In today’s booming automotive aftermarket, OEM lubricant manufacturing has become an important model for brand operation. How to avoid risks and choose high-quality partners in the mixed market of OEM? This article will delve into the rules of brightness and darkness in the OEM market, providing professional decision-making guidance for brand owners.
1、 Five dimensional evaluation system for screening high-quality contract factories
Technological barriers and innovation strength
High quality contract manufacturers need to have international certification qualifications such as ISO/API, independent laboratories, and patented technology reserves. Taking a leading enterprise as an example, it is equipped with cutting-edge equipment such as spectral analyzers and four ball friction testing machines, which can accurately control core indicators such as viscosity index and wear resistance, ensuring that its products pass rigorous certifications such as ACEA and ILSAC.
Full chain quality control system
A full process quality control system should be established from raw material procurement to finished product delivery. International giants such as Lubrizol and Runyinglian account for over 85% of additive procurement, with over 60% of base oil using Class III+oil, far exceeding the industry average of 40% for Class III oil usage. The OEM factory needs to provide a complete SGS testing report and batch tracking system.
Flexible production capacity
Examine the production line configuration and response speed of the factory. High quality contract factories should have modular blending devices that can achieve flexible production of different batches of 200L-1000L, with delivery times controlled within 7-15 working days. Urgent orders can be delivered within 72 hours.
Value added service system
Leading contract manufacturers provide comprehensive services from formula customization to packaging design. Including anti-counterfeiting QR code implantation, exclusive VI system development, and some enterprises even equipped with intelligent warehousing systems, supporting VMI management mode for packaging materials, helping customers reduce inventory costs by 30%.
Logistics network layout
Prioritize selecting contract manufacturers with multimodal transportation capabilities. A certain OEM base in East China has achieved 24-hour delivery in the Yangtze River Delta region and 48 hour coverage in the central and western regions through its proximity to deep-water ports, reducing logistics costs by 18% compared to inland factories.
2、 Business logic for selecting OEM regions
Industrial cluster effect
The lubricant industry belts in Zibo, Shandong and Taicang, Jiangsu gather 60% of global additive suppliers, with supporting enterprises within a radius of no more than 50 kilometers. This cluster advantage can reduce packaging costs by 0.8 yuan/liter and save 15% of raw material costs compared to decentralized procurement.
Capacity gradient matching
For newly established brands with an annual demand of less than 500 tons, it is recommended to choose medium-sized contract factories with a monthly production capacity of 300-800 tons. These types of factories are flexible in accepting orders, with a minimum order quantity as low as 5 tons, while top tier contract factories typically require a minimum order quantity of 100 tons or more.
Policy Depression Dividend
Some industrial parks in the Pearl River Delta provide tax rebate benefits for OEM projects, such as a 40% rebate on the locally retained portion of value-added tax, combined with export tax rebate policies, resulting in a comprehensive cost optimization of 12-15%.
3、 The underlying reasons for the prevalence of ODM mode
Transfer of research and development costs
Developing a new formula requires a research and development cost of 2-5 million yuan, while under the ODM model, the brand only needs to pay a development fee of 100000 to 300000 yuan. A certain second tier brand expanded its product line from 3 to 28 SKUs within three years through ODM mode.
Intellectual Property Game
A typical ODM contract stipulates that the formula patent is jointly owned, but the production process patent belongs to the OEM factory. This model creates a technological moat for contract manufacturers, and as a result, an international brand has been tied to a single supplier for up to 7 years.
Market response speed
When the National VI standard is implemented, brands using ODM mode can complete the launch of SP level products within 3 months, while independent research and development enterprises take an average of 8-12 months.
Conclusion: The essence of OEM cooperation is the construction of a symbiotic value system. The brand should establish a supplier evaluation model that includes 22 key indicators and conduct regular quadrant analysis. In terms of quality control, it is recommended to implement “three-level control”: raw material incoming inspection, monitoring of key process points, and audit of finished product shipment. Only by penetrating the industry’s surface and building strategic partnerships can we achieve win-win results in fierce market competition.
