Benefits of Contract Manufacturing for Printed Components and Finished Goods
Recent global events have put countless manufacturers in the difficult position of being unable to supply product, mostly due to circumstances beyond their control. Material scarcities, labor shortages, inability to get materials shipped in and goods shipped out, the list goes on. As a result, manufacturers have since been forced to reconsider their entire supply chain and overall manufacturing processes. Many have come to the same conclusion: to increase efficiency and reliability, they must simplify their processes and reduce the amount of suppliers involved. Or, as we like to say, less cooks in the kitchen.
Let’s take a look at how a brand can achieve this, and other benefits, by working with a contract manufacturer, particularly when the assembly or finished goods require some sort of specialty printing.
Cost Savings
By working with a single source supplier, money is saved in many ways. First, purchasing costs are reduced. Everything goes on one purchase order. This generally means one invoice, and only one processing cycle. Done. So much less involved than dealing directly with a handful or more suppliers. In addition, the manufacturer does not need stock raw materials or parts, some of which will sadly never leave the warehouse. As another major benefit, the supplier is responsible for providing the assembly or finished product to the agreed specifications. If the supplier makes a mistake, the burden is on them to resolve it, not the manufacturer. In certain situations, this could lead to huge savings.
Improved Turnaround Times
Most products or sub-assemblies require multiple manufacturing processes. For instance, the ones that we typically handle may require machining, fabricating, laser work, powder coating in addition to a long list of secondary and finishing operations. That’s a lot to coordinate! A contract manufacturer relieves this burden. Often, they are working with trusted suppliers with proven track records. And, truth be told, these suppliers are often likely to give priority to long standing customers.
For example, let’s review a subassembly that we produce for a major manufacturer. We coordinate multiple process that starts with procuring powder coated metal backing plates. These may have mounting PEMs® for switches or circuit boards, which we take care of as well. Typically, we will also manufacture the overlay including adhesive work and die cutting, then apply the overlay to the plate assembly and deliver the completed subassembly to our end customer. This greatly simplifies their sourcing process, while saving them a good amount of money (and grief) as well.
Reduced Need for Skilled Labor and Capital Equipment
We all know the old saying, “You can’t find good help these days.” This one has surely stood the test of time! In fact, it’s now more relevant than ever. Complex manufactured/printed products require employees with a wide range of varying skillsets. Whether it’s a rather simple assembly job, or a more complex arrangement, why deal with the burden of finding and keeping skilled labor when the contact manufacturer has them in house or a phone call/email away?
The same rings true for capital equipment. Machinery typically carries six or seven figure price tags, in addition to the skilled labor required to operate it. And let’s not forget the recurring training and maintenance costs!
These are just a few of the benefits that manufacturers can receive when working with a single source supplier for assemblies and finished/packaged goods. It’s important though to make sure you partner with the right one. While we could probably write a whole blog on that topic alone, here are a few pointers: Look at their portfolio, see what brands they’ve worked with and what they’ve done for them. Make sure they are confident that they can take on your work based on its complexity, volume and target delivery dates. Established contract manufacturers will typically take what they know they can handle. Some of us like to get creative and take on bigger challenges. But at the end of the day, the contract manufacturer wants to be the hero of the story, not yet another source or sourcing aggravation!
