Lowering Production Costs Through Specialized Contract Manufacturing Services

Posted by Timothy Harvard on October, 2018

The traditional model of an American Original Equipment Manufacturer where everything is produced in-house is largely obsolete in today’s economy. While there are still some companies that manufacture and fabricate all parts and components of their products in-house, this is a rarity as the costs of equipment, experienced operators and simply staying abreast of current technology make this a costly option.

Instead, OEMs today turn to contract manufacturing services to complete specialized aspects of production and assembly. Depending on the contract manufacturer this may be a single part or component, or it may be a complete system, such as the electronic components and the wiring assembly.

Specialized Knowledge and Expertise

By using a specialized contract manufacturing services, the OEM can turn to experienced experts in the specific field. These companies are often able to move the production from concept through to manufacturing, offering engineering and design solutions faster and more effectively than an in-house team can provide.

This means a shorter time from concept to market with new products, as well as the development of the lowest cost and most efficient production methods.

State-of-the-art Equipment for Faster Production

Working with contract manufacturing services means using companies that are highly developed within their production areas. They have the latest in equipment and the most experienced staff, resulting in lower order turnaround times, higher quality control and increased precision with the production of all orders.

They are also able to scale up production a needed without taking an extended time to ramp up production. For OEMs in most markets, this is a critical consideration over doing work in-house.

Full Integration into Supply Chains

With the advanced use of contract manufacturers, it is essential these companies are able to fully integrate into the supply chain of the OEM. This is an area where expertise, experience, and reputation are important to consider when choosing the right contract manufacturer.