, and Customizability
The most important thing in this business relationship is communication. OEMs set up their manufacturing facilities to be flexible but also high-quality. If an OEM factory can make 2-inch bolts, chances are they can adjust to different sizes as well.
The ability to accommodate multiple VARs with specific requirements is key. Quality control is also an important factor. VARs will be clear about proper measurements and specifications.
They’ll also communicate what kind of standard they expect. This is why the OEM needs to work with the VAR to meet these needs. OEM manufacturers sell to businesses, whereas VARs sell to consumers.
This means that VARs take the blame in the consumer market for defective products. Let’s use an example where Levi contracts an OEM to make the zippers or buttons on their blue jeans. It’s Levi that gets raked over the coals if the buttons are cheap or the zipper malfunctions.
The same is true if Samsung uses a faulty OEM part in their phones or TVs. OEMs need to balance flexibility and affordability with guarantees of quality and reliability. Between the two of them, VARs and OEMs need to work together to make sure both sides benefit.
OEMs in the Computer Space
A rising trend in relation to OEMs turning into semi-VARs has been occurring in the PC industry. Companies that design operating software or computer parts have been OEMs. This refers to the likes of Microsoft and Apple and, of course, Intel, Nvidia, and AMD.
The typical relationship would involve Microsoft selling Windows to a company like HP. In addition, Nvidia or Intel might also sell graphics cards and processors to HP. Windows, Nivida, and Intel are OEMs in this relationship, while HP is the VAR.
Companies like HP, Dell, or Lenovo integrate these parts into a finished PC. These are then sold to the consumer. However, with the rise of online ordering and PC building, things are changing.
It’s becoming popular for consumers to buy parts from OEMs like Nvidia or Intel. They can order everything from the graphics card to the wires and even the case online. Because this doesn’t require people to go to third-party retail stores like Best Buy, these OEMs can also function as VARs.
This gives them more leverage over the market. It also gives them more control over things like quality and manufacturing.
Where To Look For OEM Partners
There are a lot of things to consider when comparing OEMs. Cost and quality are important factors, but that’s easier said than done. For companies and VARs, there are two major regions to consider: industrial India and China.
There are, of course, many other options in the developing world to consider. You can also find good quality OEMs to partner within the “Global North,” but costs tend to be higher. India and China have similar strengths, but China wins in several key areas.
The population density in these countries and industrial economic strength are important factors. They have huge skilled workforces, which means a ready labor pool. This is an important consideration since labor shortages, and lack of specialists could choke your supply lines.
Both India and China also have tons of factories to choose from. They rank in the top 5 for having the largest share of global factories. They’re joined by the US, Japan, and Germany, which all have higher labor and operating costs.
Having a large sample size of OEMs to choose from means you’re more likely to find a good and reputable match. That said, a few hidden edge factors make China preferable over any other options.
The World’s Largest Manufacturing Country
China has almost 30% of the world’s manufacturing capacity. This puts them head and shoulders over the US, which sits at second place with 16.8%. Chinese labor is cheaper, and operating costs are lower.
Contrary to popular belief, China produces more than cheap and affordable products. They’ve developed a reputation for innovation in almost every field. They also have a huge number of specialists.
Chinese OEMs are also used to working and communicating with foreign companies. You’ll still need to do your research to find one that meets your needs. However, it’s safe to say China isn’t only the cheapest option; it’s also the highest-quality one.
The Difference Between The OEM- VAR Relationship with Aftermarket
Chances are you’ve heard the term “aftermarket part.” These are products manufactured and sold after the original product has gotten finished. To be more specific, an aftermarket part gets manufactured by a third-party company.
They are not associated with the OEM that made the original part. Aftermarket parts don’t fit into the OEM-VAR relationships and are competitors. OEMs and VARs develop a close business relationship.
How Aftermarket Parts Affect Things
The VAR wants to make sure the parts are standard. They also want to guarantee consistent replacement parts from the OEM. The VAR and OEM might draw up a contract to this effect to make sure certain products have end of life support.
To use cars as an example again, VARs will want to make sure that OEMs keep making specific car components for them. It makes it easier and cheaper for those companies to repair vehicles and source replacement parts.
