According to the latest news, China, again, is the world’s largest manufacturing country, keeping its position for 11 straight years. It’s no secret that most companies, from SMEs to Fortune 500 corporations outsource their OEM manufacturing to China. OEMs can help a business keep its production at a reasonable price while maintaining the processes effectiveness.
What is OEM?
OEM, an acronym for Original Equipment Manufacturer. By its basic definition, an OEM is a manufacturer that specializes in making a particular product or part for another company that provides it with the design and specifications. Traditionally, an OEM works on a business-to-business (B2B) model. Therefore, an OEM part is manufactured to order.
How to Work with OEMs?
When you decide to outsource production to China, you need to reach a local contract manufacturer (CM) with good reputation in manufacturing field. More importantly, they have the capability and expertise to manufacture your product. Then, you should decide to work with an Original Equipment Manufacturer (OEM).
Why do You Need to Establish a Reliable Relationship?
Maintaining good relationships, known as Guanxi in Chinese, with the suppliers and the factories is valuable. Guanxi loosely translates as personal connections, relationships or social networks. Having good, bad or no guanxi impacts one’s influence and ability to get things done. Moreover, it makes more economic sense for foreign business because you will benefit a lot from the relationships.
In China, having good business relationships can help you to build long term success, and benefit from: better pricing, better product quality and partially protect your IP.
Protect your IP
Even you own your Intellectual Property (IP), there is still a possibility that the IP and trade secrets are missinging while manufacturing in China. In order to safeguard your most critical assets, you need to have good connections with the OEMs. Because the last thing you want is that your unique designs and specifications are stolen by copycats.
Get the Production Priority
Image a serious businessman with cold communication and an easy-going businessman with cordial relationships that are about the reach a Chinese OEM with the same production quantity, which one you think the Chinese OEM would likely to work with at the very beginning? Usually, the latter one has more chance to take a step forward. Because Chinese people prefer to work with the one can deal with local business networks.
As the supply shortage due to the pandemic, the world needs China to manufacture products as soon as possible. In this case, if you have a better connection with the OEM, it would be possible that you get the production priority.
Partner with C2W
Building relationships takes patience. You will have to invest time in building those relationships. If you need to know more about OEM Manufacturing and how to find the best OEM partners for your business, feel free to reach out to us today and see how we can help.
