As we saw in our last post, there are many benefits to forming a local supplier-consumer partnership. The advantages include ease of communication, consistent high quality product and service, and cost savings, providing both partners with a shared responsibility in the resources, risks, and rewards.
For contract manufacturing, the advantages to forming local partnerships actually reverse the disadvantages to contract manufacturing. What was considered a negative to contract manufacturing is turned into a positive with a local supplier-customer partnership by forging connections within the U.S., or as close to home as the same state or region of the country.
When entering into a contract with a local firm to produce and assemble components, you gain even more benefits. Let’s take a look at some of the negatives to contract manufacturing to see how local partnerships change the cons into pros.
Lack of Control
Signing a contract that enables another company to produce your product gives them control over your product. The contract manufacturer isn’t required to implement any strategies you might suggest.
In a local partnership, mutual satisfaction is integral to the relationship. Both parties work closely together to establish expectations and consistent quality. Your level of control increases with a relationship that offers greater accessibility and stateside contact.
Capacity Constraints
If your order doesn’t comprise the majority of a contract manufacturer’s business, you can never be certain when your job will get done, or if your product will get on the production line before a competitor’s. You have no authority in the scheme of things involving the timing of your purchase order, resulting in receiving product later than you need it.
Forging a local partnership gives your product priority over other business coming in because your business is considered a viable extension to the contract manufacturer’s business. During high production periods, you don’t have to worry that your job is going to take the back seat.
Questionable Quality
Every time a contract manufacturer produces and assembles your product, it’s your firm’s reputation on the line if quality should fail. You have to continually evaluate the quality control methods of both the contract manufacturer and their suppliers to ensure they’re up to your standards.
A local partnership with a contract manufacturer gives you up front and personal quality control through continuous contact in your country’s time zone. You not only know your manufacturer, you know and approve of every supplier, because you’re working together on a regular basis to meet the levels of standards that benefit all parties.
Outsourcing Risks
The popular trend in outsourcing involves the high risk of working with low-cost countries, including language barriers, cultural differences, and longer lead times. Managing the challenges intrinsic to outsourcing overseas involves many late-night hours, difficult conversations, and an overall expensive risk-reduction effort.
Instead, go local with your outsourcing and find a contract manufacturer who is on the same page with their business ethics. When you’ve aligned your business with a like-minded manufacturer who holds the same commitment to continuous improvement and shares the same standards of excellence, your outsourcing risks are essentially eliminated.
Changing the cons of contract manufacturing and assembly into pros is easily accomplished through finding the right local partnership. Sirois Tool manufactures machined parts and assemblies for manufacturers of several types of precision machines. As your local supplier partner, we offer a complete supply program and can ship your parts on the same day as ordered when needed, or drop ship parts directly to your customer, repair center, or distributor.