Some OEMs can attempt to sell these parts directly to consumers, thus by-passing VARs. Many VARs are ok with this, as their focus is on customer satisfaction by keeping their products working. Those VARs who don’t want to get bypassed will usually agree with the OEM about rights.
If the original OEM made the replacement part, it’s official and not aftermarket. If a different company, not associated or contracted with the VAR, made the component, it is aftermarket. Many companies that make parts used as aftermarket replacements are also OEMs.
They often make parts for other companies, such as luxury cars, in the case of the auto industry. Consumers might buy a higher-quality stereo from them or replace the gear shifter. By putting these parts into a different car, they become aftermarket.
What Is OEM Manufacturing?
What is OEM manufacturing? It’s a process and approach that helps lower the costs of producing complex products. OEMs allow the consumer market to pump out affordable yet high-quality items.
Any company considering producing products on a large scale needs to know about OEMs. As long as you have good communication and do your research, the perfect OEM fit is out there. Shield Works is ready and waiting to bring your manufacturing dreams to life, so give us a call today.
Chinese Manufacturers: Finding the Perfect Partner
When it comes to manufacturing, China is the dream destination. The sheer size of the country and its population make it a natural choice for manufacturers looking to produce on a large scale.
However, finding the proper manufacturer in China can be tricky. This is applicable if you’re unsure what you’re looking for or where to start your search. Many people believe Chinese manufacturing to be sub-par, but this simply isn’t the case.
This article will cover some tips that will help you locate Chinese manufacturers that are right for your company!
When you’re keen on reading more about the utility & power of Chinese manufacturers, scroll down.
What Is Chinese Manufacturing?
In short, it’s the process of outsourcing your manufacturing to China. This is done by hiring a factory in one of China’s numerous cities and working with them on creating a product that meets your specifications.
In some cases, manufacturers may be able to hire for specific tasks. While other times, they will manufacture entire products from start to finish.
What Are the Benefits of Moving Manufacturing to China?
When you outsource production overseas, several benefits come along with it. This list is not exhaustive by any means, but it does hold evident benefits of moving your factory.
Costs
Your costs can decrease substantially. This is because China has lower minimum wages than many industrialized areas like Japan or Germany. While this isn’t true across the board (China has been increasing its minimum wage in recent years), it remains an essential factor.
Labor costs can be lower than domestic costs since most employees prefer working for foreign companies and often accept a smaller salary. This is due to several factors such as improving their resume, learning English, and skills that may transfer over into other industries later on.
Value
Chinese manufacturers can provide you with a great deal of value for the price. Compared to companies in other countries, China’s manufacturing industry is very cost-efficient. This makes it easier for your company to profit without charging customers more or cutting corners on quality control.
Scale
China’s sheer production scale means that factories have access to technology and resources unavailable elsewhere. Since there are many factories in one country, they can share ideas and implement new technologies faster than suppliers from different nations could ever hope to!
Many Chinese factories can produce products quickly and in large quantities. If you’re looking for a company that can churn out your product at high speeds and low costs, then look no further!
Why Do People Think Chinese Manufacturing Is Bad?
While Chinese manufacturers are highly sought after for their low costs and high productivity, there also exists a lot of stigma surrounding them.
Some people think that Chinese companies aren’t capable of producing products with the same level of quality as many other countries do.
However, this belief doesn’t accurately represent contract manufacturing China hubs. Chinese manufacturing is top-notch and it works at scale, unlike other locations.
China is most probably your best bet for manufacturing in the 21st century. With so much experience and resources, China can make any project come to life.
When looking for a Chinese factory to outsource your production line to, there are several factors that you’ll want to take into account:
Communication
Communication is an essential factor when it comes to any business transaction. If your supplier can’t answer e-mails or phone calls promptly, then don’t expect anything good to come from working with them!
How does the company communicate with its customers? Remember, though, quality communication doesn’t necessarily mean they’re fluent English speakers (although this certainly helps). It’s more about finding someone who will respond quickly and clearly.
Many Chinese factories focus on creating goods such as consumer electronics, toys, packaging materials, and more.
Specialization
What kind of products do they specialize in producing? If you have a specific product in mind that you want to manufacture, it’s essential to find a familiar supplier with your industry.
