It is imperative that OEMs reduce costs and increase operations efficiency to remain competitive. To achieve these objectives, many companies utilize sub-assemblies as part of the assembly process. Manufacturing projects often have numerous individual parts – sometimes on the order of hundreds or thousands – that are needed to assemble a final product. Sub-assembly is the process by which related components are assembled into a part for future use in the assembly of the final product. Preparing sub-assemblies before they are needed for final product assembly increases productivity and increases speed to market, saving OEMs significant time and money.

Sub-assemblies continue to increase in complexity over time. In many cases, they require intricate builds with specialized equipment that demand skilled technicians. Many OEMs simply do not have the in-house equipment and skill sets required to complete intricate, high-quality assemblies. For this reason, outsourcing sub-assembly and final assembly to a contract manufacturer often makes good business sense. Contract manufacturers, like Riverside Integrated Solutions (RIS), have the necessary tools and skilled workforce to complete complex assemblies, often times at a higher level of quality than the OEM. Additionally, contract manufacturers are experienced in a broad range of product inspection and testing duties and can often assume these responsibilities as well.  OEMs can rest assured the sub-assembly and final assembly will arrive on-time and be fully functional.

Benefits of Outsourcing Sub-Assembly

Many companies heavily rely on outsourcing to remain competitive and keep costs low. While all supply chain processes can be outsourced, many OEMs are looking at sub-assembly and product assembly as an area of opportunity. Outsourcing assemblies to a contract manufacturer save OEMs time, money, and resources – giving an invaluable competitive edge.

·Lower Cost: one key driver for outsourcing is the expected cost savings. The cost benefits are typically from lower labor, operating, inventory, and overhead expenses. In addition, OEMs that outsource services do not invest significant capital in equipment and physical assets, and can utilize capital resources more strategically.
·Increased Efficiency: selecting a contract manufacturer with experience and expertise in sub-assembly typically results in higher productivity and efficiency than performing the service in-house. Additionally, in-house personnel are no longer needed to perform sub-assembly services and can focus their efforts on more value-added jobs that deliver a competitive edge.
·Decrease Time to Market: when services such as sub-assembly are sourced to a contract manufacturer, OEMs often realize a reduction in the time required to complete the final product, improving the overall speed to market.
·Improve Quality: product quality often improves due to leveraging the contract manufacturer’s established and vetted best practices, processes, and expertise in sub-assemblies and final product assembly.
·Greater Volume Flexibility: sourcing sub-assembly allows business flexibility and a nimbler response to market or demand fluctuations, whereas OEMs that solely perform the assembly work in-house may be unable to fill an unexpected increase in product demand due to manpower, inventory or other internal constraints. Outsourcing helps shield OEMs from the internal ramping up or down due to business cycles.

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Contact the team at RIS to learn more about the services we offer along the entire supply chain including sub-assembly.

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Cost Saving Strategies for Sub-Assembly

Many OEMs don’t need a partner to build their entire product, but want to streamline processes within their production facilities by having a contract manufacturer build sub-assemblies that are ready for installation. At RIS, we provide assembly solutions that include building time-consuming sub-assemblies that are ready for installation in your products as well as build complete products start-to-finish. We serve customers across multiple industries building sub-assemblies that range from mechanical monitor brackets to complex electrical control arms for large machinery.

Below are several cost-saving strategies for sub-assembly to help OEMs reduce costs and remain competitive. Some of the strategies occur during the design phase when OEMs and manufacturers have the most control over decisions that impact production and assembly processes. It should also be noted that many of these strategies are applicable to both sub-assembly and final product assembly steps.

·Design for Manufacturing (DFM): cost-saving strategies for sub-assemblies start well before the production and assembly phases are underway. The concept of DFM is that potential manufacturing issues are identified and resolved during the design phase, avoiding costly disruptions to the project budget and schedule. DFM is an element of lean manufacturing practices as it focuses on getting the design right in order to minimize rework and waste during the production and assembly steps. The DFM approach is an excellent cost-saving strategy for OEMs as it increases operations efficiency and reduces time to market.
·Simplify and Standardize: during the design phase, it is important to analyze the part design to identify opportunities to simplify or standardize. It is no surprise that complexity drives up the cost of manufacturing and sub-assembly. Part complexity takes many forms and includes geometry, special features, surface finishes, and part size along with other specifications. For example, when designing parts with holes or other features, opt for standard drill sizes for ease of manufacturing and assembly. It is important that OEMs ensure that every aspect of the design is truly necessary to achieve the requisite functionality – and when in doubt, simplify and standardize to save costs during production, sub-assembly, and final product assembly.
·Just-In-Time Sub-Assemblies: one area of waste often identified during manufacturing assessments is surplus inventory. To minimize this form of waste, it is key to have the right sub-assemblies and quantity where and when they are needed for final product assembly. This approach is called Just-In-Time (JIT) manufacturing and assembly and is applicable whether OEMs perform sub-assembly in-house or outsource this service to a contract manufacturer.  The JIT approach reduces the level of sub-assembly inventory required as well as the duration that sub-assemblies are stored before being incorporated into the final product assembly – leading  to lower OEM manufacturing costs.

·Consolidate Assembly Suppliers: over time, OEMs may find they have acquired a large supply chain that can be challenging and time-consuming to manage – including multiple sub-assembly and assembly suppliers. One cost-cutting measure is to consolidate the supply base into fewer partners. This approach reduces the opportunity for miscommunications or finger-pointing when it is time to take responsibility for an issue – resulting in increased productivity and lower production and assembly costs for OEMs.

About RIS

RIS is an advanced contract manufacturer providing robust solutions in circuit board assembly, product assembly, kitting, supply chain management, fulfillment, distribution, and reverse logistics. We employ more than 300 people and provide services to OEM’s across the world. We operate 3 state-of-the-art manufacturing facilities within the U.S, and as your one-stop-shop we have the capabilities, capacity, quality assurance standards, and resources to provide you with support for all of your manufacturing needs.

With all of the choices in contract manufacturers out there, we know it can be difficult to find someone that not only understands your business model but also has your best intentions in mind. RIS has proven to always be a win-win focused relationship. As your one-stop-shop, we have the capabilities, capacity, quality assurance standards, and resources to provide you with support for all of your manufacturing needs. We understand that supply chain management is difficult and very time consuming, so we urge our customers to utilize us in the fullest capacity. Our total-package solutions include:

· Extensive supply-chain network

· Purchasing and inventory management

· Dedicated Program Manager

· Warehousing and drop-shipping capabilities

· Flexible order fulfillment

· Product assembly: sub-assembly and full product

· Scalability to meet your needs

Contact us today at (507) 523-3220 to see how we can help with your manufacturing project, or click here for a quote.

Cost Saving Strategies for Sub-Assemblies
Article Name
Cost Saving Strategies for Sub-Assemblies
Cost Saving Strategies for Sub-Assemblies: a thorough DFM process, standardize and simplify where possible, JIT assemblies and minimize suppliers.
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RiverSide Integrated Solutions
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