How to Improve Your OEM Operations

11.22.21

Running an original equipment manufacturing (OEM) facility means finding the perfect balance to optimize productivity and efficiency. Since there are always opportunities for change, you may be searching for ways to improve OEM operations.

Educating yourself on the changes in the industry will give you the information you need to set goals. Using these goals, you can make the necessary changes to your operations or management to boost production, protect finished products, and improve worker satisfaction and productivity. Once the needed changes go into effect, you should monitor efficiency to measure the effectiveness of the changes. If successful, your operational improvements can save your facility money and improve the bottom line.

How OEM Operations Are Changing

The first guideline for how to improve management for OEMs is looking at how operations across the industry are changing. Increased connectivity can offer a promise and a problem. Connections with others in the supply chain make the process more transparent. However, any facility with internet-connected devices faces greater cybersecurity risks. Facing these and other challenges are now requirements for OEM operations.

1. Making Supply Chains Resilient and Agile

If 2020 taught manufacturers anything, it was the need to become more resilient. Unexpected events that can affect large regions of the world can impact supply chains. For OEMs that rely exclusively on a set number of suppliers from specific places, the ability to make changes can become difficult due to the rigidity of the supply chain. Becoming more resilient and agile allows companies to more easily weather events that could impact supplies.

For resiliency, OEMs should plan for supply disruptions. Using software to simulate various shortages can help companies to better plan for problems. If a supply issue does occur, OEMs should identify the products with the greatest demand. By prioritizing the production of these products during supply disruptions, manufacturing can continue. Workers on the line will also need training in alternative production methods or using different supplies as needed to reduce decreases in productivity.

Staying agile during supply chain disruptions is another new requirement of OEMs. Designing flexible operations to adapt quickly to supply changes provides an option to continue to meet demand under challenging circumstances.

2. Modernizing Through Upgrading to Industry 4.0

Modernization is an essential aspect of OEM operations today. However, upgrading systems does not mean eliminating human workers. Human employees are even more important than ever. Modern OEM facilities will need to operate seamlessly with Industry 4.0 to maintain the highest efficiency and productivity. To keep things running smoothly, workers will need to operate and maintain the equipment.

Industry 4.0 is the next wave in manufacturing that includes using data to improve operations. It also generates transparency throughout production with connectivity from the beginning to the end of the factory line. For instance, in Industry 4.0, machinery can communicate to alert stations down the production line of possible delays or faster operations. This type of communication prevents bottlenecks.

Another aspect of Industry 4.0 is machinery communicating with people. The devices often use sensors to alert maintenance crews of when the machinery needs servicing. This predictive maintenance reduces unnecessary servicing while optimizing the efficiency of the equipment.

The key component of upgrading to Industry 4.0 is integrating data collection to optimize operations. To remain competitive, companies will need to make these changes.

3. Producing Customized Products to Meet Evolving Consumer Needs

Gone are the days of mass-producing single model designs. Today’s consumers demand even more customization options than ever. Therefore, luxury, base, sport, and other models for cars are becoming increasingly common. With so many options, even for the same model, OEMs will need to adapt their production lines to meet consumer demands. These adaptations may require changing supplies or upgrading production methods to permit multiple versions of vehicle models to go through manufacturing.

OEMs should keep track of the popularity of each option to meet the demands of an appropriate volume of products. Producing too many of a specific model to satisfy consumers can lead to wasted time and unsold products. Knowing what consumers want will reduce the chances of manufacturing vehicles that won’t sell.

4. Meeting Labor Acquisition Challenges

Labor acquisition, especially for manufacturing positions, has become more challenging starting in the late 2010s and into the 2020s. A survey conducted by the industry predicted a labor gap of 113,200 assemblers and fabricators between 2019 and 2029. An anticipated 56,900 job openings for first-line supervisors will open up over the same period. Overall, four million manufacturing jobs will need filling from 2020 through 2030 due to current workers retiring and the industry’s growth. This information indicates that the industry needs moderately skilled labor now and long into the future.

Finding labor to meet OEM facilities’ needs comes with many challenges. Encouraging people to work for them and stay in their positions is a major challenge for OEM companies. They need to find creative methods of enticing new workers to apply. They must also focus on employee satisfaction to retain labor.

