Engineers and designers have used die casting as a production process for nearly 200 years. The process produces cost-effective metal parts for low to medium production volumes, making it an excellent choice for a variety of applications.
Because so many engineers and companies recognize the value of this manufacturing process, OEM die casting parts are easy to find. However, there are several things you should know before purchasing any parts. Depending on how often you plan to use them, their cost might be more than you expected.
Whether you’re using die casting as a secondary production method or as your main process, understanding the pros and cons of oem die casting parts can help you get the most from your investment. Keep reading to learn more about what makes these parts so special and whether or not they’ll be right for your project.
What is OEM Die Casting?
The OEM die casting process is also known as the custom aluminum alloy die casting process. It is currently the most common type of aluminum alloy oem die casting parts on the domestic market, and is primarily produced in accordance with customers’ designs and foundry requirements. Multiple manufacturing-related industries, including the food, cosmetics, and electrical appliance industries, as well as the automotive industry, are big users of this method.
It would cost a business a lot of money if it were to design, produce, and market all of its products on its own. This includes equipment, materials, labor, and utilities. The business would also find it difficult to manufacture all of its products in-house if its product range is broad. When you use oem die casting parts , you can delegate manufacturing to a third party and maintain production volume without incurring costs, allowing you to focus on planning and sales. There are two primary categories of original equipment manufacturers (OEMs): contract OEMs and outsourced OEMs.
Manufactured on consignment from other companies
One form of original equipment manufacturing (OEM) is known as manufacturing on consignment from other companies. In this form of OEM, the oem die casting parts are planned by the brand’s designer, but the manufacturer is the one who actually produces them. The manufacturer produces the oem die casting parts to the brand’s requirements and then markets and sells them under the brand’s name.
Manufacturing your own products under another company’s brand
It refers to the process of presenting a manufacturer’s oem die casting parts to the brand side and then producing that product under the brand of another company. In this form of OEM, oem die casting parts are produced for another brand using the OEM’s specifications and then marketed under that brand.
Why Use OEM Die Casting Parts?
The die casting process has had a profound impact on modern industry. Die casting provides flatter surfaces and is more consistent in dimension than other casting techniques. By providing oem die casting parts , the supplying company can meet the customized needs of its customers in addition to those of their purchasers. Since manufacturers deal directly with their customers and have the original design, plan, and blueprint for their parts, using oem die casting parts will ensure the highest quality. The flexibility of oem die casting parts and their ability to produce intricately shaped parts in accordance with customer specifications are their most significant qualities. Castings of this type are also very versatile and are increasingly used in the hardware, mechanical, and electronic industries around the world.
Pros and Cons of OEM Die Castings
Finding an original equipment manufacturer (OEM) to partner with and delegating the job to them is the best method to mitigate risk and save expenses associated with running your own factory. It is crucial to gain an understanding of both the benefits and drawbacks associated with original equipment manufacturers (OEM) prior to hiring one. If you have a complete awareness of the disadvantages, you will be better prepared for any unexpected events that may occur.
First, let’s discuss the advantages of OEM die casting. The original equipment manufacturer (OEM) manufacturer who manufactures the oem die casting parts has several benefits from the OEM, as does the company that gets the oem die casting parts from the OEM manufacturer.
Pros for Companies demanding OEM
1. Even with a limited amount of capital, you can sell products using your own brand name
If you want to manufacture your own brand, you will need to have your own factory to do the manufacturing. On the other hand, this calls for a significant amount of capital, which represents a significant obstacle for newly established businesses as well as small and medium-sized businesses. You can make and sell your own branded products without needing to own your own factory if you contract an outsourcing company to manufacture OEM products for you and have them shipped to your facility.
2. A reduction in expenses
Not only is there an initial investment required, but there are also significant ongoing expenditures associated with owning your own factory. There are costs associated with human resources, the factory itself, and its equipment, as well as costs associated with hiring new employees and providing them with training. By outsourcing manufacturing to an original equipment manufacturer (OEM), businesses can save money on overhead while still meeting consumer demand.
