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Top 4 Automotive OEM Standards To Look Out for When Selecting a Supplier
Over the years, original equipment manufacturers (OEMs) have been defined in various ways. Traditionally, an OEM would manufacture an entire product that was sold under a different brand name. Nowadays, OEM suppliers often focus on producing components that are used in the manufacturing of final products.
In the automotive sector, OEM suppliers play a critical role by providing the necessary components required to build vehicles. This involves adhering to stringent automotive OEM standards. Choosing the right OEM supplier can lead to high-quality components, competitive pricing, and numerous other benefits.
If you're unsure whether investing in an OEM supplier's services is right for your business, this article outlines some key advantages and offers guidance on selecting the best OEM suppliers.
**Do You Need an OEM Supplier?**
When it comes to outsourcing component manufacturing, automotive companies typically choose between OEM suppliers and aftermarket parts suppliers. Both markets face intense competition, but OEM components often come with endorsements from automotive companies, ensuring they are specifically designed for certain vehicle types. This certification ensures better compatibility compared to aftermarket parts, which may not always match up with specific vendors.
Although both markets are expected to grow over the next few years, the OEM market holds significant potential due to rapid technological advancements and diverse product offerings. As new developments emerge, automotive manufacturers can rely on consistent benefits that have stood the test of time:
**Competitive Pricing**
Outsourcing component manufacturing often proves cost-effective because of economies of scale. Producing large quantities of components in low-cost regions like China and Southeast Asia is usually cheaper than manufacturing them in-house. Streamlined processes and efficient supply chains further reduce costs, resulting in high-quality components at reasonable prices. This leads to increased sales, profits, and overall revenue.
**Access to Experts**
OEM suppliers frequently specialize in particular industries and refine their manufacturing techniques over decades, becoming experts in their fields. Rigorous testing procedures are implemented to guarantee compliance with industry standards. By collaborating with an OEM supplier, automotive companies avoid the financial burden of investing in machinery, processes, and skilled labor. Instead, they leverage the expertise of external manufacturers.
**Protection Against Fluctuating Costs**
During outsourcing, automotive companies often secure fixed per-unit costs for components over a specified period, shielding them from fluctuations in raw material prices and currency exchange rates. This stability facilitates better planning and budgeting while minimizing unexpected expenses, such as those encountered during global crises like pandemics.
**Opportunity to Focus on Core Activities**
By outsourcing component manufacturing, businesses can allocate resources to other critical areas like research, development, and exploring new markets or customer segments.
**4 Key Automotive OEM Standards to Look For**
After deciding that OEM automotive suppliers align with your component manufacturing needs, start your selection process by identifying these essential qualities:
1. **Quality Component Manufacturing**
Receiving high-quality components is paramount. While most OEM suppliers claim to offer quality products, quality assurance certifications like ISO standards are reliable indicators. ISO certification signifies adherence to quality assurance practices across installation, production, and service delivery. Additionally, assessing a company’s operational efficiency—such as using advanced technology for transparent project tracking—is crucial. An effective Enterprise Resource Planning (ERP) system should also enable seamless communication between you and the OEM supplier.
2. **Timely Delivery**
Timely delivery reflects efficiencies in the entire manufacturing process. Prompt receipt of a product suggests precision and efficiency in each preceding step. In the competitive automotive industry, delays in time-to-market increase the risk of losing market share. However, timely delivery doesn't automatically imply market-readiness; skipping the testing phase could render the product unusable. Ensuring high-quality output at every stage is vital.
3. **Experienced Team**
A seasoned team ensures the manufacturing process has been thoroughly tested. Working with the right team means they have resolved all possible issues, leaving no room for oversight. Besides core manufacturing services, your OEM supplier should offer ancillary services such as design and management support. They should provide recommendations to enhance component quality.
4. **Exceptional Customer Service**
A strong partnership extends beyond manufacturing to include excellent customer service. Your OEM supplier should integrate cutting-edge management and communication technologies, maintain stable staffing levels, deliver on time with robust warranties, and offer project management that provides visibility into the entire process.
**Experience Unparalleled Benefits with VPIC’s High Automotive OEM Standards**
At VPIC, every client engagement is crafted to ensure success at every stage—from sourcing quality raw materials to employing skilled technicians and engineers, and delivering your product on time. Throughout the process, our team stays in constant communication with you to keep you informed about your project’s progress.
To initiate an unparalleled quality partnership with VPIC, reach out to us today.