One potential way to meet labor challenges is by increasing diversity in the OEM workforce, ensuring inclusion for all. Through encouraging diversity, equity, and inclusivity, companies can attract more people and retain them longer, especially people from diverse backgrounds.

5. Increasing Protection Against Cyberattacks

With machinery connected to other equipment, remote access needed for some, and network-connected computers and other devices in use in a facility, the chances for a cyberattack increase. Protecting the facility against an attack also prevents production shutdowns and other major disruptions that can cost money.

Without a plan to protect against cyberattacks and regularly updating software to keep up with the latest threats, manufacturing facilities put themselves at risk.

Companies must also create plans for responding to cyberattacks against them or others in their supply chains. Flexibility and resilience are keys to weathering these types of storms and maintaining productivity.

Tips for Improving Your Day-to-Day Operations

Your facility doesn’t need to embrace Industry 4.0 overnight to see benefits. You can hone your OEM operations by taking small steps toward improving your daily operations. Integrate some of the following methods into your practices to help your facility’s productivity and efficiency:

1. Create Measurable Goals for Improvement

The first step toward making any changes is to set clear goals. You must have goals that have specific, measurable parameters. For instance, if the aim is to improve production, give the goal a numerical value and a time frame, such as increase production by 10% within the next year. These numbers help you to see how far along your facility is in meeting the goal and if you can reach it by the designated deadline.

Having measurable goals is especially important for identifying the next steps to take in improving your day-to-day operations.

2. Find Trusted Suppliers

If you don’t already have a set of trusted suppliers for your OEM, find them. This includes replacing suppliers who may not meet your company’s needs or requirements. If you receive defective parts or supplies, you could face a future recall and the added costs along with that.

Your ideal suppliers should communicate with you properly and be open to meeting your quality standards. They should also take steps to prevent defective parts from leaving their facility and reaching yours. If possible, they should use similar data collection and interconnected devices that you use in your facility. Data collection ensures you and your suppliers can trace the origins of errors or defective parts and take steps to correct them.

3. Reduce Inventory

Reducing your inventory of supplies is one way to cut waste. Having fewer supplies to store saves space in your facility that could be used for more machinery or office space.

The downside to cutting the amount of inventory you hold is the potential for issues to arise if a delivery comes late or you have another supply chain problem. You can deal with this in several ways. You might request a supplier or nearby warehousing facility to store emergency supplies to use as a backup if supply issues happen. You could also use the chance to shift to another type of production for supplies you do have.

Having multiple sources for supplies could minimize the risks of carrying less inventory since you won’t rely on a single source for the parts you need.

4. Produce Based on Smart Forecasting

Consider adjusting your OEM production using smart forecasting. This forecasting process uses data on previous sales and additional factors to make predictions for future sales. The more data the system has to generate smart forecasts, the more reliable the information is.

Use the forecasted data to plan your upcoming production. In meeting the predicted demand, you can avoid overproducing inventory or not making enough.

Smart forecasting is a way to integrate some of the data-driven technology of modern OEM operations.

5. Protect Production Inventory

With all the time and money you put into creating your inventory, you must take care to protect it, too. Vehicles require careful storage. They require large spaces to store, and you must keep them protected from the weather.

While one option for inventory protection is a warehouse, the interior space can quickly fill up at peak production times. Plus, adding more space to a warehouse is difficult. A second option is storing the cars or trucks outside. However, this action puts them at risk for hail or UV damage.

The best compromise for protecting your production inventory is keeping the vehicles outside under commercial shade covers. If you anticipate needing to expand, you don’t need to build another warehouse. Instead, you can install more shade coverings to protect the vehicles in outside storage.

6. Choose Lean Manufacturing Practices

LLean manufacturing practices can improve your OEM operations by boosting efficiency. These types of practices reduce waste and optimize production. Both large and small companies can engage in these practices. They require fewer upfront investments for production because you’ll keep fewer supplies on hand.

Another form of lean manufacturing is 5S, which in English includes the five steps of sort, set in order, shine, standardize, and sustain. The 5S practice was founded at the famous OEM manufacturer, the Toyota Motor Company, in the early 20th century. This method optimizes the workplace by keeping it clean and organized to improve production efficiency.

Advantages When You Improve OEM Operations

By improving your operations, your facility and company incur multiple benefits. These advantages range from better productivity to a better ability to make it through issues that could impact operations. Taking the time to boost your facility’s operations should produce a good return on your investment.

