Outsource Manufacturing: A Guide For Beginners

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Outsource Manufacturing: A Guide For Beginners

Whether you’ve come up with the latest and greatest invention or you’ve been manufacturing your parts and products in the United States for years, there are many benefits to outsourcing your manufacturing needs. If you’re brand new to outsource manufacturing, the professionals at United Global Sourcing are here to clear things up.

Outsource manufacturing is when a business hires people outside of their company to help assemble parts or to build an entire product. Many business owners choose to go this route because it can significantly cut their labor costs. For most new business owners, overhead labor will be among your company’s largest costs, so you can see why outsource manufacturing is very appealing. When you outsource a percentage or all of your production line to a third party manufacturer in a lower cost location, you can save hundreds of thousands of dollars. One of the biggest perks of outsourcing is that you get to utilize assets such as equipment and plants, without having to make an investment in fixed costs.

If you’ve come up with a creative sporting goods product or a useful automotive accessory, finding an existing supplier that is qualified to manufacture the items to your specifications isn’t as difficult as it may seem. At United Global Sourcing, we’re passionate about offering turn key solutions for all of your manufacturing and fabrication needs. If you’re ready to get started on finding the best overseas manufacturer for your product, contact our friendly staff today.

How Do I Know If I Should Outsource My Manufacturing?

How Do I Know If I Should Outsource My Manufacturing?
If you own a small start-up or a medium-sized business, you may be wondering if it would behoove you to outsource your manufacturing needs. There are many reasons why business owners choose to outsource their production needs, and the main reason most do is because of the incredible savings it provides.
If a supplier already has competitive advantages in place or they are already performing at a high-quality pace, it makes total sense for business owners to outsource certain processes. From product concept to prototyping and production to packaging, there are many parts of the production process that can be outsourced to a specialized manufacturing company. If these jobs can be completed in a faster amount of time or with lower production costs, why not save yourself the time, stress, and money, and have these projects outsourced?
As we mentioned above, there are a myriad of reasons to have your production needs outsourced. Let’s take a look at some of the common advantages of outsourcing below.
- Outsourcing your manufacturing can offer you flexibility when it comes time to prioritize your business’ needs. This allows you to focus on the company’s core operations and will even let you focus on new product development.
- There are serious financial benefits that come with outsourcing. This will help you to reduce or eliminate assets and increase cash flow to help your bottom line.
- Supply chain management assistance is another major benefit of outsourcing. When you work with a specialized manufacturer or fabricator, you can rest assured that your products will be completed on time.
- Gain access to state-of-the-art technologies without having to spend a ton of money on overhead and fixed costs such as building your own factory.
It’s important to note that outsourcing your manufacturing will not fix everything. As a business owner, you should constantly be evaluating your business processes and strategies. If you find that some activities are redundant or they don’t contribute to the profitable growth of your business, these are areas that may be worth outsourcing.

What Are The Cost Advantages of Outsourcing?

At United Global Sourcing, we don’t simply just connect you with a manufacturer, and then disappear. We put communication and quality first, and we maintain a 24-hour communication cycle with each and every one of our clients. This allows us to quickly identify and remedy any issues early on, to ensure your parts or components are assembled properly and delivered on time.

As we mentioned above, there are a variety of cost advantages should you choose to outsource your manufacturing and fabrication needs, including:

Lower Fixed Cost – when you have a stellar invention or product that you’d like to bring to life, it’s up to you to pay for the variable cost of production and the upfront fixed costs for setting up a factory. When you outsource your manufacturing needs to a third party, you don’t have to worry about these costs bringing down your bottom line, since you’ll be working with companies that already have the machinery and technology in place.
Cheap Labor Costs – The cost to set up a manufacturing business abroad are significantly lower than in the United States. The most common regions for outsourcing include Asia, Latin America, and Eastern Europe.
Work With A Pro – When you work with an established manufacturing company, you can rest assured that you’re working with professionals who have years of experience in the product development world.

If your company produces a product, it’s up to you to find the best manufacturing operation for your production and prototyping needs. While some businesses may be able to find an affordable manufacturer domestically, it’s always wise to look at your outsourcing options first.

What To Look For In A Manufacturer

Choosing the best contract manufacturing organization, or CMO, is absolutely critical to the success of your business. If you choose the wrong company to work with, you could be faced with lengthy production delays and even cost overruns. Back in the day, choosing a manufacturer often meant choosing the company who offered the lowest cost. While cost continues to be the first thing business owners look at for their outsourcing needs, it is no longer the sole factor. In addition to stricter government regulations and foreign policy changes, there are many things that should be considered before you sign on with an outsourced manufacturer, including quality and safety.

