Third party versus original manufacturing

When you are seeking to save money what are some of the areas where you look? Do you focus on cutting costs on your production process or do you look into cutting employees and other resources? One area where you may be able to save money is by comparing the costs of third party manufacturing to original manufacturing.

Third party components can help you to save a lot of time because you won't need to purchase different equipment and machinery in order to produce it. With a third party, you are able to buy a specific piece and then assemble it into your design or other things. Investigate the company thoroughly in order to see that you will be able to save money and that this will be an effective program for your company to turn to. Warranty options and needs are another thing you must focus on when you are looking into third party versus original manufacturing. Some third party companies will provide a warranty and you will need to pass this onto your customers or risk being held responsible for the errors and mistakes that may arise. Product defects can be devastating to your company and since you aren't actually manufacturing the products, figuring out how you can prevent the defects can be frustrating. Interview the third party about the way in which their company is manufacturing products so you can see if they are taking care of product defects by using a system like lean manufacturing.

How is the part approved by a manufacturer? You need to explore the different ways in which the part is created and how it will satisfies the needs of the customers and also the needs of your company as well. A very complex manufacturing process may be a little more difficult to manage and will take more involvement than what you might have originally hoped for. Does the company have a dedicated facility where they manufacturer the products? A dedicated facility isn't needed but it is nice to have because you will be able to learn more about who is making the products and if they have the same safety standards as your organization does.

What are your current manufacturing costs? Are they too expensive to justify keeping the manufacturing plant in operation? If you already have high costs, you need to change to third party as it can save you a lot of money. Do not just focus on the large manufacturers as you can find a lot of smaller manufacturers that will be able to help your organization. Work out a shipping arrangement where you can save money so you don't end up just breaking even where you used to with your old plant. If you are breaking even, you might as well keep your plant open because at least you know what type of safety standards and other things are in place. This way you have control over product defects and to ensure that the products are made in a correct manner.

After taking time to understand what the costs are, you can then start getting price quotes from manufacturers in order to see where you stand. Look through catalogs to see what parts they will offer but you also need to do some research into their company reviews and other things to see that they are a good company to work for and that they will be able to provide you with quality products.

Losing control over the manufacturing process can be a bit of a frustration but if you end up choosing the right third party manufacturer you will be able to save money and to have a great contract.