Blog Details

Why choosing an OEM Supplier is like making a strategic hire

As an OEM, choosing your suppliers is more than just choosing the first warm body you find.  It requires a similar skill to making a new strategic hire.  If done correctly, both will lead to a long-term relationship that benefits everyone.  APX prefers creating long-term relationships where we understand and appreciate each other’s business and work as a team to ensure quality, delivery and pricing that benefits all.

The question is: How do you choose an OEM Supplier?

In our field of sheet metal fabrication, there are still sub-specialties.  Many sheet metal fabricators can cut, bend, weld and finish parts, but some cannot handle certain types of materials (no galvanized) or certain sizes of sheets (nothing over 60 inches) or certain thicknesses of materials (nothing over 11 gauge).  APX handles almost all materials and sizes.  We do light structural fabrication as well making I-beam compressor bases and tubular structures.

When it comes to finishing, can your OEM supplier fit your parts onto their powder coat line or into their oven?  APX has very large ovens that can handle machine enclosures up to 8.5 feet high, 9 feet wide and 20 feet long.  Painting your part in one piece improves final quality.

OEM suppliers also specialize in their volumes.  Some OEM suppliers are setup to handle high volumes of parts while others are setup for low volume production runs.  Some OEM suppliers can manage inventory while others produce only to order.  Choose the OEM supplier that can cater to your specific needs.

The main factor to consider when choosing an OEM supplier is the people.  What culture do they have?  Do they have a transactional culture or a more personal, customer-service oriented culture?  Does that culture fit the OEM’s needs?  High volume OEMs appreciate transactional OEM suppliers, providing the quality, delivery and price are maintained.  The best OEM suppliers are those who never cause a disruption to your supply chain.

Additional things to consider when choosing an OEM supplier is lead time.  We all know that orders do not come in a nice, equal cadence that makes planning easy.  OEM suppliers that produce only to order may have lead times that vary according to their backlog.  There are other OEM suppliers, like APX, that work with their customer forecasts and produce ahead to avoid the pains of not being able to deliver parts on time.  These are all things that should be discussed ahead of time before choosing an OEM supplier.  Consider how accurate your own forecasting is.  Some companies have accurate forecasts out 6 months or more while others struggle to have an accurate forecast each month.   Discuss these with a potential OEM supplier so both know what they are getting into before the first part is manufactured.

While software has made maximizing yield from raw material, you may want an OEM supplier that has on-staff engineers who can help with design suggestions that reduce cost, reduce waste and improve quality.  Not all OEM suppliers can do this.

Not all OEM suppliers can do assembly, electrical work, integration of fans, air conditioners, etc like APX.  Would that save the OEM time and money?  That is a key discussion point.

Does your OEM have additional capabilities like metal machining?  APX owns two metal machine shops that support our metal fabrication business and vice-versa.  This is powerful and allows for fabricated parts with machined precision.  An OEM supplier that does not need to outsource such work has a clear advantage over those that do.

Finally, choosing an OEM supplier like APX may not be suitable for your business.  Hundreds of OEMs currently work with APX for their needs because the fit is right and each customer is treated like an individual with an employee culture that understands each customer.

So, do your research, make your decisions wisely and understand that if you truly want a long-term partnership, treat OEM supplier selections the same way HR treats strategic hiring.


Blog Post's