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Contract Manufacturers Help OEMs Lower Costs For Assembly Manufacturing

by Last updated Oct 12, 2021 | Published on Dec 12, 2017Contract Manufacturing

Estimated Reading Time: 4 minutes

Have you ever dealt with a large home project? There are tons of minor details that have to be covered, like ordering materials, hiring the right workers, getting the materials delivered, and setting the deadline for installation. All these small tasks can add up to spending a great deal of time, energy and money. Then the real issues begin. Consider this scenario:

The first contractors do an exceptional job for their specific tasks. While you could have them do the entire project, you try your hand at completing certain aspects of the work yourself to save on costs and time. The work you do isn’t up to par with the professional workmanship that the hired technicians performed. Maybe your work is even so detrimental to the entire project that it causes quality and safety hazards. That means you end up hiring a second contractor who then have to tear out all the work and start over again, with new materials and increased labor costs. Their work isn’t as exceptional as the first workers, but it is better than what you had done.

Individual Component Manufacturing Can Add Up in Big Assembly Costs

This scenario is exactly what many OEM industries face when facing projects outside their core expertise. They may hire one component manufacturer to do a specific welding job, a second company to do a tube bending job, and then have their in-house workers do a third job while trying to combine all the different design concepts and workmanship together for a unified system. While it may seem like it’s saving time and energy to have the work performed this way, it may not actually be saving you on either factor. Why?

Each contract manufacturing company, as well as your in-house technicians, has to order the same supplies, draw up similar designs, and account for time and labor costs to complete their sections of the project to create a unified assembly. All these individual jobs have upfront and overhead costs before any physical work begins. That’s a good deal of overlap and you don’t have your components yet.

Another issue arises in that you have to deal with differing levels of work quality. If even one measurement or specification is off, you may not be able to install the completed assembly or system. Also, you risk the chance that a poor quality weld or bent tube will damage the rest of the equipment. If this happens, you could end up spending more money taking out the inferior work, redesigning all the components in the project, and ensuring everything fits into the desired space – all while production is at a standstill.

Lowering Costs with Contract Manufacturing Companies Creating Complex Assemblies

Axenics offers cost-effective component manufacturing solutions to OEMs in several industries. In addition to providing single components for one-time projects, we also offer complex assemblies either as a single installation, or in an ongoing capacity. We find that OEMs realize a wide range of cost savings by using our services. These include:

Lower Operational Costs: You may not realize it, but performing the component manufacturing at your site can actually impact your OEM operations. You need dedicated technicians and workspaces, which decreases the amount of floor space dedicated to your core production processes. Since Axenics can provide tube bending, welding, and sub-assemblies manufactured at our site, you can optimize your industrial space to focus on what you do best — creating end products for your specific industry.

Start-to-Finish Turn Key Solutions: We handle each aspect of the work, including initial design engineering to evaluate space requirements and project specifications, and prototyping services for plastic and metal components to verify the work before moving to manufacturing and testing services. By handling the entire project, you don’t have to worry about hidden fees, overlap with other contractors or extra overhead costs.

Cost Control of Materials: Purchasing limited quantities of individual materials and shipping it to the contract manufacturer, only to have them ship it back to you having it shipped will always cost more than buying materials in bulk and sending them to one destination. Utilizing your contract manufacturing company to handle all the tube bending, welding, cutting, brazing and other component fabrication can keep material costs manageable because they’re ordering in bulk and fulfilling orders based on your schedule.

The advantages of hiring contract manufacturing companies are extensive. Lowering assembly costs is just one solution that we here at Axenics can offer to you.

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