This may be one of the most important factors to consider when choosing a Chinese factory. You don’t want your reputation or brand name to be tarnished by poor-quality goods! You must inspect samples of their work before making any decisions.
Quality
What is the quality of their products?
Do they have experience working with companies from other countries? More and more businesses are outsourcing production overseas, so your chosen supplier likely has experience collaborating with people from different parts of the world.
However, suppose you’re looking for someone who has worked specifically with other brands operating in your industry. In that case, you’ll need to find a company that has experience working with businesses similar to yours.
How Do I Find a Supplier?
Now that we know some of the benefits of using Chinese manufacturers, it’s time to learn to find one. The best way to start is by doing online research or contacting an agency specializing in finding suppliers for foreign companies. However, there are also a few things you can do on your own:
Look for Trade Shows
Trade shows are a great place to start if you meet with potential suppliers face-to-face. They will have representatives from many different factories in attendance so you can ask them questions and get a feel for what they’re capable of.
Use a Search Engine
If you’re looking for a specific type of supplier, then using a search engine is the best way to find them. Enter in what you’re looking for and your location (or the location of the factory), and Google will do the rest!
Ask Friends Or Colleagues
If you know someone already doing business with a Chinese manufacturer, ask them for advice. They’ll likely be able to recommend a few good factories that have worked well for them in the past.
In essence, China is a great place to find manufacturers for your business. They can offer lower costs and increased production speed, which will ultimately help you succeed as an entrepreneur.
How Do I Vet Great Manufacturers From Bad Ones?
There are several factors involved when looking at Chinese manufacturers. Nevertheless, here are some key points:
Price
Price is one of the most important factors when choosing a manufacturer in China. If your product is new to the market, you will likely not have much competition. Therefore, you can afford to charge customers more for what they’re getting.
Still, there are some cases where this isn’t true (such as with commodities). This means you need to find someone offering competitive prices with high-quality products.
Quality Control
No matter how good your supplier does on price, if their result doesn’t meet industry standards, then it won’t do any good! Quality control matters.
Make sure whoever you work with has an extensive history of OEM manufacturing items before signing control of production. This is so that they know exactly what needs to be done once tasks are handed off between each stage of production.
Product assembly in China is quality-oriented. Thus, this part of the equation is a given.
Service
Even if you have a good relationship with your supplier and usually produce high-quality products, some exceptions will likely be. You’ll want to choose a manufacturer in China who is willing to work with you on fixing errors.
This should happen as soon as possible so that customers don’t get upset by poor service! China assembly service is one of the best, so keep that in mind.
In the end, finding the right Chinese manufacturers should always come down to choosing someone who can meet all of your company’s needs. This may take time, but it’s well worth doing due diligence before moving forward. Outsourcing manufacturing overseas has enormous benefits for companies looking to grow!
A successful business owner must find their niche market. They must know what product/service combination will yield the most sales.
Outsourcing to a Chinese manufacturer is often the answer for businesses that want to keep costs low. But also to remain competitive in their industry.
Manufacturing Done Right
When looking for a Chinese manufacturer, research is essential to find the best partner possible.
There are many things to consider, such as price, quality control, and service, but if you take the time to find a supplier that meets all of your needs, then you’ll be able to succeed as an entrepreneur.
If you’re looking for product assembly/contract manufacturing, get in touch with us, and we will take care of you.
Made in China: How Chinese Factories Became the World’s Factories
Chinese trade has expanded at a breakneck pace over the last several decades. In 2018, China exported a whopping $2.49 trillion in goods. The value of China’s exports always surpasses their annual import cost. This makes them a powerhouse of manufacturing and industry. Chinese factories were not always positioned like this, though, and it took a lot of growth to get there. So how did that all change?
We’re going to break down how product assembly in China got to where it is today and why it is still leagues beyond anyone else in the world. Stay till the end to see where they aim to go from here.
The History of Chinese Factories
During the period from 1992 to 2002, China implemented a series of incentives that were very attractive to foreign companies and investors. This alone had a massive impact on the growth of China’s manufacturing sector.
The term “made in China” was first coined in the early 1940s and this was because of a boycott of Japan and foreign-made products. China’s economy lacked the structure for efficient industrialization and they wanted to change that.
