Many businesses have long struggled with whether they should keep their manufacturing services in-house, incurring all the debt and risk that comes with maintaining their own production line, or outsource their manufacturing services to an outside party. Unfortunately, it can be difficult to determine a clear-cut answer when you try to fully balance the cost with the control a business gains from owning their own production processes.
In today’s competitive market, more and more businesses have elected to reduce their cost and improve their profit margins by working with a single-source manufacturing partner. While these types of relationships can vary from industry to industry, they often come with a few inherent advantages that can benefit businesses over the long term. Let’s take a look at a few of the ways outsourcing manufacturing can benefit a business’ overall production.
Improved Focus on Core Competencies
Far too frequently, internal productions teams find themselves spread far too thin. By moving manufacturing responsibilities to an experienced single-source manufacturing partner, a business can free up their highly skilled personnel to focus more on the tasks at which they excel – marketing, testing, engineering, design, etc. They are the type of crucial tasks that help to drive a business towards future success.
Access to Better Expertise
Successfully manufacturing specialized components can require overcoming unique challenges that may go beyond your team’s internal capabilities. When you partner with a manufacturer that specializes in a specific field or industry, you gain access to all of that knowledge and insight. During the design phase of your product, your partner can make recommendations on how to improve the quality or design of a product, boost manufacturability, or improve your speed to market.
Established Safety and Quality Standards
To establish a solid foothold in any market, a business must have complete confidence that their products are being held to the highest possible standards for quality, safety, and compliance. Outsourcing control can be one of the scariest parts of partnering with an outside manufacturer. Fortunately, any reputable manufacturing partner will have a proven Quality Management System in place, along with all the necessary accreditations from the FDA, ISO, or any other oversight body. By taking the time to properly vet any potential partner, you can find comfort in knowing that the manufacturing of your product is in good hands.
Lower Labor Costs
Outsourcing manufacturing doesn’t just reduce the cost of labor for those on the machine shop floor. It also reduces the burden placed on your HR department on hiring, firing, and training. It frees up more of management’s time, it cuts back on paid sick leave, worker’s comp claims, holiday and overtime pay, and a host of other common labor costs. Hiring your own internal manufacturing team comes with a much higher cost on your business’ time and resources than simply your employees’ salaries.
Quickly Scale Down or Increase Your Production Size
As 2020 clearly demonstrated, production demands can increase or decrease due to a variety of hard to predict factors. When manufacturing is handled in-house, scaling up or reducing down production, depending on your current needs, can cost a lot of money. It takes a massive amount of effort to quickly increase production as you need to hire additional skilled employees, purchase new equipment, and expand operations. Yet, once you’ve made this investment, having to scale back production can mean losing money overall. When you outsource, scaling up or down isn’t a concern. You have far more flexibility to quickly meet the demands of the market when every decision you make doesn’t carry an internal cost.
Save Money on Not Buying Equipment
Software, machinery, repairs, updates, and a host of other issues related to asset management can carry a significant cost and investment. By outsourcing your production, you don’t need to make any large equipment purchases or expend the money it takes to keep the equipment properly serviced and running.
Selecting the Right Partner
Finding the right manufacturing partner is a process that’s unique to each business. You need to consider whether outsourcing production can impact and improve your operation, or whether it makes more financial sense to keep your operations internal. Fortunately, the team at Mantec is here to help.
With over 30 years of experience, Mantec has provided our clients with an unparalleled experience thanks in part to our continued commitment to customer services. Contact our team today to discover more about what Mantec can do for you.