The concept is quite simple yet invaluable to many firms. OEMs manufacture parts or subsystems for other companies to use in their end products. This idea is important to companies in several ways.
First, a company specializing in the manufacture of a specific component or subsystem will build resources and conduct research and development (R & D) where they are ‘subject matter experts’ of that particular subject or product. This criterion means that the buying company purchasing from an OEM doesn’t have to support the R & D or manufacture of those products. Obviously, this can reduce the buying company’s cost when manufacturing end products.
Likewise, the buying company can use the selling company in other ways to reduce costs for their own business, i.e., inventory, drop-shipments to different divisions, etc.
MSCS has practical experience working with OEM companies. We understand the issues and opportunities presented by and for OEMs.
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Manufacturing and Supply Chain Services
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