Chinese citizens wanted more opportunities to grow domestically. Boycotting these foreign-made products gave them an opportunity to take part in what they dubbed the National Salvation Effort.
What Was the National Salvation Effort?
This was a movement that opposed the Nationalist Government and demanded a stronger resistance to the expansion of Japan. As a whole, the National Salvation Movement was a coalition of leftist groups, albeit a loose group.
It included members of the Chinese Communist Party, including those who were both open and secret participants.
Why is this relevant? It was a crucial step in positioning China as a powerhouse, and not just in the manufacturing sector.
China Is the Factory of the World
Cheap and plentiful labor primarily aided in China’s rise as the ‘world’s factory.’ Besides this, an abundance of raw resources and low environmental regulations made it easy for them to grow. And, lest we forget, China’s extensive workforce is only matched by the quantity of land at their disposal.
If we’re talking about labor, we must acknowledge that in 1980, the average Chinese annual salary was between $416 to $508. On the other side of the world, the average American was earning 40-50 times that amount.
This salary discrepancy was one of the biggest draws for global corporations, as it meant higher profit margins. Additionally, China’s proximity to the Four Asian Tigers made it easy for global industries to transition.
Economic Reform
China began a series of market reforms in the late 1970s that established the real groundwork for change.
Because of rural land reforms, farmers benefitted more from their produce, which allowed more people to seek work in major cities.
In order to entice foreign investors, the Communist Party began establishing special economic zones. These zones had market-friendly policies that massively benefitted businesses and traders.
With this reform came significant growth, and today, China has several of these manufacturing hubs. Each one specializes in various parts of the supply chain.
For example, Guangdong focuses on electronics. The eastern provinces near Shanghai specialize in daily goods, mechanical parts, and medical equipment. The cities of Wuhan and Chongqing are known for their production of chemical products and auto components.
Why China Is Still Considered the World’s Factory
China has two major advantages as a manufacturing power, both of which have been demonstrated in the last year. To start, China’s industrial foundation is unrivaled in terms of range and depth.
With the capacity to produce anything from low-cost footwear to high-end biotech, China’s grip on the supply chain is unmatched.
China’s combination of manufacturing hubs, improved factories, and first-class infrastructure has made them even more competitive. This is true despite recent wage growth.
The Top Contributing Factors
Despite a change in international trade policies, China still holds most of the world’s manufacturing power. This is largely due to a few, consistent factors.
China’s Business Ecosystem
Industrial production doesn’t occur in a vacuum. It’s supported by a network of suppliers and distributors, as well as component manufacturers, government agencies, and customers.
Through competition and collaboration, these groups all become involved in the manufacturing process.
China’s business ecosystem has evolved dramatically in the last 30 years and there are a few noteworthy changes that stand out.
First, some areas have remained hubs for production. Shenzhen is an example, as it produces a substantial number of goods for the electronics industry. Overall, this domination of the market makes it difficult for anyone outside of these hubs to stand out.
Second, China boasts a technical workforce that surpasses any other. They also have a chain of assembly providers that seem to exceed the bounds of human capacity, making them the powerhouse we know today.
Taxes and Tariffs
Another significant factor was the export tax rebate China introduced in 1985. They set this into motion to boost the competitiveness of its exports. It effectively abolished double taxation on exported goods.
Additionally, any customer-based products were exempt from import taxes if they were coming from China. These lower tax rates helped keep production costs low and attracted businesses eager to make low-cost items.
Currency and Wages
Despite the US’s concerns that China manipulates its currency for national gain, the weaker yuan does make Chinese exports more competitive. Or rather, they become cheaper to buy with other foreign currencies.
Predominantly, it is a win for consumers all over the world, as Chinese products become significantly cheaper because of this.
And, if we’re talking about money, we can’t disregard the impact that China’s law of supply and demand plays on its worker wages.
Because the supply of Chinese factory workers exceeds the demand for work, salaries remain low. Furthermore, until the late twentieth century, most of the Chinese population were considered rural or ‘lower to middle class.’
Internal migration reversed the countries’ skewed rural-urban distribution. As the rise of industrial cities made more work available, there was a natural pull towards urban living and development.
