Why OEMs Should Capitalize on the Benefits & Efficiencies of Receiving Pre-Built Sub-assemblies

Original Equipment Manufacturers (OEMs) are always looking for opportunities to decrease costs and improve production efficiency – and outsourcing sub-assemblies can achieve both of these objectives! A sub-assembly is a collection of smaller parts that are put together to make a part that is later incorporated into a final product. When outsourced to an experienced third party, such as RiverStar, sub-assemblies are proven to reduce product lead times, increase quality, decrease inventory costs, and enable growth. Let’s dig deeper into the key benefits of receiving pre-built sub-assemblies and how RiverStar can make these efficiencies a reality for you.

Cut Product Lead Times

A large amount of time can be spent designing, tracking, and assembling the components required to build sub-assemblies. If the OEM is responsible for building the final product, as well as all of its parts, this can significantly extend the time it takes to build the finished product. When sub-assembly builds are outsourced to RiverStar, production bottlenecks within the OEM are relieved and the OEM no longer has to dedicate its resources to sub-assembly builds – resulting in lower final product lead times, increased speed to market, and lower production costs.

Elevate Quality Assurance

When OEMs outsource sub-assemblies, the inspection and testing responsibilities shift from the OEM to the sub-assembly provider.  Sub-assembly units are inspected to ensure the required specifications are met before shipping, saving the OEM in quality-related labor and costs.  If OEMs undertake these builds themselves, they will likely need to extensively train staff as many builds require extreme attention to detail to complete and use of special equipment.  OEM personnel may feel stretched too thin or under pressure to meet deadlines, increasing the potential for human errors that result in costly new builds and extended deadlines. By outsourcing the work to RiverStar, OEMs can rest easy knowing their parts are being built and assembled by experts who have access to the right equipment, and have the right procedures in place to ensure excellent quality assurance.

Streamline Purchasing and Reduce Inventory Costs

OEMs that build their own sub-assemblies bear the cost burden associated with procuring and storing the raw materials, as well as storing the sub-assemblies and finished products once they are built; additionally, the OEM is responsible for all labor, facility, and equipment costs associated with these activities. RiverStar builds your time-consuming sub-assemblies and releases the orders to your production lines when you need them.What once required numerous OEM personnel to manage multiple skus, multiple suppliers, and schedule manufacturing time to build sub-assemblies can be outsourced to RiverStar and delivered to your production lines completed as one part number.  Your forecasting team can then focus on singular skus, and collaborate with RiverStar when you need delivery.

Additionally, RiverStar provides a steady supply of sub-assembly parts that are ready for use – allowing you to pay only for what is needed rather than overstocking parts or running short and having to pay extra for expedited delivery. This not only reduces the amount of storage space required, but also decreases the number of inventory dollars tied up in sub-assemblies.

Enable Growth

When the sub-assembly builds occur off-site, OEM personnel will have more time to dedicate to other tasks and production can progress more rapidly. The time it takes to assemble units can be reduced significantly, which means OEMs can complete builds at a faster rate and increase production volume – this is particularly advantageous when sales increase as customers will be able to depend on a reliable delivery.

OEMs must be flexible in order to grow their business. They need to get new products to market quickly and be nimble when supply and demand changes.Unfortunately, the level of time, resources, capital, and leadership attention required by manufacturing operations limits how flexible and responsive an OEM can be. Once the sub-assemblies are outsourced, the OEM will no longer be constrained by internal capacity, and will have confidence that every sale will be delivered as promised – improving customer and OEM trust and partnership. And OEM business leaders are no longer distracted by production line issues and can focus on topics that truly matter to business growth: product development, marketing, and sales!

 

Riverstar is an experienced contract manufacturer providing solutions that range from building sub-assemblies that are delivered to factories across the world to building products start-to-finish. We have an extensive track record of on-time delivery, continuous improvement and quality controls to meet your expectations. OEM’s utilizing our sub-assembly services benefit from our vast supply network, parts management, inventory models and project management expertise to build sub-assemblies that fit into their manufactured products. Once assembled, we distribute the ready-to-be-installed sub-assemblies back to your factory or supply them directly into your dealer network.

RiverStar can help improve your bottom line – call us at (507) 452-5109 or complete the form here.