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.