A Working Example
Let’s have a look at how the supply of face masks gave us a particular illustration of China’s strength. In 2020, at the start of February, it made about half the world’s supply of masks, around 10 million a day. Within a month of that, output increased to nearly 120 million.
It would become excessively costly if every country were to develop its own production capacity to match rising demand. Most countries simply do not have the infrastructure and resources.
China still does manufacture a bulk of the face masks required for the pandemic. Any country hoping to make its own masks needs companies with expertise in textiles, chemicals, metallurgy, and machining.
They also need a good, consistent supply of raw materials, adequate manufacturing space, and qualified personal. Never mind the money required to keep it all running smoothly. Because of this, it’s impossible to start from scratch, which is why China had such a good head start.
All those things we’ve just mentioned? We know they were already in place. The cogs of China’s manufacturing machine were already well oiled and geared up to take on the load.
How Does China Want to Grow From Here?
So, while we know China is equipped to handle anything thrown at them from a manufacturing standpoint, where do they want to go from here?
Based on everything we’ve seen, China aims to move into more advanced lines of production. The industries they’ve pioneered till now have simply been a springboard.
As education and salaries grow, as they should do, that initial cost advantage shrinks. The aim for China now is to focus on domestic consumption and leave the chore of mass-producing, cheap, and labor-intensive items to others.
This gives them the space to focus on their own citizens. There has always been an aim to grow socially and economically but they intend to do this while maintaining a hold on their manufacturing.
On pure scale alone, China remains unopposed. We’re likely to see a massive change in time, but China’s manufacturing power is likely to remain unchecked.
There is a considerable new focus on technology and automation in particular. With the promise of robotics and AI, there is room for people to concentrate on more skilled pursuits.
Automation will revolutionize the way we make goods, even if we’re not quite there yet.
Quality Contract Manufacturing in China
As an OEM manufacturer in Chinese factories, we have the knowledge and expertise to offer exceptional service and goods delivery. We know how the system works, and we are proud of the last 16 years of service we’ve conducted in China.
We value quality, innovation, integrity, and excellence in all things, and aim to always offer the same to you.
Contact us today to see how we can help you with your OEM manufacturing, fulfillment, and precision assembly needs.
Which Industries Benefit the Most From Product Assembly in China?
Globally, companies realize the benefits of manufacturing their goods in China. However, you might wonder which industries benefit the most from product assembly there.
Today, we’ll take a look at the industries that benefit from manufacturing in this nation. Keep reading to learn more about which industries benefit the most from product assembly in China.
China and the Global Marketplace
Around the world, there’s a wealth of goods that were made in partnership with a China assembly service. Some companies manufacture their goods in China because of the abundance of affordable employees.
Also, China’s ecosystem of suppliers, component manufacturers, and distributors has evolved. Now, the nation is a more cost-effective and efficient place to manufacture many products.
Years ago, many individuals migrated to China seeking work. Now, the labor pool in China enables the region to produce goods cost-effectively and in bulk.
Furthermore, China factories can meet any seasonal industry requirements. They can even help your company to meet unexpected fulfillment needs for sudden rises in demand.
Doing Business in China
Manufacturers in China don’t operate in a silo. Instead, they rely on a network of competent business partners. These partners include:
• Clients
• Component manufacturers
• Distributors
• Government agencies
• Suppliers
Together, these partners facilitate efficient production through competition and cooperation. In fact, the business ecosystem for product assembly services in China has evolved considerably over the last three decades.
Big Players in Product Assembly in China
Shenzhen borders Southeast Hong Kong. The area has become a hub for the electronics industry.
It’s cultivated an effective ecosystem for meeting companies’ manufacturing and supply chain needs. This ecosystem includes component manufacturers.
Also, the area’s factories employ affordable workers. However, part of the local workforce also consists of a highly skilled technical workforce.
Area manufacturers also partner with assembly suppliers. Moreover, they work closely with their clients.
Some of the most well-known and biggest brands in the world have realized the advantage of manufacturing and product assembly in China. For example, Apple Inc. leverages China’s supply chain efficiency. The partnership helps to keep the company’s costs low and its profit margins high.
