Contract assembly is an approach in which a firm hires an outside manufacturer to produce components or final products based on the original manufacturer’s design. Assembly contracts operate differently than typical manufacturers. Contract manufacturing combines semi-finished products to produce a final good or product.
What industries utilize contract assembly?
The electronics industry uses private label manufacturers to outsource manufacturing from all around the world. A final product might say “Made in China” but the individual products can be outsourced to different countries to create the final product.
Nearly 50% of all car manufacturing is done off-site by contract manufacturers. Many automotive companies do not build all of the components to the vehicle, as these products are outsourced.
Pharmaceutical and Nutraceuticals
Contract manufacturers produce chemicals for various products. Likewise, equipment for these pharmaceuticals and nutraceuticals are commonly outsourced to contract manufacturers.
The food industry uses contract manufacturing to develop packaging for various food products.
Contract manufacturers put together and assemble products for consumer use.
Assembling and packaging games and puzzles.
Mechanical assembly for industrial products such as tractors and other farming equipment.
Peoria Production Shop’s Capabilities
Peoria Production Shop is a midwest company that has been providing solutions to original manufacturers problems for nearly 80 years. These manufacturing issues extend from inadequate packaging, to shortage of procurement, and even poor lead times with auto-labeling, repackaging, and shipping.
Peoria Production Shop (PPS) is ISO9001:2015 certified for 15 years, focused on quality products, processes and continual improvement. We provide gold-level quality services to Fortune 100 manufacturers such as Caterpillar, Inc. PPS provides kitting, mechanical assembly, packaging, labeling, and sewing with capabilities to customize your assembly needs.
The coronavirus pandemic has allowed Peoria Production Shop to tap into new resources within the medical field to provide hand sanitizers, spray bottles, masks, and other personal protective equipment (PPE). The increased need for PPE has sparked the company’s interest in working with local hospitals to help those on the front lines of the pandemic.
Additionally, PPS has recently incorporated games and entertainment into our manufacturing capabilities through the production of products for companies such as Lux Blox and Dagz Dice Game. PPS would like to enhance our services in the beauty industry and has manufactured shaving and pedicure products. Likewise, PPS has recently expanded our square footage and has invested in new machinery for auto-labeling.
Recently, PPS has provided packaging solutions for companies that experienced shipping problems such as a window package that was not properly packaged, allowing a carrier to damage the product before it reached the customer. PPS worked closely with the client to create a new design that eliminated breakage and would otherwise have been a high cost for their in-house packaging and repackaging.
PPS has also recently entered the subscription service industry. We assemble, package, and fulfill products for subscriptions such as razor companies. Contract assembly is the heart and soul of Peoria Production Shop. We work with manufacturers to create product solutions that companies face each and every day. At Peoria Production Shop, the focus is on creating jobs, not profits. As a not-for-profit organization, Peoria Production Shop focuses on being the leading provider of jobs for people with high-functioning disabilities. Contract assembly allows for these individuals to work together to create products for manufacturing companies while achieving social and financial independence.
Peoria Production Shop offer 80 years of experience in providing solutions to companies of all sizes needing contract assembly and outsourced processes. We offer assembly, kitting, sewing, packaging and shipping with tight inventory control, lot code traceability and stringent quality processes. Contact us to learn more about our many solutions including experienced contract assembly.
With over 1 billion drivers in the world, the automotive industry is constantly creating new products to keep up with the ever growing demand for vehicles. The high demand to keep up with competitors requires automakers to outsource products requiring assembled components to specific contract assembly house companies.
How Does a Contract Assembly House Work Within the Automotive Industry?
Outsourcing Contract Assembly
Automakers tend to do final assembly of larger components such as cockpits, seating, and front-end modules, although OEMs regularly outsource many smaller components such as electro-mechanical switches, buttons, and light cover housings, for example. OEMS receiving pre-assembled components on time ultimately lowers working costs with efficient material handling and inventory control.
An area where outsourcing has continually made sense for the automotive industry is in safety, such as airbags and seat belts. The reason that automakers outsource these types of services is due to the contract assembly house specializations, experience, and expertise in cost-efficient assembly. These items are assembled and shipped ready for automotive OEMs to install.
