Did you know that businesses in the construction, transportation, and warehousing industries have the highest failure rates? A lot contributes to this from running out of working capital to not having the operations capacity for the projects they bring in.
When it comes to things like product assembly and quality assurance, it can be easy to overwhelm your capabilities. These are reasons why companies of all sizes are looking into outsourcing their assembly needs.
There are, however, more reasons to make this move for your operations than only having something taken off of your plate. Keep reading as we go through the top reasons for outsourcing your product assembly needs.
Increases Flexibility Within Your Company
As demand changes, so do supply needs. This is something that your outsourcing team would have to address versus your operational and in-house manufacturing team. This alone is what will allow for a much wider capacity for flexibility and operations.
Businesses have to be able to adapt to the needs of their market. What this means is knowing what to focus on and when.
This could be marketing, finance, or other departmental projects. Everything that your outsourcing team will be doing means less strain on your in-house staff.
It will allow businesses to operate on more flexible schedules without needing to accommodate workers on their own. Also, if your business model needs to pivot in a new direction, this is easier to do when you aren’t keeping up with warehousing costs and processes.
If you start offering different products compared to other things you’ve done before, this will also be more attainable. Overall you’ll have flexibility across your entire company. This is also one of the top benefits of outsourcing product needs.
Offers More Streamlined Strategic Optimization
With outsourcing, you are no longer going to be stretching your teams too thin. Businesses will have the opportunity to optimize their strategies when it comes to marketing.
They can do the same for fulfillment and client relations as well. Your team will now be able to focus on the other processes that make up the core of your business.
For a lot of manufacturing companies, this often includes product testing and engineering. Outsourcing also gives teams more time to put into design and design deliberation.
Errors can be reduced at the design phase if nothing is missed before it’s pushed to assembly. When you shift the burden of assembling products to an external team, you are receiving value that shows quickly and compliments the additional time you will get.
Reductions in Operating Costs
One of the most beneficial advantages of outsourcing assembly is the reduction in product assembly service costs. You can expect to see a decrease in fixed costs that you wouldn’t normally see if you were keeping everything in-house.
Even if you outsource your sub-assembly needs, you can still expect to see a much lower cost for production. There will also often be higher production rates.
Wanting to achieve savings in operational costs is more than enough need for businesses today to hand off their assembly requirements. However, if your business has a lack of internal resources or needs to refocus its strategies, outsourcing should be your chosen method of production and fulfillment.
This makes it easier for a business to expand and compete with other companies regardless of size or network. Outsourcing offers operational teams the chance to even the playing field with both direct and indirect competitors.
Significant Savings on Training Costs
When you outsource product assembly, you will be getting a team to handle those assembly needs. Having a team already in place will reduce costs.
It will also eliminate the need for you to coordinate and implement training. This concept will even help you to save on both operational and opportunity costs.
The team that you get will be trained on these processes already which is why there is no overhead cost for providing training. Without the need to provide this type of accommodation, it doesn’t have to alter your budget.
On average, businesses are spending a minimum of $1,252 per new employee. This cost covers the most basic type of training.
For more specialized industries like construction or manufacturing, that average cost will obviously increase. Taking that off of the table can remove a potential financial burden from your company.
Enhances Ability to Meet Compliance Requirements
One of the most dangerous areas for companies when it comes to manufacturing is staying in compliance with different policies and regulations. Companies that specialize in outsourcing already have safety standards built into their methods.
These standards are what upwardly drives its high-quality outputs. When you can relinquish the internal need to monitor compliance, you will save overhead costs and reduce risk.
Developing and implementing a quality management system can be taxing on any business. This is especially true if they are not familiar with how to do so.
Sustaining this type of program can also be tricky and can be more difficult than you would think. You have to be able to comply with regulations around your state’s policies as well as policies regarding the products you make. Partnering with the right outsourcing team can help to remove this hurdle altogether.
One of the main concerns for company owners is the cost of outsourcing product assembly. However, the benefits of outsourcing these services are significantly more cost-effective than they are draining. When compared with other alternatives as well as high labor costs to form an assembly line, outsourcing will often show as the more affordable choice.
Company owners have to consider the cost of more than just labor. They have to factor in equipment and maintenance when needed.
You also can’t ignore the cost of warehousing and the potential for product batch redo’s. Each of these factors can be very costly, especially for a smaller business or a new company.