FoxConn Technology Group is another major company that operates in China. It works with several suppliers and manufacturers of components in the area.
In fact, several industries rely heavily on OEM manufacturing in China.
Industries That Rely on Product Assembly in China
The global economy is expanding. Simultaneously, companies are struggling to meet the increasing demands of consumers.
As a result, a growing number of companies around the world are outsourcing manufacturing and product assembly to China. By doing so, these companies can afford to produce more products. More importantly, they can keep pace with rising consumer demand.
Still, there are some industries, in particular, that benefit from partnering with China. Let’s have a look at them.
Electronics
Electronics are one of the top goods exported with the help of manufacturing in China. In the United States, for instance, consumers are passionate about electronics.
The citizens of China represent only about 40% of end-users of electronics. Most of the electronics manufactured in the country are for export.
Some experts forecast that reliance on product assembly in China will continue to grow over the next decade. Around the world, there’s no sign that the demand for consumer electronics is slowing. As a result, a growing number of electronics companies will likely turn to China to support their operations.
Medical Supplies
A considerable number of medical equipment firms source product assembly in China. The devices designed by the medical field save lives. They also help to improve the quality of life for patients.
Their partnership with regional manufacturers helps to curtail costs. Most importantly, medical equipment companies continue to work with manufacturers in China because they consistently receive high-quality products.
Plastics
There’s no place on the planet that doesn’t use plastic goods. No matter where you go, you’ll see goods made of plastic. In part, companies can keep up with the demand for plastic goods because of their relationship with manufacturers in China.
Many of the things that people use daily are a result of contract manufacturing in China. There’s plastic in nearly every tool, toy, and component.
Factories in China continually output plastic toys, electronic devices, and parts. It’s in all the top manufactured products in various consumer industries.
People rely on these goods every day. As a result, the plastic industry’s reliance on OEM manufacturing in China will likely continue.
Textiles
Factories in China produce an incredible amount of clothing and textiles. In fact, clothing and textiles are the top exports in China.
Many United States companies sell textiles made in China. Manufacturing in China is a vital part of the fashion industry.
As with other industries, manufacturing in China enables companies to produce high-quality, affordable goods. Moreover, the production capacity of OEM manufacturers in China enables the fashion industry to meet the ever-increasing speed of today’s fashion cycles.
A Trusted Manufacturing Partner in China
Now, you know a bit more about which industries benefit the most from product assembly in China. Still, have you ever thought about how your company could take advantage of working with suppliers and manufacturers there?
If you want to learn more about working with companies in China, Shield Works Precision Manufacturing can help.
Our warehouse and manufacturing facility is located in the heart of Zhuhai City near the South China Greater Bay area. We provide custom OEM manufacturing, assembly, and warehousing. For more than 16 years, Shield Works Precision Manufacturing has worked with a growing international client base.
Please feel free to contact us today to learn more about risk-free, high-quality manufacturing solutions in China.
OEM Manufacturing in China: More Pros for Business than Cons
For many years, China has been the manufacturing hub of the world. Last year, this production rate shrank, partially due to the impact of COVID-19. This means that China needs your business and there has never been a better time to manufacture in the country. If not you don’t know how to benefit, then we can help. Read on as we discuss why you need to outsource OEM manufacturing to China.
Lower Costs
One of the more obvious and important benefits of OEM manufacturing in China is the reduction in cost. The bottom line is that the better your product and price, the more units you will sell. Even if you are putting out a high-end brand, then you can increase your profits by lowering manufacturing costs.
Domestic manufacturing sounds good in theory. However, it has increased overheads that do not exist in China. This makes locally produced products expensive and is why manufacturing in Western countries has declined in modern times.
Of course, you will have to pay to ship the products and pay import tax. But even if the overall price works out fractionally less, you are still saving. Over time and in increased volumes, you can expect this to be a substantial amount added to your balance books.
Warranty
When OEM manufacturing in China, many manufacturers will offer you a warranty for a given period of time. This can set your mind at rest when ordering products from across the world. If a product has issues, then you can ask for a replacement or ask for a solution to the problem.
Quick Output and Turnaround
China creates goods for companies all around the world. This means they have scaled up their manufacturing to unprecedented levels. If you need a large number of goods in a short time, they will deliver them.
