Original equipment manufacturers (OEMs) use sub-assemblies to increase efficiencies to the production line. When outsourced to an experienced third party provider, sub-assemblies can prove to reduce production time, increase quality metrics, and decrease costs.
When sub-assemblies are outsourced through a third party, the OEM will see a reduction in the time to complete a production build. To further increase efficiencies, the OEM may choose to have sub-assemblies strategically sequenced to the production line. By reducing its overall time, the OEM can increase its speed to market, customer service, and efficiencies while also reducing its cost to produce.
With outsourced sub-assemblies, the responsibility of inspection and testing moves to the provider. Each item is checked to OE specifications before shipping to the production line, saving the OEM in quality-related labor and costs. Additionally, continuous improvement initiatives at the supplier level allow for quality assurance throughout the lifetime of the product.
From procurement, to sub-assembly, to shipment, the OEM can save significant amounts on inventory carrying costs. Furthermore, the labor and overhead necessary to complete these tasks is greatly reduced.
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