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Outsourcing parts of your manufacturing process

Manufacturing is typically a process where raw materials are turned into a product. However, occasionally, you will see manufacturing where finished parts are taken to create a different finished product. This is basically outsourcing a part of your manufacturing process.

There are pros and cons to outsourcing part of your manufacturing process. Let's take a look at them.

1. You need fewer employees, which means reduced costs. You need fewer employees because you do not need someone to make these parts for your product. You also need fewer employees because you will not need a whole other assembly line, or system for making that item. The fewer items produced on site, the less help needed.
2. It is faster. When you want to make a product, it takes time. Think of a car manufacturer. If someone else made all the parts, the carburetor, the starter, the battery, valves, etc. and all they did was assemble it, it would go a lot faster then making all of those things on site, and then assembling them. So, your start to finish goal is faster. (Although, in reality, you are waiting for those parts to be made, you are just not waiting on site).
3. Can save you money. This is a sticky area because it does not always save you money. In some cases the item could be made on site for relatively inexpensive, and cutting out the middle man means reduced costs. However, in other cases there is the need for tons of equipment, people to run it, the raw cost of materials, etc. If you only need a limited number of this item, then the cost to produce it yourself would be extremely high. It is like someone who buys clothes. If you were to buy only one shirt, it would cost less to go to a store, then to make it yourself. Why? Because to make it yourself you would have to buy a sewing machine, all the tread (which comes in bigger quantities then you would use for just one shirt), scissors for fabrics, pins, patterns, etc. However, were you to make a thousand shirts, it would be less expensive to make them yourself than to buy them. So in some cases, where a limited quantity is needed, outsourcing is better. In other cases, you lose money.

1. You lose the control. When you make everything you need onsite you control when it is made, when you receive it, who makes, the quality, etc. You can guarantee things better like time lines and quality of product, because you are responsible for these things. If you manufacture all the parts, and then outsource the assembly, you can't guarantee things will be assembled the way you want. So, this makes hoops to jump through, and checks, etc. that would not be in place otherwise.
2. Cost. As discussed earlier, unless you only need a small number of items produced, assembled, etc. it is always less expensive to do it yourself, but time and man power may be an issue, and thus the cost is worth it.

Outsourcing, and outsourcing only a part of your manufacturing is common, and is something to consider, often you can get less expensive labor somewhere else, and thus outsourcing is profitable. So, consider it, and look into your options, and determine if there will be more pros or cons for you to outsource a portion of your process.

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