US-Based Contract Manufacturing Can Gain Marketshare from Overseas Manufacturers
Domestic Contract Manufacturers Have a Distinct Advantage
When it comes to sustainable growth and long-term profit, US-based contract manufacturing enterprises are facing unprecedented pressure.
These brands are accustomed to dealing with the challenges of narrow margins and long, complex supply chains. Now, however, the situation is growing more precarious. Traditional barriers to entry are falling and competition is increasing – particularly from overseas.
No matter your size or strategic goals, the key to success is to move beyond old-fashioned competition; that is, adjusting your prices against the other guy. Companies need to unlock a new level of efficiency to create an advantageous market position.
One that protects you from being undercut on price by unscrupulous overseas manufacturers.
Contract manufacturing outsourcing is the way to do it.
Contract Manufacturing Outsourcing: An Advantage Overseas Rivals Can’t Beat
Contract manufacturing outsourcing – from a trusted domestic supplier – is one way to win when your company focuses on adding value. Many advanced manufacturing processes can’t be sent overseas; a contract manufacturing partner will help you do them faster, better, and cheaper.
Let’s look at some situations where contract manufacturing outsourcing breaks bottlenecks and accelerates projects:
Short Runs
Overseas competitors traditionally gain advantages at scale; they use cheap labor and materials to deliver massive quantities of sub-standard products. For businesses that recently launched or are just ramping up, however, how can you improve the economics of short runs?
Contract manufacturing outsourcing makes short runs more cost-effective by ensuring a compact supply chain that will allow you to fulfill your needs “on demand,” whether testing the market or testing the product itself – all without getting entangled in long-term service agreements.
Prototyping
Done right, prototyping can yield amazing benefits in quality and cost. Engineers who integrate customer feedback and their own creativity can unlock unexpected potential in a product. That said, obsolescent designs often persist because prototyping is seen as time- and resource-intensive.
Contract manufacturing outsourcing makes thorough prototyping more appealing from both the engineering and business perspective. It cuts down on onerous Non-Recurring Engineering (NRE) costs, such as CNC programming and hardware setup.
Quality Management
Quality management is one big area where conventional overseas manufacturers and suppliers simply can’t compete with world-class standards that reflect the finest thought leadership of developed markets. This is especially true in sophisticated segments like medical devices and aerospace.
In these sectors, a quality shortfall can lead to millions in liabilities and lost business.
Many early-stage firms that face a high defect rate ultimately end up closing their doors.
With contract manufacturing outsourcing, you have the opportunity to select a partner with a proven quality management record. That should include certification to the highest standards that pertain to your industry.
For example, ISO 13485:2016 specifies the requirements for a complete quality management system in the medical device field, easily the most challenging industry of today in terms of its standards for end user safety, documentation, and end-to-end supply chain monitoring.
Manufacturing includes more challenges and constraints than it once did, but outsourcing—particularly for prototyping, short runs, and regulation-driven products—create viable, cost-effective alternatives to an in-house manufacturing organization.