Cost Savings with Contract Manufacturing

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Cost Savings with Contract Manufacturing

Companies of all sizes are always looking for ways to lower costs and increase revenue. Technological advances like Computer Numerical Control (CNC) Milling, Computer Assisted Drafting (CAD), and others make manufacturing much faster and easier than before.

Cost savings with contract manufacturing (CM) is one of the best ways for businesses to optimize both time and money and become more efficient. When one company works with a contract manufacturer to produce parts or entire products, they can count on both quality and a competitive price per unit. Many CM companies work with specific manufacturing niches, such as oil & gas, construction, or food and beverage industries.

Cost Savings With Contract Manufacturing

Companies who decide to outsource their manufacturing will quickly realize the benefits:

• Companies can reduce the cost of having their manufacturing facilities by utilizing cost savings with contract manufacturing.

• All costs associated with labor, such as training, wages, and benefits, are also handled by the contract manufacturing company

• Companies engaged in contract manufacturing have the latest technology and highly skilled workers who have needed expertise to use them

• Cost sharing: CM companies also work with economies of scale. With multiple manufacturing clients, their cost for raw materials is lower because they buy larger amounts, and can pass on the cost reduction per piece to the client

• Companies can advantage of streamlined manufacturing processes that consistently produce high-quality products

• Reduction of overhead costs

Working with a contract manufacturer means that businesses can focus on their core competencies while their parts and/or products are made accurately, more efficiently, and at a lower cost.

Other Benefits Of Contract Manufacturing

Contract manufacturing cost reduction isn’t the only reason to outsource, because there are more than just financial benefits.

• Outsourcing to a contract manufacturing company means that a company can change production quantities according to need, avoid stock shortages or excess inventory, and mitigate the risks of market fluctuations, erratic changes in demand, and costs of inventory

• The contract manufacturer can advise on the best materials, applications, and processes when designing and sourcing a new product.

• Quality control is also handled by the contract manufacturer

• When partnering with a reputable contract manufacturer, your intellectual property will also be protected. The contract will include IP protections that will keep your proprietary information safe.

• Partnering with a contract manufacturer allows businesses to optimize their internal resources and streamline the production process. This approach can be especially advantageous for smaller companies aiming to compete against larger, more established rivals, as it helps minimize the time and effort required for production.

• A company can explore more marketing strategies when their manufacturing is being handled. By testing different marketing, a company can develop more adaptable and agile marketing strategies without limitations from in-house marketing.

• Delegating production to a contract manufacturer allows businesses to conserve internal resources and lessen the time and energy invested in the overall manufacturing process. This strategy is especially useful for smaller companies striving to compete with larger, more established industry leaders.

• Many contract manufacturers offer “end-to-end” services, from raw material procurement through the finished product, making the process simpler and lessens the cost of hiring employees.

• A contract benefits both parties: in addition to handling one company’s manufacturing, the contract manufacturer also has a steady flow of business for the duration.

Cost savings with contract manufacturing is one reason to start outsourcing. But the overall benefits can go beyond saving money.

Let Brown Industries Handle Your Contract Manufacturing Needs

Whether you need help fabricating a single component, a subassembly, or manufacturing a complete product, Brown Industries offers contract manufacturing for whatever your company designs. Whatever you can design, Brown Industries can help you manufacture it faster and for less.

For more information about our services or to discuss your manufacturing project needs, please get in touch with us today at (816) 231-2454.

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