More often than not, businesses prefer to outsource aspects of the manufacturing process to external job shops, often for good reason. A business owner may find it infeasible to install, operate and maintain a die-casting machine, milling machine, anodizing tank and more all on one site. However, for businesses that decide to consolidate manufacturing and bring some or all of the production line in-house, there can be numerous benefits to reap.
Flexibility and Response Time
When the market changes, new ideas strike or product flaws need addressing, you rarely have time to spare. The production line needs to be adjusted to match, and this becomes all the more difficult when it’s spread out across many facilities and companies. Besides the time needed to relay new plans, partner companies may be unable or unwilling to change production and you have to negotiate or find a new supplier. This isn’t the case if you own those means of production yourself.
The further you spread out production, the more time and money you spend for transportation. On top of that, the route from raw materials to the market may become more complex with more outsourcers, sometimes to the point of products looping back around and costing you extra to end up somewhere close by. Naturally, all of this is eliminated when you establish in-house production.
Design and Customization
Designing prototypes for new products involves a good deal of coordination in engineering, development and production, and the prototype may have to travel the same route that other products do. When production is consolidated, it becomes easier for teams to come together to construct, test and finalize a new product. For companies that deal in bespoke products, the same benefits arise for customized orders.
In-house manufacturing isn’t necessarily the best option in all cases. However, it’s worth considering how it can impact the quality of your products and the cost to fabricate and ship them. For small businesses especially, this could be the ideal production model.