These factories will have produced similar items to yours before. That means they have all of the procedures in place to get things manufactured quickly and on time.
One of the arguments against this is the unfair conditions of Chinese workers. However, if you research the plant you are using you will be able to find out if workers are paid a fair amount and treated fairly. You should also take into account that the attitude to work in China is culturally different from that in the West.
Excellent Service
Manufacturing in China brings with it the exceptional service inherent in their culture. Even for smaller businesses, you will get the same treatment as a larger, global operation would.
This service also carries through to product support. When you contact an OEM manufacturer’s support team, you will get to talk with their engineers. Speaking to their technical team cuts out the middlemen, meaning you can make informed decisions and get great advice on how to improve and refine your product.
Duplication
By no means do you need to counterfeit a product. However, when manufacturing in China you can specify things you like about one item and have them replicated.
Perhaps you want to include a feature you have seen on someone else’s products or use the same dimensions. By discussing this in advance, Chinese manufacturing companies will be able to arrange this for you easily.
This is how a product evolves. By taking something great and improving, you have the opportunity to make it even better. With each iteration of the item, you can expect the quality to improve as well.
Lead Time Reduction
When you outsource OEM manufacturing to China, you have a number of options to help you reduce lead times. One way is to use automation software to manage your inventory. This will ensure you stay on top of how much stock is needed, ordering at the precise time as you begin to run low.
The other option is to order regularly and consistently. This will mean a reduction in delivery and you won’t miss out when orders run low.
Expansion and Diversification
Outsourcing allows you to add new product lines and verification to your portfolio. This has been something you have been thinking of for a while but did not think possible with your current manufacturers. All of this can be done while keeping prices low and with better production.
This can also help you engage more international markets. You can ship to areas all over the world, allowing you access to markets not possible in the past.
Low Labour Costs
Another of the main benefits of OEM manufacturing is that you gain access to all the best that the company has to offer, including their labor. This means you get expertise without having to search, recruit and train your workers. Not only are labor costs lower in China, but you will not have to pay many of the expenses related to hiring local workers.
Scam Prevention
If you deal directly with overseas manufacturers, scamming is a possibility. You may find deposits or whole budgets go missing. In addition, even delivered products could be below standard if you have never dealt with the company before.
That means it is important to get a reputable company to arrange this for you. They will have trusted manufacturers who work to the highest standards. In addition, they will have agents who can traverse language and cultural barriers for you.
OEM Manufacturing
Now you know the benefits of OEM manufacturing in China, speak with an expert. They will be able to work out the best way for you to benefit. You may be able to improve profit more than you think.
Your first stop should be Shield Works. We are a British company working in Southern China for OEM manufacturing needs. Contact us here and see what we can do for your business.
What Are the Benefits of Using an Original Equipment Manufacturer?
The presence of critical spares in your business is essential, but sometimes you encounter unexpected breakdowns. You’re caught in between making a hurried order from the original equipment manufacturer (OEM) or outsource from local suppliers.
With minimal repair time, most businesses prefer the latter, not knowing its financial implications. But before you make this critical choice, here are the benefits of using original equipment manufacturer parts in your business.
What Is OEM?
An Original Equipment Manufacturer also referred to as OEM, manufactures products and sells them to different companies. The purchasing company will then brand the product before selling it to its customers as a finished item. OEMs are common in the IT and auto manufacturing industries.
OEMs can be best described as business-to-business entities because they only deal with value-added resellers. The primary goal of the OEMs is to manufacture product components according to customization requirements.
Top Benefits of Using an Original Equipment Manufacturer
As a busy tech, health, or auto company, you’ve limited time to produce high-volume goods.
Thus, outsourcing the products from the original equipment manufacturer becomes cheaper and convenient. You also get high-quality and authentic products that fit your products.
Here are the benefits of using OEM:
Guaranteed Quality Parts
OEM products are pure quality, and their precision is top-notch. When you make an order from an original equipment manufacturer, you’re confident of getting the exact parts.
Using the original component blueprint and design template, OEMs craft accurate products.
You don’t need to describe the materials used because they know what to use at every stage of the parts manufacturing. Whether you’re in the robotics, medical, or health industry, you’ll get the exact product you’re looking for.
