Outsourcing is an excellent way to improve operational performance and increase shareholder value. Manufacturing companies that choose to outsource some or all of their design, production, and testing experience numerous benefits including improved ROI.
Outsourcing Increases the Quality and Value of Products Produced
Manufacturers often use a contract manufacturer to produce parts or all of a product. Sometimes, only help with design and testing is required. Other times, all of an organization’s production is outsourced. Whatever the case, companies around the world use outsourcing to increase quality and efficiency, while reducing costs.
Outsourcing can generate savings and provide significant economic value for corporations of all shapes and sizes. However, the actual value of outsourcing depends greatly on the quality of products being produced. Working with an inexperienced contract manufacturer can result in lost reputation and low ROI.
Producing products in-house is generally far more expensive than outsourcing. The space, equipment, people, and technology required for production can cost a significant amount of money. Using a contract manufacturer not only eliminates the upfront investment in assets and business processes, it also improves rate-of-return.
Before working with a contract manufacturer, it’s important that everyone in the organization is clear about his or her goals.
Benefits of Outsourcing
Outsourcing is often used to increase the quality of products produced. A qualified contract manufacturer will review design plans to locate areas that could benefit from improvement. This reduces the costs of production and increases the quality of finished products.
Depending on an organization’s goals, there are many ways to increase ROI. Returns might include increased profits or reduced expenses. ROI might also come from the improvement of operational efficiencies, reputation, and brand recognition. All of this and more are possible with the right contract manufacturer.
ROI helps quantify project value, increase stakeholder support, and can lead to project prioritization. In order to realize the benefits of outsourcing, manufacturing companies need to find a contract manufacturer they can trust.
Means Engineering, Inc. has experience working with a number of industries. Our team of engineers and technicians works directly with each of our clients to design, produce, and test a variety of products. We are an AS9100 and ISO 9001 certified contract manufacturer.