What is Outsourcing?

Outsourcing is the practice of hiring a third party or separate company to assist with the engineering, designing, and building of a subassembly on your behalf, freeing up your internal resources and staff to work on aspects of a project for which they may be better skilled or equipped.

OutsourcingWould an outsourcing arrangement work for you? The answer to that question is YES if you have ever experienced an overage in labor costs or a delay in production due to the in-house manufacturing of subassemblies. However, every situation is unique, and the information below will help you learn more about when and whether outsourcing is the right choice.

Your first go-to solution may be to identify areas to cut back on when facing a budget crunch. It sounds like a simple solution, but the reality is that it’s challenging to decide where to cut without putting unnecessary pressure on your team while still maintaining your competitive edge.

For example, you can eliminate headcount, which, of course, is an unpleasant experience in and of itself. But doing so can be harder on the staff you decide to keep. During a typical layoff, not only is the retained staff burdened with the guilt of keeping their job, but they’re also responsible for covering the labor that would have been performed by those who were let go.

You can also consider reducing energy costs by shortening the workday; but again, doing so often results in extra pressure on the staff to increase their overall output by producing the same work product in fewer hours.

Another option is to reduce material costs, but a reduction in material costs could harm the quality of the end product, which is never the solution for a top-shelf producer.

And so, while anything you do to save even a small handful of pennies on the dollar can significantly impact your bottom line, solutions that have the least impact on product quality and employee morale are usually the best to implement.


Streamline Your Production Process Through Outsourcing

Outsourcing the manufacturing of your subassemblies may seem like an expensive choice to streamline production. Still, it’s one of the easiest and cost-efficient strategies to up your game.

Streamlining, regardless of the methods chosen, almost always involves an upfront financial investment of some sort. But, in all likelihood, it will be an investment that will pay off later.

Having a reputation for working more efficiently, after all, can give you a much stronger edge against your competitors. Faster completion of production runs and an improved reputation for on-time delivery very well may lead to bigger and more profitable customers.

In fact, many manufacturers find outsourcing to be both an economical and viable solution. While some manufacturers will choose to struggle with their subassemblies’ production, others consider outsourcing to be their go-to strategy for maintaining their edge over the competition.


Here’s What We Have Found Through the Years

OutsourcingMany manufacturers find it burdensome, even bothersome, to manufacture subassemblies in-house. Subassembly production often leads to their getting bogged down in menial activities and details they’d otherwise like to avoid.

For example, subassembly production often means dealing with multiple suppliers to find the correct parts and materials. Aside from it being another logistical headache, the difficulty in procuring parts means there’s a chance you’ll fall behind while you wait on deliveries. Something as small as a subassembly manufacturing delay can cascade into a much larger problem that could go so far as to derail the scheduling and planning for the overall project.

Outsourcing removes that worry. Once your subassembly project’s details are communicated to your outsource partner, your partner will complete the entire subassembly. They will handle the parts procurement as well, allowing you to focus on the bigger picture and remain confident that the finished subassembly will be completed on or ahead of schedule.

When outsourcing, you have one point of contact — your outsource partner. You will no longer have to juggle multiple contacts and engage in countless follow-ups to ensure parts and materials arrive on time.


Does it Cost Money or Save Money?

In-house subassembly production is often a costly endeavor. The manufacturing company would essentially have to create multiple assembly lines, and often these smaller components are labor-intensive by design. Additionally, one-off projects such as these usually come with their fair share of scope creep. Unforeseen circumstances can often lead to severe profit leaks and a significant drain on labor expenses.

However, when you outsource your subassemblies, no longer will unforeseen labor expenses creep into your project’s scope. Gone will be the line-item budgeting details that go into planning for subassembly production. Your outsource partner will be much more adept at pricing subassembly production, and they’ll total the cost of each part of the project into one single bill.

The entire job, its price, and the delivery terms are determined upfront, so there are no added surprises down the road. A third-party manufacturer—someone who can stock and assemble the parts faster and less expensively — will know what it takes to get the job done and will get it done for the agreed-upon price in the agreed-upon timeframe.

