Outsourcing Manufacturing Pros and Cons
Once, it was usual for companies selling a product to also design and manufacture that product. However, with the rise of outsourcing manufacturing, that’s becoming less and less common as more companies take advantage of mechanical design outsourcing and mechanical engineering solutions available from specialized firms. Is outsourcing your manufacturing needs, the right path for your company?
What Is This Type of Outsourcing?
Before we dig into the pros and cons offered by this type of outsourcing, let’s look at what it actually is. When you outsource your product manufacturing, you’re able to take advantage of a number of different options. Some companies offer only the manufacturing aspect, leaving you to come up with the engineering documents and designs, prototypes and other necessary elements required for a quality finished product. Yet other outsourcing manufacturing companies offer an end-to-end solution, allowing you to provide rough inputs, and then be part of the process every step of the way. Either way, outsourcing your manufacturing needs allows you to produce and sell a product without having to invest in equipment, workers, machinery, and production facilities.
Manufacturing Outsourcing Pros
There are numerous pros to outsourcing manufacturing. One of the most obvious is the ability to save a tremendous amount of money. The sheer cost of investing in manufacturing facilities, machinery, equipment, staff, engineers and other necessary elements can be prohibitive. By outsourcing your manufacturing, you cut out most or even all of those costs.
Another pro to outsourcing your needs is that you’re able to take advantage of real experts in engineering and design, as well as the latest in manufacturing machinery and equipment technology. If you were going it alone, you might not be able to afford quality machinery and equipment, and you might not be able to hire a skilled workforce to produce your product.
Manufacturing Outsourcing Cons
While there are numerous benefits to outsourcing your manufacturing, there are also a few drawbacks. One of the most important is loss of control. By definition, outsourcing manufacturing means that you are no longer in control of the process. Instead, your outsourcing partner controls production. You might also find that you become dependent on your outsourcing partner, and that brings a whole host of other considerations to the table.
Manufacturing Industry in the USA
The US manufacturing industry has downsized considerably as globalization has become the norm. The US is still shifting toward a service-based economy, while the manufacturing aspect is sent overseas where costs are lower. You can expect this trend to continue over the long term. Globalization is here to stay.
The Current Manufacturing Industry across the Globe
Globally, the manufacturing industry is up, particularly in countries like India, Indonesia, Brazil, the Philippines, China and other nations where labor costs are low and companies in the US can outsource manufacturing to save money and then pass those savings on to their customers.
In the end, outsourcing manufacturing offers more pros than cons, and is more than just a passing fad. It’s a deep, deep trend that will eventually change the world.
– Back Office Pro