Outsourcing of Production: Why is this Interesting?
As a high-tech producer of mechatronic machines and systems, it may be highly beneficial to (partly) outsource production. In this blog post, we would like to answer the question: When do you choose for this option?
Being an OEM, There are several reasons why you should consider outsourcing production based on modules:
- Desire to Expand the Company
Because of increasing demand from the market, you would like to expand the organization. Yet, this asks for additional production capacity and (specialized) workforces that may be unavailable at times. By outsourcing the production, you quickly realize the desired growth goals without having to invest in additional workspace or employees.
- More Flexibility
It is highly probable that demand for the applicable product is far from constant. Outsourcing production enables the organization to manage the demand’s volatility. The utilization of external capacity results in a company that is much more flexible. Moreover, it is able to take on more business. Lastly, you improve the cash flow, since you can do without an investment in the production process. Your investment starts when the system supplier’s end-result is delivered at your door.
- Cost Reduction
The outsourcing of production leads to a reduction in procurement- and inventory costs. Furthermore, investments in production space, machinery and workforces is unnecessary.
- Shorter lead times
By choosing to collaborate with a production partner early on in the development process of the product, one can significantly decrease the ‘time to market’. A specialized partner is able to ensure the product development process runs parallel to the industrialization process. In other words, this is the all-encompassing process, leading to a machine that is suited for serial production, including optimal manufacturability. This is crucial in the realm of market share acquisition. The sooner you bring your machine to the market, the more your market share is capable of growing. You are one step ahead of the competition after all.
- Quality improvement
By collaborating with a system supplier, you not only invest in production capacity; you invest in knowledge and experience as well. You team up with specialists in the field of mechatronics who are 100% confident within their area of expertise. This know-how and experience brings novel insights and in turn an improvement of results, lower cost prices and shorter lead times during the production process.
Global supply chain management
MTA employs a vast network of international suppliers, each and every one of them being the specialists within their discipline. Through a careful and well-grounded selection procedure we exclusively choose the ‘best fit’ between your machine and the supplier. Thanks to MTA’s carefully crafted Global Sourcing System we are able to select the most appropriate collaboration partners that produce the various parts of your machine or module.
The best partners
You might be asking yourself: How do you select your partners? In this modern era, the ‘entire world’ is within reach. Therefore, we can use up unlimited and independent capacity. As a system supplier, we desire nothing less than the perfect end-result. To achieve this, an international, well-balanced supply chain is a necessity.
In order to create the optimal supply chain, we measure the capacity of our preferred suppliers against a great number of parameters in each project. Examples of parameters are quality, flexibility, costs and delivery times.
We carefully assess the complexity of the part that has yet to be produced. What materials and machining technologies are required? And how can the project dynamics be described? For example, how long are the delivery times? And does the part come with high transportation costs due to its dimensions and/or weight? Based on answers to previously mentioned questions and value for money considerations we determine which supplier will deliver the best result. In addition to this, MTA regards open and transparent communication and excellent service as highly important. We seek this quality in our suppliers as well; this ensures a fruitful cooperation in which optimal delivery reliability can be guaranteed.
This blog post explained the rationale behind outsourcing of high-tech production. We hope this information helped in forming your opinion about this topic. Please feel free to contact us in case you have any questions.