Outsource manufacturing is the process of hiring people outside of your company to assemble parts of, or to build an entire product. The main reason why companies across the globe choose to outsource their manufacturing needs is due to the cut in labor costs. When a business outsources a part of their production line to a third-party manufacturing company in a different location, they often see a significant decrease in production costs. At the end of the day, it tends to be more affordable to outsource production processes to companies that have a comparative advantage to produce them internally. More often than not, one of the best advantages of outsourcing is to utilize assets that are already in place without having to make an investment in fixed costs.
If you’ve invented a new product, outsourcing the production may be the best use of your time and money. Since you will not have to invest heavily in developing your own internal infrastructure, your market research and business plan should give you an idea of your potential sales volume and selling price.
When To Outsource Your Manufacturing
Manufacturing companies can benefit from outsourcing their production in a variety of ways. The main reason, as we mentioned above, boils down to one thing: cost reduction. Most businesses will choose to outsource manufacturing processes with the hope of making fixed cost fully variable. If any part of your production line, from the conceptual design to the finished product, can be completed faster or at a lower cost somewhere else, it is always best to outsource.
Some main benefits of outsourcing
• A myriad of financial benefits. This can help to reduce or eliminate assets and increase cash flow for your business.
• Strategic optimization. This allows business owners to focus on their core mission and the allocation of their operations in a more profitable manner.
• Supply chain management benefits. Your company will have the ability to select suppliers who are leaders in their specific industries.
• Flexibility. When you outsource your manufacturing needs, your company’s resources can be redirected to your core operations.
Finding the right manufacturer
If you want the best quality product at an affordable price, it’s important to find the best contract manufacturing organization (CMO) you can. If you choose the wrong contractor to work with, you may be faced with cost overruns and delays in production. While cost should be a driving factor, it should not be the sole determinant for choosing a manufacturer. Quality and safety are also very important aspects to consider when your brand or business is on the line.
Since there are literally thousands of contract manufacturing companies (CMOs) across the globe, it can certainly be difficult trying to choose the right one for your business. It’s important to do your research on the various companies available, and to look for the one that you feel will serve your best interests. The first things you’ll want to look for in a CMO are: their technical capabilities, the capacity of their facility, and the upkeep of their facility. From there, you’ll want to consider the CMO’s willingness and ability to modify their current systems, processes, and procedures to meet your product requirements.
Some questions to keep in mind when you start looking for a qualifying manufacturer are
Does the CMO hold the necessary manufacturing authorizations needed to conduct business?
Can the manufacturer also test and pack the products?
Does the CMO meet or exceed your quality and production standards?
Can the CMO supply the product cheaper than in-house production?
Does the CMO deliver orders on time and in full?
Does the CMO have an infrastructure that is capable of providing you with accurate, comprehensive, and timely information?
Hexiqon Solutions as an outsourcing partner
In the field of outsourcing manufacturing, Hexiqon solution is a leading company in which we took one step ahead and started providing our services. We have tie-ups with at least 300 vendors in Mumbai, Thane, and the Navi Mumbai area. We have divided them into different categories like machining work, sheet metal work, surface coating, etc.
What we do is when clients send us a requirement, we send them the top 3 quotations from our list of certified vendors as per their skills, machines, labor availability, and lead time. Then the client selects one vendor according to their suitability. After that, the purchase order is placed to us, then the actual manufacturing is started. From start to delivery all the manufacturing processes will be under our control, we will assign a dedicated project manager to your project and daily production update will be given on a daily basis. When productions are completed, we will arrange a quality check. After that, the product will be delivered to your company.
Why Hexiqon Solutions
• We have a 300-plus vendor base.
• You have to choose one quotation from three.
• Easy work process.
• Dedicated Project manager.
• Daily production updates.