10 Reasons to Outsource Manufacturing

Posted by Craig Zoberis

Dec 8, 2017 6:03:29 PM

Read Time: 4 Minutes

To outsource complete manufacturing of a product versus producing it in-house is a decision faced by original equipment manufacturers every day, and making the right choice can be key to the success of your business.  A manufacturing company may decide to outsource products and services for a variety of reasons. To gain better insight from a client perspective, I recently asked one of our most-valued customers what were some of the reasons their business chose to partner with us for contract manufacturing. Their decision to outsource was researched thoroughly, and in the end, the company realized a host of tangible and intangible benefits. Below find the 10 reasons our customer chose Fusion OEM:

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Topics: contract manufacturing

Rebalancing the OEM Production Floor

Posted by Craig Zoberis

Oct 14, 2016 6:50:27 PM

Read Time: 4 Minutes

As an industrial original equipment manufacturer (OEM), your goal is to produce high-quality, relevant products for your customers that provide the most efficiency in today’s manufacturing marketplace. This efficiency can be achieved by rebalancing your production floor to achieve Product Line Simplification (PLS) with the 80/20 Rule.

When applying the 80/20 rule for product simplification, you liberate your in-house resources required to produce 80% of the products that are only returning 20% of your revenue. At this percentage ratio, the true cost of manufacturing products that are non-core becomes clear. Although lean manufacturing efforts work to create operational efficiencies that also reduce overall costs, the product line simplification process significantly enhances the impact of a lean plant floor. There’s little benefit to applying lean principles to your products that are creating complexity and hidden costs.

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Topics: oem, original equipment manufacturer, contract manufacturing

Give Local Manufacturers Their Due

Posted by Craig Zoberis

Oct 3, 2016 6:01:00 PM

I recently wrote a Letter to the Editor of Crain's Chicago Business. It is reposted in its entirety below: 

Micah Maidenberg’s “Made in America” article (Sept. 12) regarding Steve Wang’s industrial empire
 highlights what has gone awry in the world of manufacturing today. MAT Holdings is certainly a successful company, but that success was not manufactured here in the states. As Maidenberg wrote, “the bulk of [MAT’s] production is in lower-cost countries like China, India, Mexico and Vietnam, plus Europe”. Highlighting the achievements of a local company is one thing, but why do it at the expense of American manufacturers?

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Topics: contract manufacturing

Questions to Ask When Selecting a Contract Manufacturer

Posted by Craig Zoberis

May 13, 2016 6:07:30 PM

Read Time: 4 Minutes

When it comes to outsourcing manufacturing for one of your OEM product lines, no decision is as difficult as choosing which contract manufacturing partner is the best fit for your business.

As an OEM, your standards are high when it comes to how your products are made, managed and moved to market, so it’s natural that you’d have apprehensions about handing over one of your product lines to a contract manufacturer.

Fortunately, choosing the best contract manufacturing partner for your OEM isn’t as difficult as you think. If you weed out the weaker alternatives and eliminate poor-fit partners, the remaining vendors are few and your decision is simple.

The following questions help you determine which outsourced manufacturing vendors are worth your time – and which ones aren’t.

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Topics: contract manufacturing

OEM Product Development: Practices to Keep in Mind

Posted by Craig Zoberis

Apr 29, 2016 5:26:27 PM

Read Time: 3 Minutesvito.jpg

For original equipment manufacturers (OEMs), design and engineering functions are essential to developing and producing new quality products quickly and cost effectively. In order to compete in today’s market, OEMs that are focused on continuous product improvement must adapt and localize their engineering near their production floor.

Fusion OEM has built the business around anticipating and satisfying the needs of our clients. While many contract manufacturers offer similar services, they aren’t created equal when it comes to streamlined solutions. Dependable results with proven records of quality products is how we do business, but at Fusion OEM we take it a step further with these best practices:

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Topics: contract manufacturing

Best Practices to Look For in a Contract Manufacturer

Posted by Craig Zoberis

Apr 22, 2016 6:21:32 PM

Read Time: 3 Minutes

At its core, the best contract manufacturers are all about preserving production with less waste
and less work to improve service value for the customer. As an original equipment manufacturer (OEM), when considering outsourcing to a contract manufacturer, it’s essential to confirm the contract manufacturer is using the latest manufacturing best practices.

