Over the years, original equipment manufacturers (OEMs) have been defined in a number of ways. Traditionally, an OEM manufactured an entire product that was sold under a different brand name. These days, OEM suppliers often manufacture components that are used in product manufacturing.
In the automotive industry, OEM suppliers provide the components that are needed to produce a vehicle. With that comes high automotive OEM standards. By selecting the right OEM supplier, you can experience high-quality components, competitive pricing and many other benefits.
If you’re unsure if you want to invest in the service provided by an OEM supplier, this blog post provides a few of the key benefits and an overview of how to select OEM suppliers.
Do You Need an OEM Supplier?
When outsourcing component manufacturing, automotive companies will go with one of two options: an OEM supplier or an aftermarket parts supplier.
Fierce competition exists between these two markets, but OEM components are often endorsed by an automotive company as a supplier that creates components specifically for a type of vehicle. With this certification comes a more accurate component-product pairing, as opposed to aftermarket parts that may or may not be compatible with a vendor and therefore do not certify compatibility.
Although both markets are expected to grow over the next several years, the OEM market has huge potential thanks to rapid technological innovations and advancements in product offerings. While new advancements are on the horizon, automotive manufacturers can rely on the following benefits that have been consistent over time:
Competitive Pricing
Outsourced component manufacturing is often cost-competitive because of the advantages obtained from the size of the enterprise.
When manufactured in low-cost regions, such as China and Southeast Asia, producing large volumes of components is cheaper than if the component were manufactured by the buying company.
By adding in streamlined processes and efficient supply chains, manufacturers get a reasonably priced, high-quality component that leads to increased sales, profits and revenue.
Access to Experts
OEM suppliers often specialize in an industry and hone their manufacturing processes over decades, making them experts in those processes. Stringent testing processes are also established to ensure each component meets industry standards.
By partnering with an OEM supplier, automotive companies avoid capital costs associated with investment in machinery, processes and technicians, and can instead rely on the solidified processes of outsourced manufacturers.
Protection Against Fluctuating Costs
While outsourcing, automotive companies often lock in the per-unit cost of the component for a fixed period, protecting them against fluctuating costs of raw materials and currency.
This consistency aids in planning and budgeting. It can also help to mitigate surprises such as those experienced throughout the pandemic.
Opportunity to Refocus Efforts
Outsourcing component manufacturing allows companies to invest resources into other channels, such as research, development and new market and customer endeavors.
4 Automotive OEM Standards To Identify
Once you’ve decided that OEM automotive suppliers are a good solution to your component manufacturing efforts, you will want to begin your selection process by identifying the following four qualities:
1. Quality Component Manufacturing
Receiving quality components is the most important outcome of your search. However, most OEM suppliers will claim to have quality components.
One of the easiest ways to identify quality assurance is with quality standard certifications, such as those granted by ISO. ISO is the international certification granted for quality assurance in installation, production and service provision.
Another way to assess quality in the company is to identify other areas of effectiveness, such as process management that uses leading technology that allows for transparency into projects, workflows, materials inventory, logistics, delivery and everything in between. The ERP management system should also facilitate communication between you and the OEM supplier.
2. On-Time Delivery
On-time delivery illustrates efficiencies in the entire manufacturing process. Receiving a product on time tells you that each step leading up to that point has been completed with accuracy and efficiency.
With the level of competition in the automotive industry, you can’t have a slow time-to-market. When this happens, the chance of market erosion increases.
Be mindful of the fact that on-time delivery does not necessarily mean that the product you receive will be market-ready. Neglecting the testing phase of the manufacturing process with on-time delivery might mean that your products are unusable. You need high quality at every stage of the process.
3. Experienced Team
As we stated in the previous main section, an experienced team means that the manufacturing process has been tested time and time again. If you’re working with the right team, they will have managed all of the issues during their process to ensure that nothing is overlooked.
In addition to the manufacturing services that are required to produce your desired component, make sure your OEM supplier provides other services outside of manufacturing, such as design and management. Recommendations can be made regarding aspects of the design to ensure you’re getting high-quality components.
4. Excellent Customer Service
A good partnership goes beyond manufacturing services to encompass excellent customer service. Your OEM supplier should provide customer service through:
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Incorporating the latest management and communication technologies
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Providing stable manpower
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Delivering on time with excellent warranty
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Providing project management that allows insight into the entire process
Receive Extensive Benefits From VPIC’s High Automotive OEM Standards
At VPIC, every customer engagement is developed to create an experience that succeeds at every step — from producing components to sourcing quality raw materials to employing experienced technicians and engineers to delivering your product on time.
Throughout the entire process, your team at VPIC Group will stay in close communication so that you know your project is going according to plan.
To take the first step toward an unmatched quality partnership with VPIC group, contact us today.
