Traditionally, firms would invest in plant and equipment to set up their own factories. That’s because there was no other way of doing it. If you wanted something done, you had to build it yourself.
However, thanks to the advent of the modern economy, that’s all changing. Now you can contract out manufacturing to third-parties, and get them to do all the leg work for you.
As you might expect, there are both pros and cons to this strategy. However, most firms now agree that it is better to outsource than to attempt to do everything yourself, in-house. Here’s why.
Better Costing And Turnaround
Can you honestly say to yourself that you know how much it costs to run a manufacturing operation? Probably not.
But that’s not true of outsourced manufacturers. Services can provide you with detailed cost estimates, plus likely turnaround times. They can even work to your deadlines by prioritising your brand’s production over their other clients. (Just be prepared to pay more for it).
Manufacturers may also offer other benefits. For instance, if you build a factory yourself, you’ll still need to deal with suppliers and distributors. You’ll have to arrange for shipments to arrive on time and then leave when you plan.
Again, that’s not true of outsourced manufacturing. They deal with these aspects on your behalf, taking over as much or as little of the process as you require.
Packaging solutions are also available, according to brands like Omniblend. Factories will create bespoke designs for your products, based on the brief you provide.
Reduced Labor Costs
Hiring labor to run a factory is expensive. Modern operations require engineers, managers, material workers and many other professionals. Trying to hire all of this yourself could potentially bankrupt you.
Again, you can skip all this expense and hassle by outsourcing your manufacturing. The plant simply takes your order (along with those of the rest of its customers), thereby spreading the cost. You’re not having to fork out for workers that you might not need. Instead, the factory owners themselves bear that risk.
Easy To Scale
Scaling is also less stressful when you outsource. If one production line isn’t enough to meet your needs, the production company can simply open another. Many firms operate multiple sites and can tool them in a way that allows you to place variable orders. They may also offer inventory so that you can do a large run and then wait for your stocks to deplete before doing another one.
Faster Lead Times
How long would it take you to set up a factory and produce goods for consumers? Probably a year at an absolute minimum.
But when you outsource, you can slash turnaround times dramatically. In many cases, you can get products into consumer’s hands in a matter of weeks. Rapid prototyping and CNC machining means that manufacturers have the technology they need to bring your product to marketing quickly.
In summary, therefore, there are some compelling reasons why you might want to contract out your manufacturing. It saves time, cost and could actually make your brand more profitable.
Photo by Daniel Smyth