Using precision machining ensures that all products meet hyper-specific requirements.
Before dispatch, the manufacturers test the parts to ensure they meet the original specification. You get compatible parts that match the factory specs.
Manufacturer’s Warranty
What happens when a spare part breaks down a few days from its date of purchase? Buying from an OEM saves you from component defects and losses when the device cannot perform.
If the parts don’t work, they’ll replace the elements or repair them for free.
With a manufacturer’s warranty, the equipment lifespan is enhanced. Also, it reduces your downtime, saves money, and maintains its peak performance in the long run.
Should you experience part defects, call, and the manufacturer will resolve the problem.
Value
Your product value is what maintains your customer base and attracts more prospects. Stocking generic spares in your business can affect the product value.
The OEM in-house upgrades, engineering, optimization, and modifications maintain the component value. It’ll serve you past a specific duration and will be resilient between maintenance schedules.
With enhanced lifespan and minimal repairs, buying from an OEM gives you great returns on investment. It’s worth the wait and money spent on every component bought from these manufacturers.
Components Availability
Unlike generic suppliers who take time to imitate the original products, OEM requires less time to avail the required product. To beat downtime, most OEMs stock essential machine components ready for dispatch in case of a breakdown.
OEMs ensure that operations resume fast after unplanned shutdown by holding stock on consignment. They maintain catalogues of critical components and make them available.
Excellent Customer Service
Virtual description of different spare parts to an engineer can lead to wrong interpretation and production of a faulty part. When you partner with an OEM, you get a fast response to all your inquiries from designated engineers.
The professionals understand the parts and know how the blueprint and design work.
If the equipment is faulty and may not need a replacement, the engineers will virtually guide you through troubleshooting it. The exciting part is; you get to work with engineers that designed the components.
Also, they’re conversant with every aspect, making it easy for you to get the right answers to every of your question. The OEMs become silent partners whom you can trust with different component issues whenever there’s a complication.
Competent Prices
Dealing with OEMs opens up your business to competent product prices. Since the manufacturers will create bulk goods for your supply business, you can utilize the economies of scale.
At the start of the component production, the OEM will check and develop parts that match the budget. Though aftermarket items are cheaper, you can still match the price when buying from an OEM in bulk.
Yet, you’ll have better quality and customized parts, helping you save more.
Fast Production
What happens to old machine parts whose production ceased and the availability in the market is scarce? The availability of blueprints and raw materials simplifies the OEM production process.
No matter how old the vehicle or medical equipment is, the manufacturer has everything it takes to produce the required part. Upon request, the manufacturer will start production, ensuring that it meets factory specs.
Durability
Products obtained from an OEM are 100% percent durable. You don’t have to worry about the materials or the product strength in challenging conditions because it’s made with precision.
The manufacturers understand how component quality matters to consume and cannot compromise it.
OEM knows the duration that each component takes before wearing out. With an idea of when the changeout is due, you can plan on the new replacement.
Choosing an Original Equipment Manufacturer
Choosing an ideal manufacturing partner is overwhelming for the first time. Below is a list of things to look at before contracting an OEM:
• Expertise and capabilities
• Track record
• Quality
• Pricing
• Communication
• Licensing
• Flexibility
Entrusting your blueprints to a manufacturer requires trust and the ability to build a long-term relationship. Checking on the above facts before hiring one will safeguard your products and ensure your expectations are met.
Get a Reliable Original Equipment Manufacturer Near Me
It’s no secret that dealing with an original equipment manufacturer has many benefits to your business. Besides an impressive return on investment, you get quality products and a warranty for every product you buy.
Are you a startup and need a reliable OEM for your IT, electronics, medical, or food industry? At Shield Works Precision Manufacturing, we provide diverse manufacturing services. For more information about our services, get in touch with us today.
A Complete Guide to Original Equipment Manufacturing (OEM)
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.
Quality
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.
Customization
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.
Support
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.
Cost
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.
Planning
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 Capabilities
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.
How to Find an OEM Manufacturer for Your Products
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:
- Alibaba
- Global Sources
- Global Sourcing Specialists
- Kompass
- MFG
- ThomasNet
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.