The Benefits of Outsourcing

As manufacturing organizations grow and change, they need to be able to assess their operations’ efficiency continually. As a result, it’s not unusual that, at some point, companies of all sizes will need to decide whether they should invest in a new (or upgraded) operation on-site. Otherwise they will end up outsourcing that function.

Many different functions could be under consideration: mechanical assembly, machining and printed circuit board assembly (PCBA) are typical examples where the opportunity for outsourcing deserves careful consideration.

At some point, companies must decide whether manufacturing represents a core competency of the company or if it can be more economically outsourced.

One example may be that the company has a process of taking in cast aluminum parts and then performing a machining operation to “clean-up” the castings using a lathe. They also pre-drill some attachment points using a drill press. Given today’s modern CNC machining operations and multi-axis equipment with tool changers, it probably makes sense to have a contract manufacturer perform that task.

In addition, teaming up with a contract assembly partner enables original equipment manufacturers (OEMs) to tap into years of know-how and expertise. Contract manufacturers often have decades of experience with various products and industries.

At RiverSide Integrated Solutions (RIS), product assembly solutions can include building subassemblies ready for installation into higher-level assemblies. Other options include building complete products start-to-finish. In addition, our experience allows us to provide insights and recommendations that add value for our customers.

While considering the merits of outsourcing, it is vital to be clear about the expectations you have for a contract manufacturer to bring to your operation. Putting together a “Minimum Requirements” document is often the most helpful way of evaluating potential partners. This in-house assessment of expectations for the deliverables and capabilities of a contract manufacturer will help you make fair comparisons between candidates. This document should also allow for the flexibility to consider capabilities or techniques where your company may not have expertise.

Take, as an example PCBAs. A company like RIS, which specializes in PCBAs, might suggest an approach you had yet to consider. Flexibility would allow you to consider these alternative approaches between competing suppliers.

It is also helpful to know whether a contract manufacturer works in particular industries. Suppose they are already familiar with the baseline requirements of the industries you currently serve. In that case, they may be a better fit for your company. They may also have insight into adjacent industries that you could be considering for expansion.

RIS is an example of an integrated manufacturer. We execute multiple supply chain steps, including manufacturing assembly, kitting, distribution and fulfillment. Integrated manufacturers offer significant value for OEMs, such as streamlining production schedules, improving the consistency and reliability of the final product and minimizing the number of vendors.

Switching to contract manufacturing almost always results in cost savings, but not all paybacks are strictly monetary. In addition, gaining access to markets, improved technology or even a shorter lead time are desirable outcomes. Therefore, it’s important to consider everything that a contract manufacturer brings to the table that might benefit your business.

Outsourcing part of your business may seem risky at first, but understanding why you should do it and establishing your expectations for doing so will go a long way toward making the transition easy. Luckily, plenty of contract manufacturers, like RIS, have the experience and knowledge to help you make the right choice for your company.

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.

Our total-package solutions include:

• Extensive supply-chain network
• Full box-build assembly
• Dedicated Program Team
• Warehousing, kitting and drop-shipping capabilities
• Reverse logistics
• Flexible order fulfillment
• Scalability to meet your needs

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