If you’re in the business of building and selling heavy duty equipment like emergency response vehicles and asphalt pavers, you know how hard it is to perfect everything that goes into the design, manufacture, and sales of these machines.
Especially in the design and manufacturing stage, there are thousands of parts and components that will need to be designed, built, and assembled for your equipment, and today it’s rare for OEMs to take on all of those production responsibilities in-house. That’s why outsourcing more difficult components, like cable assemblies, often just makes more sense for OEMs, due to its efficiency. Outsourcing allows an organization to focus on the areas it truly specializes in, and can help OEMs overcome these four challenges:
Equipment and Technology
Even if you try to position your organization ahead of the curve, researching and investing in the latest technology for every component in your equipment can be daunting, not to mention unlikely to be in-budget. For example, if your cable assemblies require precise lengths or specialty applications, the most cost-effective way to process them is with automated cutting and crimping machines. The automation helps reduce, if not eliminate, rework and wasted materials, but it’s also a significant investment for OEMs. Likewise, when it comes to testing, you’ll want to be sure the technology is up to date to ensure your cable assembly will truly function as designed. Or, you could just let a contract manufacturing partner worry about keeping up with technology and investing in the best equipment.
Skilled Labor
The U.S. is currently experiencing a shortage of skilled laborers – and it’s only going to get worse. Over the next decade, the Manufacturing Institute estimates more than 3 million manufacturing jobs will open up and 2 million of them will go unfilled. For an OEM, that means it will likely be very difficult to find workers with the specialized skills to design and build cable assemblies. Instead of taking on that recruitment challenge, a contract manufacturing partner that already has a team of qualified staff can provide high-quality solutions for you.
Inventory Management
Material handlers in many OEM facilities spend a considerable amount of time tracking, picking and distributing parts. And if you’re building cable assemblies in-house, that amount of material increases, along with the potential for errors, excess, or obsolete parts. When you partner with a cable assembly supplier, they will be responsible for keeping track of extra parts and inventory, and all you handle is the finished assembly.
Risk Control
When OEMs produce cable assemblies, they take on the risk of issues that could occur, like faulty displays or decals, incorrect routing, improper power supply, and more. Not only do these issues cost money to fix, they can leave your engineers and designers scrambling to identify and rectify the problems. By outsourcing your cable assembly, you can mitigate that risk, because if there are issues, the supplier will be held responsible. A great contract manufacturing partner, however, will conduct testing throughout production and guarantee the final product.
Getting your product to market quickly can make you an innovator in your industry. If your facility is not equipped with the space, equipment, or skilled workers, however, building cable assemblies in-house will inevitably take longer and cost more. While it may seem more expensive upfront to outsource, calculating the total landed cost of your product can help you decide which route to go. We’ve also created an infographic, To Build or Not to Build? Outsourcing vs. In-house, to help you make an informed decision. Click the button below to download your free copy.
