Stay Lean – Outsource to Contract Manufacturer
In today’s contact, advantages of outsourcing manufacturing activities to a contract manufacturer is easily recognized by most business sector as a mean to stay lean. Industries such as electronics, semiconductor, marine, consumer products, pharmaceuticals, biotech, automotive and etc are highly dependent on the services of contract manufacturing firm. Yet what can a hiring company expect from a contract manufacturer?
Contract Manufacturing Process
Let’s take a look at the process in the form of a simple example. Suppose Company A , the original equipment manufacturer (OEM) is a High End Vision Inspection machine manufacturing company. Obviously, Company A would have a long list of Bill of Material (BOM) and a huge stack of drawing which detail the specification, brand, part number, quantity, supplier information and other technical information of each parts and components that would need to be assembled to create the end product, a high end complex vision inspection machine. So, instead of sourcing , stocking, manufacturing, assembly, testing and packing by in-house employees. Company A would hire the services of Company B to perform certain functional activities.
Company B, being a a contract manufacturer, would be asked to supply, manufacture and assembly a specific type of sub-assembly units, such as panel wiring, junction box, wire harness and etc. Since Company B has all the necessary resources and know-how to provide such services, it is able to build upon this expertise to deliver the order. Essentially, by outsourcing these activities Company A can focus on its key competence in the area of product research and development (R&D) , software development, marketing, distributions and etc rather than spreading its resources in additional manufacturing infrastructure.
Contract manufacturing concept has gained increasing popularity all across the world. With the increase in market competition, it has become absolutely necessary for the hiring firm to focus on their core competencies rather than trying to do everything by themselves This provide a space whereby the contract manufacturing service provider comes in to fulfil that need. The contract manufacturer sign a legal manufacturing contract with the hiring firm. It commit to ensures that the required production parameters and deadlines are all followed and the end product will deliver the same quality as those manufactured by the hiring firm. Most often then not, the contract manufacturer detail will not be make known to the end user.
Taking Automation Industrial as an example, , there are several different services that can be outsource to a contract manufacturing service provider. For example, they may provide services such as global sourcing and purchasing, sub-assembly work, wire harness, box build, panel wiring, material localisation, integration, final assembly, programming, testing and configuration and many more.
Contract Manufacturing Firm Selection
While outsourcing your manufacturing activities to a contract manufacturing company, it is very important to check if your chosen contract manufacturing partner follow ISO 9001 standards to ensure quality control and is BizSafe certified to conform to the safety of the workplace and personal health of every personnel working under them. With the increase in OEM company wanted to operate leaner, it has opened up numerous new opportunities for contract manufacturers and there are many such players in the market today. However, only a few are professional, hence it is a necessity to know what to expect from the contract manufacturer and to select wisely. Not all contract manufacturers are the same.
Contact us at sales@exxeltech.com for a non-obligated discussion of your specific need to fulfil your manufacturing needs.
