It makes sense for some product manufacturers to complete all components and subassemblies in-house. For example, companies producing proprietary products may not want any part of their process to be known outside their premises. But for many companies, manufacturing in-house is complicated and costly. Subcontracting your manufacturing processes can provide a cost-effective alternative. In particular, businesses developing new products can benefit greatly from subcontracting manufacturing. They will experience higher profit margins and get to market sooner with the right partner.
When looking for a manufacturer to partner with for subcontracting full product manufacturing needs, cost is often the primary focus. While cost is important, there are several critical aspects to consider, especially when sourcing a full product manufacturing subcontractor.
Thoroughly research the history of prospective subcontractors and ask for client references. Keep an eye out for labor disputes, civil lawsuits, tax issues or questionable issues in which they may have been involved. Go a step beyond reading testimonials and actually call these customers, so you can hear about their experiences directly and ask questions.
When subcontracting the entire manufacture of your product it is especially advantageous to find a manufacturing partner with comprehensive capabilities. Confirm that they have the staff, resources, and the best equipment available to do your job most cost-effectively. An experienced manufacturer can often provide you with engineering support and expertise, as well as substantial purchasing power to save you on raw materials. Ask prospective sources if you can set up a test manufacturing run to assess the timeliness and quality of their work.
Subcontracting only saves you time and money if the job is done right. They must deliver a finished product that meets your quality standards. In the case of technical and electronic processes, this might include adhering to established product performance or assembly guidelines. Prior to entering an agreement with the manufacturer, samples should be provided for quality evaluation.
In an age of growing regulatory mandates, compliance with local, state, and federal laws and regulations is a critical consideration. While requirements such as environmental impact laws, waste disposal regulations, and labor laws are the responsibility of the subcontractor, problems with meeting these requirements can impact the quality of your products and the extent to which you can rely on timely delivery. Depending on the type of product you are producing, industry-specific compliance certifications may be required.