By outsourcing contract assembly to an experienced assembly house, automotive manufacturers can focus on their higher-level product manufacturing and assembly. Outsourcing specific products to assembly providers allows OEMs to specialize and concentrate on higher level product offerings. The use of contract assembly allows for more resources directed to design, engineering and development departments for continual improvement of vehicle manufacturing processes.
Automakers that outsource smaller part assemblies realize many benefits such as reducing working capital requirements and lowering operating costs. By partnering with a quality focused contract assembly house, OEMs maintain their level of quality and timely deliveries. The right contract assembly company will provide a mutually beneficial relationship with OEMs where both experience growth in sales and profitability.
Peoria Production Shop offers a diversified range of services such as various sewing capabilities that allow us to use our resources to provide safety measures for the automotive industry. An example of our diverse services is the opportunity that PPS has had to create bus dividers amid the coronavirus pandemic. We are proud to have the capabilities to provide safe and useful features for transportation.
We differ from other assembly houses in our diverse range of services and ability to adapt to your specific needs. Furthermore, PPS can do multi-step assembly processes which could be used to develop products for axle and suspension models. PPS focuses on jobs not profit, therefore we strive to lower overall assembly costs for original manufacturers.
Overall Return on Investment
One study finds that tier-two and tier-three system suppliers contribute more to the overall value of a vehicle than the original manufacturer does. Partnering with an ISO9001:2015 registered company reduces risk in OEMs outsourcing assembly, giving them an advantage over competitors with valuable partners in their supply chain helping to reduce costs.
The automotive industry is continuing to grow with more and more drivers on the roads. Automotive manufacturers need to wisely utilize all resources to keep up with continued growth. Carmakers who choose to outsource the right assemblies and focus on the most profitable aspects of their automobile assembly will remain competitive and profitable with more flexibility.
Peoria Production Shop has been a valued supplier to OEMs in the automotive industry with vast experience in lean contract assembly. We follow a strict quality policy as part of our ISO9001:2015 registration and a commitment to delivering quality product, on-time at the most economical cost available. Contact us to learn how to improve your supply chain with an experienced automotive contract assembly house.
As a third party registered to ISO9001:2015, Peoria Production Shop carefully inspects and ensures quality for their manufacturing clients. Contract assembly with multiple components requires the need for accurate material tracking and consistent quality control.
There is a good chance that manufacturers will experience challenges when fulfilling custom orders such as precision design requirements, the need for prototypes, or quick production and assembly of multiple components to complete a finished product. It is important to understand how a multi-step contract assembly house can help to solve some of these problems.
Peoria Production Shop has been solving multi-step contract assembly needs for manufacturers of all sizes for 80 years. Over that time, PPS has been providing solutions to the following problems:
PPS is a gold-level quality supplier who works with clients to produce high-quality, assembled products. The company works with Fortune 100 manufacturers and other clients who put their confidence in PPS year after year.
Our Multi-Step Contract Assembly Quality Control Process
Receiving and Inspection of Raw Materials, Product Components
Raw parts go through a Production Part Approval Process (PPAP) and are generally level 4 which contains: Dimensional Test Results, Material Certs, Process Flow Diagrams, Parts Submission Warrant, Control Plans, and Process Failure Mode and Effects Analysis (FMEA).
Lean Multi-Step Assembly with VSM Practices
Peoria Production Shop conducts Value Stream Mapping (VSM) procedures to eliminate bottlenecks with lean assembly processes. Our large, modern facility affords room for expansion and the ability to customize assembly processes. We cross train employees who are dedicated to a job well done with meticulous attention to detail.
First Article Inspection
Once products are approved, we conduct a first article of inspection on all new parts. As a quality minded multi-step contract assembly house, we will perform quality checks per customer supplied requirements.
We perform random quality checks on incoming parts and assembled components, including internal quality control checks on parts in process.
Creating Detailed Work Instructions
Detailed work instructions and standard operating procedures (SOP) are created with images and step-by-step direction.
