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There are numerous benefits to outsourcing your custom cable assemblies, rather than attempting to manufacture them in-house. Whether you choose to offshore or reshore, there are still benefits to not producing those products at your own company. Although you might predict some cost savings by producing assemblies with your own staff and resources, keep in mind that along with adding a product line comes additional stress, costs, and time. By outsourcing, the negative aspects of the task are the responsibility of the other company. After vetting the manufacturer you choose for consistent and reliable quality, outsourcing can become a better business decision.
The focus of any manufacturer is to create quality goods for their clients and provide them at a reasonable cost that also makes a profit. It may seem logical that with more parts of your process done within your company, the quality control can be maintained and internal costs could be lowered. However, that way of thinking does not take into account the additional costs associated with a new product line, such as custom cable assemblies, to the business. The difference can be significant. It is worth a thorough evaluation of all aspects before making a decision as to which would have a more positive effect on your bottom line.
One negative result of adding to your company is that your staff will likely be stretched thin as you now have an additional consideration for not only production, but also research, development, engineering, and design. It takes time for new processes to be perfected to the same quality that an existing vendor could create. In the meantime, you still have demands to meet for your original products. A successful company may produce a good item, but they should put effort into improving it, to stay ahead of the competition. That takes time and manpower that might not be available if staff are simply trying to keep up with output demand for both the custom cable assemblies and the original products.
If you plan to hire new, technically qualified staff to handle the assemblies, then the staff maintenance duties will also increase. That equates to more time spent reviewing resumes for skilled candidates, interviewing, and training. There will likely be less time to review business numbers and create new ways to improve business. Not to mention, if your needs drop or don’t remain consistent, then you either have to find additional work that those technically skilled staff members can do internally, or fire them for a period of time. Neither option is efficient.
By adding a department to handle manufacturing of custom cable assemblies, you also increase your building needs. You will need to research how to set up a proper place for assembly. There will also need to be increased storage options. The finished products will need to be safely stored for future use. In addition, space for storing the raw materials will need to be laid out for the area. In the end, your current building layout will need to be rearranged or new space will need to be built, purchased, or rented, which means more to insure and maintain.
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