photo of cold drinks in case

Going down the OEM route, for a supplier of refrigerated units makes perfect sense. The parts required are cost-effective, particularly when it comes to the all-important voltage stabilizers that guarantee the investment made in an commercial refrigeration unity, the competition keeps prices low and there are always OEM vendors willing to pick up any dropped orders.

On the face of it the only choice the refrigerated units supplier faces is one of cost. It could be argued that since his primary job is to supply commercial refrigerated units at as low a cost as possible his primary aim should be to source OEM parts at the lowest cost possible. But there are deeper considerations that also affect that decision.

A commercial refrigeration unit is a sizable investment at any price. In order for that investment to pay off for the customer it has to remain operational for its full expected lifespan. In addition it has to work regardless of the conditions in its location. Commercial refrigeration units employed in developing countries with a utilities infrastructure that’s either aging, obsolete or undergoing periodic adjustments, experience fluctuations in voltage and other adverse conditions that have long been dealt with in most developed countries.

The use of OEM parts that do not, in this case, meet some very specific requirements endangers both the commercial refrigeration unit and the reputation of its supplier. Any immediate savings enjoyed by employing lower cost voltage stabilizers (and the logic applies to all other OEM critical parts) are soon wiped out by falling orders, fewer customers and a smaller market share.

The problem is serious and it is made even more serious by the fact that the true cost of employing cheaper OEM parts that fail the grade becomes apparent only in hindsight.

So the question really is that barring developing a close, sustained and on-going relationship with its OEM design manufacturer how does the commercial refrigeration unit supplier gravitate to the right choice in the first instance?

Unsurprisingly the answer to this is by taking into account five diverse but intricately connected considerations:

  1. Problem solving – the lack of effective problem solving (and a track record to prove it) in the OEM design team suggests that they are poor at innovating, doomed to repeating the same mistakes and unlikely to take heed of any variations in their customers’ requirements.
  2. Quality Management – most OEMs sample-test their designs. That means that they consider a percentage of failures acceptable. While this may be a market principle, when it comes to commercial refrigeration units the cutthroat market conditions make it a requirement that the failure rate of refrigeration units due to OEM design parts is either negligible or zero.
  3. Product Development – reputable OEM design firms have processes, methods and tools to design, validate and launch new products including parts, assemblies and systems, quickly, efficiently and at a controlled cost. OEM firms that can’t do this either fail to invest in their production process or fail to invest in their teams. Both of these are likely to create issues with any core product offerings at some point.
  4. Response to Customer Specific Requirements – customer specific issues are part of the OEM design company’s feedback system. They help in the development of OEM products that have stable core components and functions and wider tolerance levels than most similar products in the field. OEM companies that don’t know how to effectively use the information they get through customer requests to improve what they do are unlikely to produce good enough parts or even products in the first instance.
  5. Experience and Reputation – the reputation of any OEM design company precedes it (as reputation always must) but it is its in-house experience and expertise that allows it to display flexibility and innovative spirit when called upon. Companies that cannot demonstrate that are too limited in what they do and too constrained in their way of operating to truly be able to meet the challenges faced by a customer deploying a fleet of commercial refrigerated units in the challenging environment of a developing country.

These five considerations become the litmus test that will save the commercial refrigerated units supplier from costly mistakes as he makes his choice of OEM design companies, in that first instance.