Before doing OEM decision, brands must be on its own core competitiveness and enterprise development strategy for further analysis.
Here is guangzhou XJ Beauty cosmetics manufacturer
OEM lead you together analysis brands main consideration strategy: asset utilization.
How to make use of existing assets and realizing the maximization of the value of the company?
Enterprise should put money into building and enhance the core competitiveness of the business, and in expanding the productive organization a lot of investment is not always the best way.
Investment in equipment requires a lot of money, and the associated infrastructure investment is a big number.
For end users, the value of brands is to provide meet the demand of its products and services, brands only optimize the combination of production and service already can satisfy the need of customers.
The enterprise culture.
If a company operating in high-end organization environment, the need to attract and retain advanced technology and talent, the same approach to the production environment is not very economic.
And outsourced production more efficient.
Manufacturing process is becoming more and more complex.
Manufacturing process of an increasingly complex and changing has a huge demand for funds, responsible for the effective management of the manufacturing system by experts and grasp the technical trend.
If brand manufacturers to invest in a particular assembly process, it will tend to apply this technology to the future of products, and other related technology or design method choice is quite limited.
Streamline material management process.
Adopts the way of OEM production, brand manufacturers will reduce the cost on the material management of energy.
Brands management only the final product, you can focus on the downstream, namely on the sales forecast, and meet customer requirements.
For brands, OEM is an effective method, in order to reduce the market changes, demand forecast deviation and the risks of product technical change.
Due to avoid the equipment and other fixed assets investment capital and production, brand manufacturers to precipitation to minimize the possibility of funds.
Lower total cost.
Brand manufacturers to seek cooperation with suppliers, usually can achieve lower total cost.
This is because the funds needed for the supplier can be input and fixed cost allocation to many customers, so as to improve the service efficiency of funds.
Because of a single brand manufacturers only burden the actual use of production capacity, production than in internal, fixed costs become variable costs, avoid the formation of sunk costs due to production investment.
From the tactical analysis, OEM model can immediately cut the most advanced technology, because the supplier have a ready-made equipment and training good staff, as a result, brands do not exist to buy equipment, hire and train employees.
Other tactical considerations include: fast to enter the market and expand production.
Through the OEM, brand manufacturers can concentrate on market development, accelerate the speed of entering the market.
Utilizing the capacity of suppliers of equipment and human resources to form, the time needed for the shortest production expansion.
Immediately to expand capacity.
When market demand suddenly increased significantly, brands can take advantage of the supplier's production rapidly improving capacity, avoiding the preparation because of a long equipment and staff training cycle and loss of market opportunities.
By the OEM, brand vendors will reduce inventory items and occupy a space, significantly improve inventory turns.
Along with the increase of the degree of OEM brands can even virtual factory in a state of the operation, transferring most of the material management activities to suppliers.
Homemade and outsourcing cost analysis.
Although based on considerations of strategic factors, the general direction has been determined.
But when considering OEM, specific self-control and outsourcing cost analysis is crucial.
To get complete information on internal cost, brands should form a cross-functional team from various departments, the team should include from production, testing, design, material, quality, accounting and finance. cosmetic design
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