How Contract Manufacturing Partners Can Improve an OEM's Bottom Line

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The bottom line is a key indicator of a company’s success, so when there’s an opportunity to improve it, the answer should be a resounding “Yes!” One way OEMs can do this is by working with a contract manufacturing partner to help improve the efficiency of their electrical and mechanical assembly production. And while contract manufacturing may sound complicated, the benefits can easily outweigh any perceived complications. To help show you how, here are three major ways a manufacturing partner can improve an OEM’s bottom line:

Streamlined Costs

Managing a supply chain and purchasing hundreds of parts for one component can be costly for an OEM. Once the parts arrive, the OEM has to pay skilled workers to receive the parts, store and disburse the inventory, build the assembly and get it ready to ship. Instead, the OEM could streamline all of those costs by having a contract manufacturing partner handle the supply chain, and pay for just one part or one kit that’s ready to be utilized on the final product.

Optimized Operations

With many components today requiring special equipment and extensive knowledge to design and manufacture, it’s rare for OEMs to be specialists in all phases of the manufacturing process. This is why many OEMs focus their core competencies on designing and selling a finished product, as it’s nearly impossible for one company to optimize operations in engineering/design, manufacturing and sales. Managing people, space and capital expenditures is difficult enough at that level but an experienced contract manufacturing partner can help handle the optimal operations in manufacturing. This means the OEM doesn’t have to worry about making space in existing buildings or adding-on in order to make room for component assembly. The OEM also won’t have to keep up with the latest technology in wire cutting, metal fabrication, PCB design and testing, or worry about whether it has enough people to get the job done while keeping the company profitable.

Reduced Risk

For complex components like electrical and mechanical assemblies, manufacturing is a risky endeavor if you’re not experienced. OEMs can reduce this risk by transferring the manufacturing responsibilities to a contract manufacturing partner. This partner will be up to speed on all the latest industry regulations and will already have the necessary processes in place — especially if they are ISO-certified. Additionally, a contract manufacturing partner will provide a warranty on the part and a guarantee to service the component should something go wrong.

The bottom line is that a great manufacturing partner can enable an OEM to reduce production costs, relieve operations headaches and transfer risk to a third party. When an OEM can save time, money and resources, those savings can go back into the company, adding to profit margins and opening doors to new investment opportunities.

If you think partnering with a contract manufacturer could benefit your business, MCL Industries is ready to hear from you — and it’s as simple as sending in a drawing and requesting a quote. If you like what you see, let us know and we’ll handle the rest.  Just click the button below to get started with a free design review.



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