Original Equipment Manufacturing

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Instead of using a supplier and gearing-up for production each time you receive an order, consider the Different Products OEM Contract Manufacturing Service. If offers an easy solution to the most common issues that face manufacturing outsourcing.

How OEM works

Contract Manufacturing can basically be viewed as a long-term purchase order, generally of one to three years, where production is based on estimated annual usage (EAU) forecast.

The system works on a Demand Flow model, with Different Products works closely with the OEM's planners to predict and plan for spikes in demand; the goal being smooth, steady low-level production coupled with periodic stock releases from buffer inventory as well as other advance supply chain management techniques.

The Advantages Of The OEM Model

Many companies have a list of concerns that come along with considering outsourced production. The three top items on the list are normally:

  • Conformance to specifications
  • Cost
  • Supply Security

especially when purchase orders can only be issued on a demand-oriented basis and demand is unpredictable.

The Different Products service addresses all of these issues. Our experienced, entrenched in-country production control team works hard to establish a streamlined, turnkey operation for the reliable production of the individual product or integrated offering provided by the OEM to its client base.

How OEM Could Make Sense For Your Business

It is just good business business sense to the costs of production to the lowest cost jurisdiction possible.

It then logically follows that those managing and monitoring production should be physically close to where the production is happening. Remote control almost never works and simply adds more administrative burden to the equation, not less.

The facts are this: Contract Manufacturing lowers production costs and fosters the conservation of resources inside the OEM - such as space, labor and raw materials - leading to potentially significant savings of as much as 10-30 percent when all factors (overall labor, space utilization and energy concerns) are considered.

There are several other areas where contract manufacturing may also make an impact and in many case even greater cost savings can then be realized. Among them are:

  • Elimination of the cost of construction (or expansion) to accommodate production
  • Removal of the need to equip for design, production or storage of tooling
  • Relief from most equipment capitalization and maintenance costs
  • Reduction of operator staffing and training obligations

Perhaps most of all, because it frees scarce, expensive resources in the OEM to focus their attention on local issues like strategic planning, sales, marketing, research and development, and customer service.