Reducing floor labor isn’t the only thing that will help with achieving quality products when you outsource. You’re going to be making the supply and demand for your products more predictable as well. As a business owner, this will also make it easier to scale as your business grows.
With that, your business will be able to experience improved efficiency and optimization opportunities. Not to mention that you will also notice efficiency in your ability to hire.
At a fraction of the cost of forming an operation like this and running it around the clock, you’ll have more flexibility to hire a dynamic and expert team. This cuts down on recruiting, training, and additional hiring needs.
Productivity Will Also See A Spike
A product assembly service that you do not have to manage or oversee means an increase in productivity. When you see a spike in productivity, this means your employees can focus on other areas. This also means that your departments can be more flexible and it will be easier to implement other business processes when you do not have to manage the largest one.
Business owners have to also consider that the company’s improvement metrics will spike in multiple segments. This includes storage needs, streamlined management, and development.
You will also notice better utilization of HR resources. Something like this can be beneficial for smaller companies.
The same goes for smaller organizations with more limited budgets. Overall, your organization will have higher productivity ratings that will allow for better support to match market demands.
At least 66% of large businesses are outsourcing their services in general. 29% of smaller organizations are doing the same. Doing this for assembly needs can help to free up your resources.
This is also what will help your team to reallocate its strengths where it’s most needed. With outsourcing, you are going to receive state-of-the-art equipment. Businesses will also get staff, software and hardware, and management.
With all of this tallied up, the overhead cost is still significantly less than what you would pay year-round for each of these payment segments if you were doing it on your own.
Reduction in Risk and Errors
Between 30% and 40% of businesses end up failing within their fifth year. Some of the most well-known mistakes made in different areas of manufacturing are assembly that isn’t done correctly.
This usually follows the design phase and is one of the reasons why a QA program is important. This is also something that you get when you outsource.
The initial setup process is another area that is a hot spot for errors. Mistakes like this are costly and can run a company thousands of dollars if not more if product batches have to be redone.
Having to restart the product assembly will often involve a duplication of that budget. That also isn’t money that the business would see again.
Flaws in labeling and errors in measurement and inventory can also be taxing on assembly service lines. You have to consider the negative impact of the lack of expert guidance on quality product assembly as well.
Considering the Risks
With certain errors, you will notice that a lot of them are human errors. There are just as many risks involved to add to the concern. Some of these would involve the risk of product reliability, product compliance, as well as technical risk.
Sourcing the materials you need and the proper components from different vendors can be hard to navigate as well. When you outsource product assembly, you eliminate these potential problems.
The benefit of outsourcing lies in the ability to hand off a major portion of what your business does. This means that you can expand your operations to other areas. You can even save money and eliminate areas of struggle.
Increases the Ability to Achieve New Innovations in Your Business
Outsourcing increases innovation by giving you the chance to hand off more than one of your primary processes. It allows your teams to focus on development versus production.
You eliminate the need to keep up with manufacturing day-to-day tasks. This is also what leads to better innovation. As mentioned, teams will have the opportunity to focus more on product design rather than product assembly alone.
Strategic outsourcing can also help businesses to lower their innovation costs. This could be a driving factor for the 90% of small businesses looking to outsource. The wait times for new product designs will see a reduction because of this.
Deadlines will be easier to meet for certain teams and the release of products will also be simpler to keep up with. Outsourcing assembly is innovative for your business processes. The same goes for business development and product delivery.
Access to Expert Input
As mentioned, when you opt-in for outsourcing your product assembly needs, you will be assigned a team for your company. This gives businesses the opportunity to tap into a large network of experts in a certain industry. Having this expert input is what drives the savings that you will see.
These specialists also help to drive efficiency and optimization within your workflows. Having access to experts like this will almost guarantee improvement in your company’s performance.
You can also expect a reduction in risk factors that you may have seen without specialized guidance. Businesses may even potentially see additional savings. This is because they will often make more sound decisions on the materials and components to be used throughout production.
Quality Product Assembly at Your Finger Tips
Having to do everything in-house can be difficult for some manufacturing companies to process on their own. This is especially difficult for small teams that have to consider not just product assembly but multiple designs and releases at once.
Instead of doing it all on your own, work with the Shield Works team to expand yours and achieve precision in your products and higher customer satisfaction.