There are over 577,000 manufacturing businesses in the United States. Yours is one of them.
As a manufacturing business owner, you know how important manufacturing is to the American economy. However, keeping the lights on in your business isn’t an easy task. There are lots of challenges you need to overcome, including production.
Have you considered outsourcing production as a way to overcome most of the challenges your manufacturing business faces? If you’re on the fence, we’re here to help you cross over.
Continue reading for a guide to what you stand to gain when you outsource production to a third-party company.
1. Direct and Indirect Cost Savings
If you’re not outsourcing your manufacturing, you’re doing it in-house. There’s nothing wrong with this. In fact, there are some significant benefits, such as being able to splash the “Made in America” label on your products.
Unfortunately, there are big cost implications to handling your own production. You have to set up your own manufacturing plant, which can cost millions of dollars. There is routine maintenance and repairs to account for, and you need to maintain a production team.
There are warehousing costs too because you need to store the raw materials and the finished goods.
When you outsource, these costs vanish from your balance sheet. You’ll have to pay your outsourcing partner a big sum, sure, but in most cases, it will be a fraction of what would you have spent on local manufacturing.
Production facilities in highly industrialized nations like China are efficient and the cost of labor is lower than in the U.S. Read more about outsourcing product assembly in China before choosing an outsourcing partner.
2. Access to Manufacturing Expertise
Manufacturing isn’t a layman’s job. If you don’t do it right, the results will show in the quality of your end product. Nobody is going to buy a half-baked product.
When setting up a manufacturing plant from scratch, you’re bound to make some mistakes. It takes time to fine-tune your plant and ensure everything works perfectly.
Why go through this trouble when there are production facilities that have plants that can start making your product immediately? These facilities have great in-house expertise, meaning they can reconfigure their manufacturing systems in record time to accommodate your unique needs.
3. Quality Assurance
A big concern among business owners who’re hesitant to outsource production to China or other countries is quality assurance.
When manufacturing locally, you have great control over the quality of your manufacturing process. When someone else is doing the manufacturing for you, you can’t tell what they do over at their facility.
The good news?
Most reputable outsourcing production companies offer unmatched quality assurance. As long as you’re diligent about your choice of outsourcing partner, you’ve got nothing to worry about as far as product quality is concerned.
Outsourcing Production Is a Smart Decision
If you were on the fence about outsourcing production, you now have enough information to make a decision. Generally, outsourcing is a sound practice that will save you money and time while adding to your bottom line.
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