Benefits of Contract Assembly

Original equipment manufacturers (OEMs) face constant pressure to reduce production costs and streamline operations. One of the solutions many companies turn to is outsourcing or contract manufacturing. Contract manufacturing is when an OEM outsources part or all of its manufacturing to a third party, like RiverSide Integrated Solutions (RIS).

This practice has existed for decades, and many industries rely heavily on outsourcing to remain competitive. Contract manufacturers exist for all supply chain processes. Still, many OEMs look at product assembly as an area of opportunity.

Complex assemblies can involve hundreds or thousands of parts and consume much of a company’s time. Outsourcing assembly saves OEMs time, money and resources – giving them an invaluable competitive advantage!

ADVANTAGES OF OUTSOURCING

There are many factors to consider when deciding if contract assembly is right for your business.

To help you decide, below are the key benefits of outsourcing product assembly to a trusted partner. The advantages below result in supply chain efficiencies and significant cost savings for OEMs.

INCREASE FLEXIBILITY

Outsourcing yields a level of flexibility for OEMs that is not possible in-house. OEM’s production schedules are tight. They do not leave much room for shifting runs to accommodate new or changed orders.

Contract manufacturers are much more nimble and able to readily slot in additional orders. This flexibility is crucial for OEMs wishing to capitalize on market conditions. It will help them grow their business and improve customer satisfaction.

LEVERAGE EXPERTISE

Many OEMs overlook the benefit of leveraging the expertise of a contract manufacturer for assembly. Partnering with a third party will provide your team with invaluable insights that could extend beyond product assembly processes.

Contract manufacturers work with various industries and products – accruing years of beneficial knowledge and expertise! Leveraging a contract manufacturer’s experience often results in product design improvements and creative solutions. These are benefits that can only be realized through such a partnership.

IMPROVE QUALITY

Over time, assemblies have continued to increase in complexity. Subassemblies often require intricate builds with specialized equipment that demand skilled technicians.

Many OEMs simply do not have the in-house equipment and skill sets necessary to complete complex, high-quality assemblies. For this reason, outsourcing assemblies to a third party makes good business sense. Contract manufacturers have the necessary tools and skilled workforce to complete complex assemblies. Plus, they can often complete it at a higher level of quality than the OEM!

Additionally, contract manufacturers have experience in a broad range of product inspection and testing duties. They can often assume these responsibilities as well.

When outsourcing assembly, you can rest assured that the assembly will arrive on time and be fully functional. If this is not happening, you have not found the right contract manufacturer!

SAVE TIME

Contract manufacturers are typically able to complete assemblies faster than the OEM. They provide OEMs with more rapid deliveries and increased speed to market. When outsourcing, OEMs are no longer limited by in-house equipment or the number of personnel. They can operate in parallel with their contract manufacturer.

For example, when outsourcing a subassembly, the OEM can work on other aspects of the final build. At the same time, the contract manufacturer completes the subassembly. This reduces the overall time required for the final production build.

SIMPLIFY PURCHASING AND INVENTORY MANAGEMENT

When dealing with thousands of individual parts, purchasing and inventory management can be a nightmare! Your purchasing resources must place and track orders, confirm proper parts storage and ensure component availability on production. Suppose all of these steps do not occur seamlessly. In that case, production inefficiencies result in higher costs and longer time to market.

The good news is that contract manufacturers handle all of these tasks for you. Outsourcing product assembly reduces the time your team spends on purchasing and inventory oversight. It frees these resources for more value-added work that will give you a competitive edge.

Additionally, outsourcing assembly reduces the overall labor and overhead personnel required. It also reduces the inventory storage and warehousing space. This provides substantial cost savings for OEMs.

About RiverSide Integrated Solutions

RIS is an advanced contract manufacturer providing robust solutions in circuit board assembly and product assembly. We employ more than 350 people and provide services to OEMs worldwide. We operate two state-of-the-art manufacturing facilities within the US.

With all of the choices in contract manufacturers out there, we know it can be challenging to find someone who understands your business model and has your best intentions in mind. RIS has always proven to be a win-win-focused relationship.

As your one-stop shop, we have the capabilities, capacity, quality assurance standards and resources to support all of your manufacturing needs. We understand that supply chain management is complex and very time-consuming, so we urge our customers to utilize us in the fullest capacity.