3. The quantity of products that are manufactured can have their volume flexibly adjusted to satisfy customer needs
One more benefit of OEM is the convenience with which production volumes may be changed. It is possible to reduce losses incurred during the production and sales of products by modifying supply in response to fluctuations in market demand. If, on the other hand, you create things in your own factory, you will not be able to produce more than the factory is capable of producing, nor will you be able to readily lower output volume simply because demand is decreasing. On the other hand, original equipment manufacturers have the benefit of being able to adjust manufacturing volume in a more flexible manner.
4. Concentrate your efforts on marketing as well as research and development
It is no longer necessary for a company to devote resources (financial resources, human resources, etc.) to production when production is outsourced through an original equipment manufacturer (OEM). This liberates the company to concentrate on sales and product development. In addition, it is feasible to enhance customer satisfaction by making better use of the additional resources that are available for support.
Pros for Original Equipment Manufacturers
1. Increases in production volume are possible by capitalizing on the market share and name recognition of competing businesses
When a company manufactures and then sells its own goods, the sales force has a significant impact on the volume of production that the company generates. It is consequently impossible to raise production volume without strong sales support, which in turn makes it difficult to expand sales and profits. On the other hand, original equipment manufacturers (OEMs) have the advantage of being able to use the sales force and brand power of another company to increase production volume. This is possible because the other company sells the oem die casting parts products on their behalf.
2. It is possible to lower production expenses
In proportion to a rise in production volume, there will also be a proportional increase in factory utilization rates, which will result in a decrease in the cost per unit of production for each individual product. Not just the original equipment manufacturer (OEM) but also the company that is receiving the supply would profit from lower unit production costs.
3. The capacity for innovation and production is likely to grow
When a commissioning company places an order for a product, the commissioning company will usually offer support in the form of technology, knowledge, including production management, and other essential information for the development of the oem die casting parts product. As a result, it is possible to gather manufacturing technology that one’s own company does not possess while simultaneously getting a request for production. In addition, original equipment manufacturers are able to concentrate on production when they receive OEM orders, whereas businesses that require OEM services are free to concentrate on sales. This allows the original equipment manufacturers to expand their technological capabilities in production.
Cons of OEM
Although there are many benefits associated with OEM, there are also some downsides. We will now discuss the downsides from the original equipment manufacturer’s (OEM) perspective, as well as the downsides from the perspective of the original equipment manufacturer’s (OEM) production customer.
Disadvantages for companies that demand OEM
There is no way to establish technical capabilities for production or development. When an organization places an order with an OEM supplier, it runs the risk of being prevented from developing its own production capabilities. This is due to the fact that production is contracted out to a third party. Another disadvantage is that it is difficult to establish development capabilities when production is commissioned based on the technology of the OEM manufacturer. This is a significant limitation.
OEM Manufacturers’ Disadvantages
There is no possibility of developing in-house branding and sales capability.
One of the advantages when original equipment manufacturer (OEM) production becomes the primary business is that one may anticipate an increase in production capacity. On the other hand, one of the disadvantages is that it is difficult to create one’s own brand. Since the company is no longer selling its own products, there is a greater possibility that it will suffer from a disadvantage, such as a reduction in its sales capacity or a halt to its expansion.
The outsourcing company decides the amount of production they will outsource. Only in response to orders placed by consignors do original equipment manufacturers (OEM) manufacturers make any products at all. Therefore, there will be a gradual decline in the volume of production if there is a reduction in the number of requests received. Additionally, if the consignor company stops handling the product, it is possible that production will be discontinued.
Wrapping up
The advantages and disadvantages of oem die casting parts must be understood, and OEM’s maximum potential must be tapped if a company is to maximize the benefits of OEM. If you are considering starting a business that will deal with die cast parts, you will be able to determine whether or not original equipment manufacturer (OEM) die casting is what you require in order to get started with your business. This will help you decide what you need to do in order to start your business successfully.