Another big perk of outsourcing is having assistance with managing your supply chain. The manufacturer you choose to work with will likely assume the responsibility of finding all of the necessary suppliers or subcontractors. They are also usually the first point of contact as you collaborate on projects or perform other joint tasks. To help you choose the right manufacturer for your mass production needs, we’ve compiled a list of things to consider.

Company Reputation

As you start shopping around for manufacturing companies, look for businesses that have a solid and satisfactory reputation. Try to find a company that takes pride in their products and their online appearance. A modern and engaging website can be a clear indicator of professionalism in this industry, so don’t take those things lightly. If the face of the manufacturing company does not make you feel confident about their abilities, keep looking at other options.

Communication with Clients

While this one may seem like a no-brainer, you’d be surprised how many overseas manufacturers fail to communicate effectively with their clients. When you outsource your project to a manufacturer in Asia or Eastern Europe, you’ll want to be updated on every step of the process. If the communication with your manufacturing partner starts off slow or confusing in any way, it may be a clear indication that you should keep looking around. A professional and trustworthy manufacturer will take the time to provide you with the all of the necessary information, and they will respond to your inquiries in a quick and timely matter.

At United Global Sourcing, we know how frustrating it can be trying to communicate with a manufacturer when they don’t have your best interest in mind. That’s why we’ve committed ourselves to a maintaining a 24-hour communication cycle with our clients. This helps us to identify any issues early in the manufacturing process, so we can deliver high-quality products to you in a timely matter. We specialize in industrial manufacturing, precision castings and machining, plastic and molded natural rubber, and elastomer assemblies. If you’re interested in learning more about our outsource manufacturing services, contact our friendly team today.

Quality Products

No matter what manufacturing company you choose to work with, if they refuse to show you pictures of their factory and some of their past products, you may want to keep your options open. Ask each manufacturer where they source their materials, and make sure they have a clear understanding of your production needs and timeline.

How To Create A Request For Proposal

When shopping around for the best outsource manufacturer, you’ll want to create a request for proposal, also known as an RFP. A request for proposal can be defined as a type of bidding solicitation in which a company or business announces that funding is available for a particular project. As a result, manufacturing companies can place bids for the project’s completion. More often than not, the RFP outlines the bidding process and contract terms, as well as provides guidance as to how the bid should be formatted and presented.

When it comes to finding the best outsource manufacturer for your product or parts, creating a quality RFP is crucial to your success. One thing to think about are your objectives and the specific requirements you are looking for in a manufacturer. If you don’t provide adequate information about your production goals and ask the right questions, it may be difficult for your manufacturer to truly understand your product, timeline, and needs. A well written and thought out RFP can help to clarify your business objectives and the scope of services you seek. The RFP will also provide a structured format that will describe the manufacturer’s capabilities, costs, and expectations. There are three main requests to keep in mind, which are considered to be the most important requirements of an RFP. These requests include

References. The manufacturer you choose should have ample experience creating parts and products similar to yours.
The history of the manufacturing company. Make sure to do some research on how long the manufacturer has been in business, the number of customers they have serviced, their customer retention rate, etc. Finding a manufacturer to work with longterm can be challenging, but having a clear understanding of their history and capabilities will help you to determine the best option for your business.
Resource and development. This refers to the investigative activities a manufacturer makes to improve their existing products and procedures. The last thing you want is to sign a contract with a manufacturer, only to learn that their processes are old and much less efficient than new ones.

Some other main components of an RFP include:

An organizational overview. This is normally a brief description of your company’s mission, as well as the desired product you’d like to have manufactured. This will give each outsourcing company some background on your company and a scope of your manufacturing and fabrication needs.
Your project goals and target audience. What are your manufacturing goals? Who is your target audience? Answering these questions will help each manufacturer to understand your needs.
Project deliverables. Are there major components of your project that your manufacturer should be aware of? Describe the required features and design of your product, along with your long-term goals for manufacturing.
Your timeline. What is the manufacturing timeline for your project? If you hope to receive a response in a timely matter, be sure to include the date you plan to announce the winning bidder. It’s important to note that the longer your RFP is, the more detailed a response it will require from your bidders.

At United Global Sourcing, we understand how time consuming and challenging it can be to create a thorough RFP. If you need assistance finding the best outsource manufacturer for your product or parts, get a free quote from our team today. We can help you find the best industrial manufacturing company or factory that suits your needs, budget, and timeline. If you have any questions about our services, reach out to us today!

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