There are many reasons you should consider transferring your OEM manufacture to China, particularly if you are involved in the area of consumer electronic equipment. The main incentives, however, are the low-labor costs and the wealth of manufacturing experience and expertise that exists within the country.
But before you begin to outsource your OEM manufacturing, there are certain aspects you really need to consider. These are areas which will help you to find the best possible OEM manufacturing solution for your particular circumstances.
Here’s a guide to help find out what’s going to work for you.
Have you defined your problem?
If you haven’t defined the problems you are looking to solve through outsourcing, then it’s likely that your OEM manufacturing arrangement isn’t going to deliver the best value for money.
You’ll want input from across your organization to do this in an effective manner and to answer questions like, “What technologies will the OEM supplier need, to make your product in the right way?”, “What after sales support is available if, or when, problems arise?”, “How will you integrate the manufacturer into your supply chain?”
The best possible supplier will add value by making their strengths compensate for your weaknesses and enable you to de-emphasize or eliminate internal issues.
Have you done your due diligence?
It’s easy to be overwhelmed by options when looking to outsource your OEM manufacturing and it’s easier still to get so focused on price that you don’t do your homework on the suppliers.
Cost is only a part of the equation for choosing a successful OEM supplier. It’s just as important to work with a partner that understands you and your business, can guarantee a quality output and has a successful track record of working in your industry and providing real-life solutions to business problems.
You need to involve the right people from your organization to ask the right questions, and find the right supplier to respond to their needs, not just in a meeting but all the way through the design, production and delivery of your OEM products.
Have you picked the right product at the right time?
ODM manufacturing (Original Design Manufacturing) can help you eliminate some of the risks associated with tying up internal resources, but OEM manufacturing means outsourcing some of an established product range or branding an already existing product.
It’s important to start with the right product and trial the process, learning to work with your OEM provider in the most efficient way possible before you expand the program to other products.
When you do this it’s also important to communicate your OEM product road map, so that your OEM supplier can understand the process from their own point of view too. A small scale project may not cause a rush of attention with an OEM manufacturer but a an OEM manufacturing management company will often be only too pleased to assist as long as they know there will be long-term returns for them and for you.
Have you defined your internal OEM management processes?
One of the potential areas that can cause an outsourcing relationship to fail is having too many people on your end handing out instructions piece-meal to your OEM supplier. That’s because it leads to confusion regarding objectives and raises the risk of poor communication on the part of both sides in the arrangement.
It’s best to allocate a single point of contact at your company and for the OEM manufacturer to offer the same in return. The management and communication process should be outlined either in a memorandum of understanding or contractually, so the proper level of responsibility can be assumed by both sides of the arrangement.
Are you just chasing price?
Sometimes if the price appears to be too good to be true, it really is. It’s important to secure a relationship which improve your profit lines but still enables the OEM supplier to make a profit too. This means that your business will always be a priority and given the attention that it deserves. If the OEM manufacturer isn’t making money then you face some potentially disastrous consequences – the provider may go into insolvency with you losing any investment you have with them, or they may deprioritize your business when better opportunities arose. Worse still; they may close their arrangement with you and leave you floundering for another supplier.
SZCEIT understands exactly how OEM manufacturing in China can be of great benefit to your business, and can work with you to help you get the best value from the process.