Furthermore, your outsource partner will build subassemblies much faster than you would likely be able to in-house. Your outsource partner becomes a trusted extension of your existing manufacturing capacity.

The time management, equipment, procuring of parts, staffing, training, and anything else associated with subassembly production are all taken off your plate and handled elsewhere. If demand increases, outsourcing removes the worry of having to scale up your manufacturing capacity. The extra demand will be taken care of for you.


Distractions Can be Costly, Too!

While there may be some good reasons to keep subassemblies in house, our customers have found that doing so ultimately results in an unnecessary distraction from the completed end product.

For example, a project with multiple subassemblies requires the details of each to be carefully reviewed and communicated to workers before manufacturing begins. This review again must take place during quality assurance after the subassemblies have been created. Multiple subassemblies can often lead to various issues arising. When the production of a subassembly encounters a problem, it can significantly affect the production of the rest of the project.

Any such problem that needs to be resolved will undoubtedly shift your team’s attention away from the end product and onto the subassembly issue.  Some team members, probably your best team members, will get siphoned away from the larger project to resolve the problems encountered with the subassembly, and the headcount you planned to devote to the main project gets reduced. This situation often results in lost time, cost overages, missed deadlines, and a possible reduction in overall product quality.

Outsourcing the subassembly work allows your workers to focus on the aspects of the project for which they were hired and trained, and with which they are most familiar and skilled.

When you have an outsource partner who can handle multiple subassembly projects at scale, you can rest assured the subassemblies are getting the appropriate attention while your final product is as well.


Outsourcing to U.S.-based Companies vs. Overseas

When selecting an outsource partner, you will be faced with choosing between an overseas company and a U.S.-based company. Let’s examine the two:

Outsourcing Overseas

Outsourcing overseas might seem like a low-cost and easy option, but it can be a roll of the dice when it comes to the quality of labor, materials, and standards you’ll receive.

The number one reason most companies will outsource work overseas is cost savings. If doing so diverts your attention away from where it should be, however, the lost time and distraction could easily defeat the point of outsourcing in the first place.

Communication can become an issue when working with an outsource partner who operates in a different time zone. Lost time due to an inability to connect can easily and frequently occur. Even worse, if miscommunications and misunderstandings of important details occur, a solution intended to save you time and expense can quickly become quite the opposite.

Outsourcing to a US-based Company

On the other hand, choosing a company in the United States as your outsource partner will more likely result in successfully meeting national and international standards. It will also give you the peace of mind to know without worry that you’re in good hands, and the work you’ll receive will be well-executed.

There’s a good chance a US-based company will already be familiar with your needs by having worked with businesses similar to yours in the past.

In Conclusion

Working more efficiently and finding ways to save time can be worth the investment if, in the end, you find you’ve successfully streamlined your production process and turned a profit.

Subassemblies can run the gamut from relatively simple to fairly complex pieces that are difficult to manufacture. And, often the final product being manufactured can be comprised of multiple subassemblies. But outsourcing doesn’t have to be a one-time improvement or an ongoing arrangement, either. When time allows, be sure to review the outsourced work done to identify any changes you can make to bring you and your team closer to an even more updated and refined way of getting a job done. There’s always room for improvement, and the first step begins with you and your team.

Whether it’s the design, manufacturing, procurement of parts, or quality control, trusting subassemblies to an outsource partner is a smart choice that should be explored when considering your next project. We hope that this information will prove useful and that you’ll discover that it will make the most sense to trust your subassemblies to us.


MarVac Assemblies

When it comes to choosing your outsource partner, consider MarVac Assemblies.

MarVac Assemblies, a division of Marsh Electronics, will work with you to develop the solutions that best fit your needs. With MarVac, you don’t have to adapt to any pre-existing format; we’ll adapt to suit you!

MarVac can build, inventory, procure, and deliver subassemblies to you. We’ll meet whatever your needs may be. We have a quality assurance system to always support and provide consistent quality.


Learn more:

You can get in touch with us to request information specific to your needs at this link here: Request Information or send us an email at: Sales@marvacassemblies.com

You can also call us toll-free at 855-627-8222, where we’ll be happy to discuss in more detail how we can be of service.