What you should know about outsourcing manufacturing
Many different kinds of companies are turning to using outsourcing for their manufacturing needs. This can be done in several different ways. The company that is looking for outsourcing may only want a single component of a product done in another location or they may be looking for an outsourcer that can do the whole product for them. However, before you simply choose an outsourcing manufacturer it is important to consider several different things. Here is what you should know about outsourcing manufacturing-
• Don’t allow price to be the determining factor-There are many different things that you need to consider far beyond the price of the outsourcing. While most companies are looking for an outsourcer in order to reduce the cost of manufacturing not every outsourcer will save you money. You need to carefully consider many different factors before you simply decide on an outsourcer based just on price. While price should be considered you must consider the adage that you “get what you pay for” and choose an outsourcing company carefully.
• Know the companies that you are considering-Just like anything else that you consider for your business you need to look at multiple options for your outsourcing needs or in other words “shop it around”. Keep in mind that as you look at various outsourcers you may want to consult with an auditor who can help you take a close look at possible candidates. The auditor will help you to make sure that nay outsourcing company that you are considering is maintaining the quality and ethics that you see as important. Some auditors are experienced in companies that work overseas so they can help you work through any barriers that may be cultural.
• Understand the challenges-There will be a variety of new challenges as you work on finding an outsourcer. A few of the challenges that you may come across include but are not limited to:
1. Making sure that the outsourcer is using a high quality material that will be effective in whatever they are making for your manufacturing business.
2. Determining what process they use for both internal and external audits.
3. Knowing what management processes they use.
4. Knowing what they do to make sure that continuous process improvement is occurring.
5. Determining how they control documentation throughout their organization.
6. Knowing how they identify wastes, what control procedures they use, and how they dispose of it.
7. Determining how they recruit, hire, and train their employees. You should also be aware of how they treat their employees since this can vary dramatically from company to company.
• Focus on quality control-It is crucial to understand that your focus will need to shift to working on quality control. The bottom line is that if your outsourcer is making a product that falls below your standards you are simply wasting your time and money. Whether you work alone or with an auditor you will need to look closely at the following areas with any outsourcer that you are using. These areas to examine are-
1. Health and safety
2. Employee morale and pay
3. Allocation of the workforce
4. Quality of resources
5. Management structure
6. Conditions in the establishment
7. Business licensing
8. Legal procedures
9. Company history
11. Local infrastructure
If you are going to be dealing with an international outsourcer it is advised that you work with an auditor. This person can help to insure that the outsourcing is following the guidelines that you have set up. It also help keep pressure on the international company to live up to the contract guidelines that you have set up.
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