1. Better Productivity

Improved efficiency leads to better productivity in your facility. When you employ improved operations methods, everything else tends to go more smoothly. For instance, when you have good relationships with your part suppliers, you lower your risk for supply issues. Plus, relying on suppliers who meet your standards can also boost your confidence in your products.

2. Less Waste

Better operations often produce less waste, which can include wasted supplies, unsold products, or trash. When you do not generate as much waste, you have less excessive inventory to store and fewer unused parts. By using less space for storage, you can optimize production with the space you have. Plus, you may avoid excess costs from recycling or disposing of waste generated during production when your facility lowers the amount of waste produced.

Another benefit of producing less trash from your facility is the lower environmental footprint you will create. Being a greener company benefits you and the environment.

3. Improved Use of Existing Workforce

If predictions hold, issues finding workers for manufacturing jobs will remain. However, when you work toward greater efficiency in your facility, you can improve the productivity of the workers you have. Improving productivity can reduce the impact labor shortages have on your OEM operations.

4. Better Ability to Withstand Disruptions

Optimize your OEM operations to become more resilient for supply disruptions to stay productive when other companies falter. Becoming flexible with production and using multiple suppliers can help mitigate risk from inevitable supply chain issues. Whether a blizzard closes roads across part of a state or a truck driver shortage prevents deliveries, supply chain issues don’t have to stop your OEM production when you have contingency plans ready.

5. Need for Less Storage Room

Needing less storage room for extra supplies and unsold products will optimize your space. By using outdoor inventory storage under shade structures, you can save warehouse space for supplies. You can also reduce your inventory and gain more space for adding production equipment, training employees, or providing employee amenities.

When you optimize production, you also make the most of your space. Because the cost of land and warehouse space can be a significant expense for many businesses, improving your space usage to be more efficient allows you the option to reconvert the area to a storage space if you need to expand.

How Commercial Shade Structures Can Help Your OEM

Commercial shade structures can become vital tools to help your OEM. These structures can provide essential protection for your inventory without the need for an enclosed warehouse. Ease of transferring the vehicles for delivery, improved protection from storm and UV damage, and a way to keep the products looking new are only a few of the reasons to install commercial shade structures at your OEM facility.

Easier Transfer to Transportation

Your inventory needs to get on trucks or trains for transport to dealers. However, indoor warehouses make this transfer difficult due to the structure of these buildings. The solution is outdoor storage under a commercial shade structure.

These structures still have supports beams to hold them up. However, you have the option of customizing the distance between these to improve the movement of inventory. Without walls, transport vehicles can more easily get under the shade structures for loading inventory, reducing the exposure of the vehicles to the elements.

Protecting Inventory From Storm Damage

Another benefit of commercial shade structures is their ability to protect the inventory from storm damage. Hail is a major concern in many portions of the country, especially those that receive frequent thunderstorms. 

With hail and storm protection, you can prevent loss of inventory from storm damage, which can help your bottom line.

Providing UV Protection

Ultraviolet (UV) rays can cause sun fading of upholstery in vehicles. Commercial shade structures treated with UV stabilizers reduce the exposure of the vehicles beneath to UV rays. This protection can prevent fading inside the vehicle that some interior materials may experience.

An added benefit of these shade structures is keeping the temperature lower. These structures can keep temperatures down by up to 40 degrees Fahrenheit, even in the heat of summer.

With UV and heat protection, you have reduced risk of damage caused to the vehicles by these elements.

Keeping Products Looking New

Through shade structure protection from the elements, new vehicle inventory does not have the chances of wear or weather damage that it would face when not protected. The products can look new longer when under a protected covering. Consequently, an investment into a commercial shade structure can help to protect the inventory your facility worked so hard to create. With fewer losses, you may be able to meet other goals, such as storing less inventory for lean manufacturing practices.

Contact Us at VPS for Commercial Shade Structures

Start improving your OEM today by finding out more about our commercial vehicle shade protection options. By choosing VSP, you can tap into a resource for getting protection for the vehicles you create. Our structures protect newly built vehicles from the ravages of heat, UV rays, and hail.

We specially design each of our shade structure solutions to your needs. We can space the columns precisely to ensure that you have either haul away or rail access to the vehicles beneath. Contact us today at VSP to speak with one of our experts to find out more and to get started with a free quote.