October 1, 2021
Have you heard about OpenBOM’s Contract Manufacturing eBook? We have been inspired to share our knowledge and experience with our customers in contract manufacturing to create a series of blogs about contract manufacturing. Once we did it we understood that it would be really nice to give it to you as an eBook.
Outsourcing and Contract Manufacturing
Many companies consider outsourcing certain parts of their organization, such as accounting, legal, and more. This usually is quite straightforward. On the other hand, deciding to outsource production is a longer and more tedious process.
You are ultimately faced with a decision of whether to outsource the production of your product to a third party or to invest in your own production lines. The good news is that you are not alone.
Companies like Apple, leverage contract manufacturers because of their knowledge and expertise. While companies such as Boeing, Honda, and others purchase parts from OEM suppliers but assemble the final products in-house.
These two production strategies are the complete opposite but both yield companies that are very successful.
Most of us will opt for contract manufacturing. The simple reason is that you would rather invest money into sales, marketing, and engineering rather than the infrastructure to make your product.
To Outsource or Not?
But before you make this decision, you need to understand the following:
- What is contract manufacturing?
- How to evaluate and choose your contract manufacturer
- How to provide CM with a request for quote (RFQ) package
- How to sustain a relationship with a contract manufacturer
- How to develop your product using CM
- How to create a quality standard for CM
In this EBook, we will discuss all of these topics so you can make an educated decision on how to proceed. The point of this EBook is to guide you to decide whether contract manufacturing is the correct path for you.
As a disclaimer, I don’t believe that the contract manufacturing approach is the only way. For example, if you have a very high-value product with low volume then perhaps you may rethink your strategy. Most contract manufacturers are set up for larger run production cycles. A low volume run might result in higher costs, more risk because the CM is not as committed and a larger investment because of NRE’s from the contract manufacturer.
Our eBook will help you to answer these questions and make a decision about your CM journey. You can download the eBook here.
Best, Jared Haw