Contract manufacturers are focused on getting the right things to the right place at the right time, and in the right quantity. When your contract manufacturer is well organized, they are creating a sustainable organizational structure that’s simple to understand and manage. The following manufacturing best practices are essential ways in which your contract manufacturer works to improve the value of their services for you:

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Topics: contract manufacturing

Price Transparency in OEM Contract Manufacturing

Posted by Craig Zoberis

Apr 15, 2016 5:29:39 PM

As an original equipment manufacturer (OEM), when you choose to outsource to a contract manufacturer you must be certain that the contract manufacturer is producing your product at a reasonable cost and with the same quality your customers have come to expect.

When you have zero insight into your contract manufacturer’s direct costs, overhead cost and profit, you are unsure as to whether they’re giving you a clean and concise quote.  Price transparency is what creates true partnerships. This is why your contract manufacturer should offer total transparency by opening their books to you willingly. Acting as an extension of your business, the right contract manufacturer gives you ample opportunity to review their direct material costs, direct labor costs, factory overhead costs and profit related to your outsource manufacturing program.

The following are the top three ways a contract manufacturer with an open-book policy is beneficial for your business:

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Topics: contract manufacturing

Know Your Indirect Costs Before Outsourcing Your Manufacturing

Posted by Craig Zoberis

Mar 25, 2016 12:11:48 PM

Read Time: 2 Minutes, 30 Seconds

Outsourcing manufacturing is an important decision for any Original Equipment Manufacturer
(OEM), and often in the process of finding a reliable contract manufacturing partner (CM), an OEM overlooks a number of variables. By far, the most overlooked factor is indirect costs.

Before outsourcing, it’s important that you understand all of the true costs of manufacturing (direct and indirect). That way, you’re able to consider all of the factors involved when selecting and comparing different contract manufacturers. With a more level comparison, you’re better equipped to make the best decision for your business.

Many times, an OEM simply compares the internal direct costs of labor and materials to the final price of outsourcing manufacturing with a partner. However, your true cost of manufacturing a particular product line or piece of equipment isn’t just the sum of direct costs from your Bill of Material and manpower assembly costs – it’s much more.

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Topics: contract manufacturing

9 Benefits of a Vendor Managed Inventory System

Posted by Craig Zoberis

Mar 18, 2016 6:42:13 PM

Read Time: 3 Minutes

Your inventory is the backbone of your business. Not having components and finished goods at the correct place and time puts your OEM company at risk. Yet, many OEMs don’t manage their inventory in the most cost efficient way possible. Fortunately, there’s an easy fix for making sure your inventory doesn’t arrive too late (or too early) to your factory floor: a vendor managed inventory (VMI) strategy. VMI reduces your storage and downtime costs by receiving parts exactly (and only) when they are needed. How does a VMI benefit your OEM’s bottom line? Here are 9 ways:

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Topics: VMI, contract manufacturing

Why You Need to Involve Your Contract Manufacturer Early

Posted by Craig Zoberis

Mar 11, 2016 6:28:07 PM

Read Time: 3 Minutes

As an Original Equipment Manufacturer (OEM), the goals of outsourcing work to a contract manufacturer (CM) are twofold: create a high-quality product and get it to market at the lowest overhead cost. Both of these goals can be successfully accomplished if your CM is involved early on in the process.

OEM outsourced product engineering requires consistent communication between Engineers, Production, Procurement, and Management. This guarantees that everyone is on the same page in the beginning of the production process. By ensuring your CM is communicating with product development before production begins, you can have confidence in the quality of your product and the value of the manufacturing partnership.

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Topics: contract manufacturing

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