Quality Guidelines in Work Instructions
Within the work instructions, we have quality guidelines that a certified inspector performs with quality control checks throughout the process.
The internal inspections are then analyzed for different quality metrics and also we look for any trends.
Lot Tracking with ERP System
We Segregate parts and components into product families then assign Key Performance Parameter (KPP) numbers and a description to the products. The KPP is based on the corresponding work instruction quality guideline for tracking purpose. Our Enterprise Resource Planning (ERP) software provides tight inventory control with lot code traceability of all components.
We track Capability Index (CPK), Parts per Million (PPM)
We track these key performance indicators and other quality metrics, depending on customer requirements. We aim for zero defects and ensure all assembled components are to exact customer specifications.
A final inspection is performed before releasing the assembled products to the shipping department. With 17 shipping and receiving bays, we offer a controlled flow of material with final inspection upon palletizing and shipping preparation.
Peoria Production Shop guarantees that all products have gone through rigorous quality control checks and procedures. We use a five-year supplier capacity plan to ensure the products are manufactured to the company’s guidelines. We take pride in delivering high-quality products with on-time delivery, all while meeting rigorous performance standards. Contact us for all your multi-step contract assembly requirements.
Outsourcing contract assembly has been the answer for many companies when it comes to reducing operating costs. Subcontracting is a way for companies to compete with large competitors on sub assembly processes out of their niche, with profitable product development.
Reduced Labor and Overhead Costs
Labor costs are among the most outstanding costs for companies. To cut costs, companies can entrust in firms with lower labor costs and specializations in assembly.
When deciding to perform secondary processes in-house, companies must consider labor, rent, utilities, insurance, supplies, shipping, customer service, management time, and software needed to perform inventory control and shipping. Whereas, outsourcing a job to a company that specializes in those areas reduces overall costs. Companies will not have to dedicate valuable in-house resources to assembly and secondary operations. Not all companies have the financial resources to supply the equipment, personnel, and process technology required in-house.
Contract Manufacturers Specialties
Contract manufacturers specialize in spotting potential risks and flaws within the company’s product. Outsourcing assembly allows for innovation without exhausting all internal resources. These manufacturers have the ability to provide low-cost and high-skill labor.
Contract manufacturing provides specializations to products that need more attention or solutions that companies might not have the resources to consider. Outsourcing allows companies to do what they do best all while ensuring great quality service. Contract manufacturing meets deadlines and helps with quality control so the original manufacturer can focus on the customers.
Outsourcing Contract Assembly Allows Focus for New Opportunities
Subcontracting assembly allows for the company to take on new projects that could have potentially held them back due to the need to bring attention to other products.
Outsourcing contract assembly allows for more capacity for design and engineering. As previously mentioned, subcontracting gives manufacturers the ability to focus on many opportunities. Simply by hiring a contract assembly firm, OEM’s can reduce costs of inhouse resources.
Efficiency among outsourcing contract assembly
Outsourcing assembly allows for fewer sourcing and shortage issues. Fortunately, these companies focus solely on the product supplied so start-up time is immediate. Original equipment manufacturers (OEM) use third-party providers to increase efficiencies in the production line. By reducing the overall lead-time, the original manufacturers can increase speed to the market and customer service.
These are only a few of the many reasons to consider outsourcing contract assembly. At Peoria Production Shop, we have been given the opportunity to work with many different manufacturers through expansion, diversification and recent investments in new, automated machinery and equipment.
We offer a wide range of secondary operations such as contract assembly, kitting, commercial sewing and many other processes which improve product quality and profitability for OEMs. We provide solutions to a multitude of industries such as equipment manufacturers, automotive industry, entertainment, food and beverage, beauty, medical, subscription services and many others.
Peoria Production Shop is a valuable supplier to many industrial supply chains, with ISO9001:2015 quality policies guiding our high-quality service. We find solutions for companies with services offering better product quality and less expense than what they could do in-house. Contact us to learn how we can improve your supply chain with the many benefits of outsourcing contract assembly to an experienced, quality-minded contract assembly company.