If you’ve come to this blog to learn about the ins and outs of outsource manufacturing, you’ve come to the right place.
Outsource manufacturing is the process of hiring people or organizations outside of your company to manufacture parts and products, assemble parts into products, or to build entire products for you and your company. The biggest reason a company would consider outsourced manufacturing is to save money…in labor, overhead and production costs.
Outsource Production? Or Manufacture In-House?
There are many ways manufacturing companies can benefit from outsourcing their production…the biggest reason being cost savings. Typically, businesses will opt to manufacture their products or particular parts for their products in the hopes of making their fixed costs fully variable. The rule of thumb is that if any aspect of your production line has the potential to be completed quicker and at a cheaper cost elsewhere, it’s best to consider outsourcing than to keep production in-house. We’ve listed some additional benefits of outsourcing below:
Outsourcing will allow key management and business owners to spend a majority of their focus on the company’s critical operations, core mission and new product development.
Outsourcing allows the flexibility to redirect your company’s time and assets to more value-add/value-centric activities.
Especially for smaller businesses, outsourcing certain manufacturing can serve to reduce or eliminate high-cost fixed capital assets, as well as non-value-add activities, which will increase cash flow and decrease working capital consumption.
Supply Chain Improvements
From a supply chain standpoint, global integrators allow huge opportunities to take advantage of low labor cost manufacturing, reduction of manufacturing lead time by offering localized stocking programs, and ensuring the integrity of the quality of the products/assemblies/finished goods that your company purchases. Do some research to find the top rated global suppliers in their respective business segments. Their ability to ease concern and risk out of a global supply chain will ensure they are not what keeps you up at night.
Here at BI Connections, we are proud to be the best in supply chain services. We provides supply chain solutions for unique manufacturing challenges by lowering your costs and improving your productivity. We give you both the peace of mind and confidence to know that your finished products will be of the utmost quality and at the best pricing the world has to offer. To learn more about how us can act as your Global Sourcing Integrator, contact us today.
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