Mastering manufacturing: how to work with contract manufacturers

First things first, let's decode some industry jargon. When it comes to outsourcing manufacturing, you'll often come across terms like OEM, ODM, and OBM. But what do they actually mean?

• OEM (Original Equipment Manufacturer): factories dedicated to manufacturing products according to third party designs. In essence, skilled craftsmen behind the scenes who produce your product.
• ODM (Original Design Manufacturer): ODM factories not only produce goods but also present their own designs to the market, allowing you to place your branding on them.
• OBM (Original Brand Manufacturer): OBM factories go a step further by not only manufacturing products but also branding and marketing them under their own label.

MOQs refer to the minimum number of units a contract manufacturer is willing to produce per order. MOQs vary depending on factors such as product complexity, materials and production capacity. When sourcing an OEM manufacturer, we always inquire about their MOQ requirements upfront to ensure they align with your business needs and budget. Our partners at https://www.productionheroes.nl/ have a global network of Original Equipment Manufacturers ready to begin production collaborations with relatively low MOQs. And whom can also scale up with our clients if the volumes increase. Keep in mind that the type of product you're developing greatly influences the MOQ. For OEM manufacturers, it needs to be worthwhile to set up a temporary assembly line for your production run before moving on to the next order. Additionally, component suppliers, particularly in electronics, typically demand orders of at least a few thousand units, which are usually the smallest feasible quantities.

For most products, making custom molds and tools for series manufacturing is necessary and often expensive. When we work with contract manufacturers, we always make sure that our client contractually owns the molds in which they invest. Such contracts also include who's responsible for maintenance of the molds and repairs if they get damaged. Keeping ownership molds gives our clients more control over where they produce. And it also means they can easily make mold changes if needed for whatever reason. Another aspect of importance is to keep track of shot warranties for molds. Production Heroes excels at this task. They ensure our clients are informed well in advance when a mold is wearing out and when it's time to invest in new ones. Since making new molds takes months, this proactive approach prevents situations where our clients run out of stock and can't produce more products in time at the OEM manufacturer.

When outsourcing manufacturing to Original Equipment Manufacturers, keep these tips in mind:

• Stay flexible and adaptable during tooling and manufacturing. Collaboration helps overcome unexpected challenges efficiently.
• Clarify responsibilities between you and the contract manufacturer to ensure accountability and efficiency.
• Establish protocols for issue handling, dispute resolution and open communication throughout the partnership.
• Regular factory visits are essential for transparency, relation building and quality control. Production Heroes can handle this task if desired.
• To mitigate the risk of unauthorized copies by the OEM, consider in-house assembly, delivering molded components yourself or installing crucial product software/firmware in your own facility.