Outsourcing of manufacturing operations is a common practice today because it offers flexibility— the ability to change products or processes rapidly— and can often save money by exploiting economies of scale or other favorable cost factors offered by the contractor. There are two approaches to outsourcing: a single process step or group of steps may be performed by an outside resource (heat treating, for example, or electroplating) or the entire manufacturing process might be contracted to a third party. In either case, the manufacturer relieves demand on its own plants and can concentrate on its core competencies— which might not include volume manufacturing—while its partner(s) provide the resources for producing products.

Depending upon your current resources and circumstances, outsourcing a part of the manufacturing process could save you from having to expand your manufacturing space (perhaps even adding a new plant), searching for and hiring experienced resources, training the new hires and paying various expenses involved in ramping up a new production line or process. Capital assets can become a liability in a fast-changing marketplace. As customer demands and technologies change the nature and makeup of products, it can be an advantage to not be tied to a relatively inflexible physical plant.

For companies large and small, the goal is to become a world-class organization and to be able to compete in today’s global markets. For manufacturers, the fastest and easiest way to achieve this goal is through partnerships with companies that have attained superior capabilities in particular phases of the process—like production. By partnering with world class contract manufacturers, you can reap the benefits almost immediately—well-managed processes, high quality, on-time deliveries—and increase your performance and expectations. At the same time, you can focus your own resources on the things that you do best—product innovation, design, marketing, distribution, sales or manufacturing.

Keys to Success in Manufacturing.pdf