Some of the largest OEMs in North America hold their grip in their respective industry not because of what they can do, but because of what they realize what they can’t do. Partnerships with a contract metal manufacturer are meant to enhance the day-to-day operations for an OEM while planning for a healthy, sustainable future in all aspects of their business.
Companies like S&R Sheet Metal serve as a contract metal manufacturer and have seen firsthand how this relationship benefits companies like us and OEMs. Between better business practices for OEMs and more stability in work for manufacturers, see how the advantages of creating a partnership can impact your next operation.
Partnerships Lead to Better Business Practices
OEMs constantly are searching for ways to streamline their operations while maximizing production and output, all while operating on tight budgets to maximize profit margins. That is a difficult task for any company to figure out. But when partnerships with a contract metal manufacturer are created, the first ripple is created as overhead costs are lowered for the OEM. This happens because the costs associated with investing in the capital required for metal fabrication, such as machinery, and the maintenance that goes with it, are eliminated. Not only the machinery and upkeep, but the operators necessary to perform the functions of the machines themselves.
When this is kept to an outside manufacturer, there are the costs associated with that, but those are small in comparison to those when an OEM makes the decision to fully invest in the infrastructure to produce the parts themselves.
Beyond cost efficiency in overhead budgets, OEMs also obtain better cost control. Ultimately, it’s the OEMs who make the decision on where their outsourcing is going to take place. By extension, this leads to more price control in aspects such as streamlined sourcing, processes in-house, and in-house waste reduction.
Additionally, more flexibility is afforded to OEMs as capacity is expanded through the contract manufacturers allowing OEMs making investments into necessary capital. The flexibility also appears in OEMs expanded into their mainline of operations.
Key Operational Benefits
Speed is the essence when it comes to OEMs. As large, front-facing institutions, they have set a reputation for their ability to bring products to market in a timely manner, and partnerships with contract metal manufacturers certainly play a role in making that possible.
A contract metal manufacturer specializes in their line of operations, meaning, they have a greater understanding of the potential challenges a project might face and a work through solution. All that goes toward shortened development cycles, lead times, and better support for production. The contracted manufacturer also features enhanced engineering capabilities which allow for DFM collaboration and reducing potential costs such as redesigning.
And a final point, the quality from a contract metal manufacturer is going to be at a higher level along with consistency. They don’t have all the operational branches that an OEM has, and they can focus all their time on a singular aspect rather than focusing on multiple facets.
Risk Reduction
OEMs are always going to hold the most risk associated with their project. They are the front-facing institution whose name the product ultimately bears. But there are built in risk reduction measures when creating a partnership with a contract metal manufacturer. This starts at the supply chain level as a contracted metal manufacturer can provide alternative material sources and eliminate geographic redundancies, not only to the project they have been contracted for, but other lines for an OEM as well.
By moving a portion of production out of the facility, OEMs have less production risk in-house.
Searching for a Contract Metal Manufacturer? Contact S&R Sheet Metal Today
S&R Sheet Metal has served as the Pacific Northwest’s premier custom metal fabrication shop since we opened our doors in 1974. Based roughly two hours south of Seattle in Kelso, Washington, we’ve provided OEMs in multiple industries with the contracted metal manufacturing operations their programs need.
Our team consists of a unionized workforce who only create and bring quality, consistency, and precision in the parts we manufacture. Besides that, we also offer numerous secondary operations such as laser metal cutting that further enhance your order to the exact specifications and design your team needs.
Contact S&R Sheet Metal today for an initial consultation and let’s create the parts your project needs.