One of the main decisions that original equipment manufacturing (OEMs) companies face is whether to manufacture their electrical components, such as custom cable harnesses, in-house or to work with a supplier.
Putting together a dedicated in-house team and process is not always feasible for most OEMs. That’s why in today’s fast-changing and competitive market, many OEMs are using a custom cable harness supplier to lower costs and improve their bottom line.
While there are many factors to take into consideration and no one true answer when choosing between internal manufacturing and outsourcing, there are some clear ways how working with a custom cable harness supplier can benefit your business.
6 Benefits of outsourcing custom cable harness manufacturing
Custom cable harness suppliers are also known as contract manufacturing organizations (CMOs). When you contract a custom cable harness supplier you get to outsource the manufacturing of this core electrical system component instead of producing it internally.
In simple terms, outsourcing is a business practice in which a company entrusts a business function to a third party. In this case, we will discuss why many OEMs collaborate with cable harness suppliers to fulfill their cable harness manufacturing needs.
Here are 6 benefits of using a custom cable harness supplier for your OEM business:
1 Lower costs
In-house manufacturing leads to higher costs for your business. Among these costs are the costs of hiring the needed expert staff and purchasing and maintaining the necessary equipment and factory space. Not to mention the depreciation and overhead costs.
All of these activities require a large initial capital to set up and maintain. You need to take each of these expenses into account when making the decision whether to outsource or not.
In addition, with internal manufacturing, you will need to reach out to suppliers for material sourcing and might not get as good of a price as a large manufacturer can. Large custom cable harness manufacturers typically buy in bulk for several clients, so they are able to negotiate better prices. While you will only need to purchase to satisfy your own demand needs.
However, outsourcing eliminates the need to invest in new infrastructure, technology, and staff. When working with a custom cable harness supplier you get access to skilled labor, material, and specialized equipment at lower costs.
2 Increased product quality and safety standards
When you choose a custom cable harness supplier that has been in business for a long time you will get access to specialized knowledge and expertise that they have accumulated during those years. This expert-level specialization means that they have a proven quality management and supplier vetting system in place. So you can be sure that your products will be of the highest quality and will comply with your industry’s safety compliance standards.
Nevertheless, it’s important you choose a suitable and reputable custom cable harness supplier for your business needs. We’ve compiled a list of questions that can help you make this decision.
3 Design assistance
An established custom cable harness supplier will have a lot of experience working with similar projects. This can be a competitive advantage for your business as they can provide you with product recommendations and industry best practices during the product design process.
Moreover, you may also need design assistance during the testing phase. A custom cable harness manufacturer will enable you to test different prototypes and make the necessary adjustments to the final product.
This will be like having an extension of your own engineering team.
4 Operation flexibility and scalability
Manufacturing demands can fluctuate depending on the constantly changing market and business needs. Keeping up with these unpredictable changes can be difficult and costly if you’re manufacturing in-house.
For example, if there is a demand increase in the market you will need to respond in real-time in order to take advantage of it and boost your revenue. This means you might need to hire more staff, purchase new equipment, change your production scheduling, and so on. This whole process can be costly and time-consuming.
Whereas, outsourcing allows you to quickly react and adapt to these ever-changing production demands, at a lower cost. This way you can quickly bring products to market faster, or reduce your production to save costs – while not having to worry about fixed and overhead costs.
5 Increased efficiency and streamlined processes
A specialized custom cable harness manufacturer that has been operating for many years has efficient processes in place that lead to lower costs and higher productivity. This process of fine-tuning can take years to reach. However, it can significantly lower the product manufacturing lead time and costs. As a result, your products will reach the market faster.
In addition, a custom cable harness supplier will take many processes off your plate – from vetting suppliers, negotiating rates, managing expert teams, and more. As such, you can drastically simplify your business operations and focus on your core competencies – which takes us to the next point.
6 Increased innovation
As we mentioned above, the internal manufacturing of parts requires a lot of resources, especially in terms of time and money. Purchasing your custom cable harnesses from a supplier instead of manufacturing them internally will free up a lot of resources that you can use to invest in research & development and strategic planning to improve innovativeness in your core business areas.
In conclusion
The question of whether to work with a custom cable harness supplier or build these components in-house is a question that all OEMs face at some point. The optimal choice will be specific to every company.
However, when you consider factors such as cost, product quality, safety standards, operation flexibility, and efficiency, it is clear to see that using a custom cable harness supplier can provide many benefits for your business, including:
1.Lower costs
2.Increased product quality and safety standards
3.Design assistance
4.Operation flexibility and scalability
5.Increased efficiency and streamlined processes
6.Increased innovation
By finding a suitable and reliable manufacturing partner you can start reaping the benefits of outsourcing.
