By Stan Roach
Manufacturing inevitably demands large overheads, but is outsourcing the most efficient option? For many businesses, the answer is a resounding yes. Managers can focus their efforts on business growth, using a reliable supply partner to take over processes such as a plastic injection molding service. Here, we’ll look at the five most compelling reasons to consider outsourcing your manufacturing to help determine if it’s the right option for your company.
1. Outsourced Manufacturing as a Scalable Business Model
The first advantage to outsourcing is that your business has fewer constraints when expanding product ranges, taking on new clients, or offering increased volumes in high-demand periods.
For in-house production, your limiting factors will likely include:
- Storage space for raw materials
- Operating hours
- Floor capacity and the number of machines
- Staffing and expertise
By outsourcing, you remove those obstacles and can cope with surges in supply, as you’ll have the ability to contract new suppliers if your business continues to grow.
2. Improving Efficiency Through Outsourced Production
Handling production internally can lead to inefficiencies, without identifying ways to streamline operations. Typically, this happens due to a simple lack of time or capacity to see where the business could improve. Manufacturing specialists have a greater range of equipment and tooling. They will dedicate a proportion of resources to efficiency to ensure every production run is as economical as possible.
Factory environments designed specifically for manufacturing may also offer alternative assembly resources, resulting in faster production, lower costs, and greater responsiveness to changes in demand.
3. How Outsourcing Manufacturing Reduces Costs
One of the most significant benefits of outsourcing is that it can substantially reduce business expenditure.
Examples include:
- Lower labor costs
- Reduced utility costs to run machinery
- Fewer training expenses
- Decreased QC requirements
- Removal of the need for real estate to house production equipment
- Reduced raw material costs due to economies of scale
- Less demand for insurance coverage and security contractors
While selecting a manufacturing partner that offers regulatory compliance and assurances such as factory audit certifications remains crucial, it may be considerably more cost effective to produce parts and components off-site.
You may also find that those cost savings enable your business to invest further in research and development or other business priorities.
4. Using Outsourcing to Develop Innovation Opportunities
Manufacturing evolves quickly and often. Accomplished production facilities offer ways to innovate by providing tools, flexible production scheduling, and prototyping resources to support businesses in developing products or techniques.
Working with a professional manufacturing partner opens up access to their skills, knowledge, and tools, with countless ways to finesse your products, materials, and processes.
Companies that are not manufacturing experts often find it impossible to compete with innovations from more experienced production teams, so outsourcing can create a meaningful advantage.
Innovation is also easier with fast access to skilled prototyping, enabling team members to see their ideas brought to life, encouraging increased drive to develop pioneering concepts.
5. Increased Staff Capacity to Focus on Core Business Activities
Manufacturing products or parts is a full-time business in itself.
For many companies, manufacturing processes detract from the core business objectives, leaving little capacity to grow in new areas.
Outsourcing production allows teams to refocus towards those larger goals to help achieve your company vision.
If you worry that your product management teams are spread too thin, shifting manufacturing to a trusted partner will free up their time.
Then your teams can use their extra time to concentrate on what they do best and keep driving the company forward through testing, marketing, engineering, and design.
Disadvantages to Outsourcing Product Manufacture
Like any business decision, it’s worth examining the potential pitfalls before choosing whether to outsource production.
Businesses can easily overcome the possible downsides by working through due diligence exercises when selecting a production partner:
- Quality control: it’s vital to have robust QC measures in place to ensure every product or part manufactured off-site meets your standards and regulatory stipulations.
- Shipping: most experienced production businesses will offer various transport methods to meet your business needs. However, international logistics can be complex, so it’s essential to clarify expected delivery dates when setting up a new agreement.
- Public relations: manufacturing regulations and labor conditions vary widely around the world. Businesses outsourcing production overseas should always conduct inspections or audits to verify the suitability of a manufacturer before outsourcing their production supply.
Overall, the advantages of outsourcing manufacturing can make a profound difference to businesses seeking lower operating costs, greater efficiency, and more capacity to concentrate on growth.
Choose the right production partner, and you will be in a great position to work on business expansion plans, with the confidence that your manufacturing processes are all under control.
