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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.
Missing the Mark on Product Development Hand-Offs
When your OEM product development team designs a new product, they plan for factors like quality, cost reduction and essential features. Once the design is complete, the pre-production phase begins, which bridges the gap between the end of product development and the beginning of manufacturing.
During the pre-production phase, your product development team works with your contract manufacturer to ensure the product is created in a fast, efficient and cost-effective manner. However, introducing your contract manufacturer this late in the process hurts your new product in the following ways:
- Differences between the product plan and production capabilities increase manufacturing costs and decrease your profits.
- Higher prices mean more costs are passed along to your customers, reducing their overall satisfaction.
- Bringing your contract manufacturer on board after product design is already complete slows down the transition from planning to production, increasing your time-to-market considerably.
Even if you haven’t completely outsourced product development to your contract manufacturer, you still need to involve them in the product development process. Your product development and planning team needs to work closely with key personnel from your contract manufacturer from the beginning of the process to ensure your product is made in a fast and cost-effective manner. This is particularly important because it ensures production is tailored to the particular constraints and resources of your contract manufacturer.
Find a CM that is Local to Your R&D Family
Getting your contract manufacturing partner involved early in the product development process means your OEM needs a contract manufacturer that’s located nearby. Why is having a local contract manufacturer so important? Here are just a few reasons:
- In-Person Advantages: Your product design engineers and R&D personnel need to visit your contract manufacturer’s production floor to assess available resources and to tailor the product design to that particular facility.
- Increasing your speed-to-market: Completing the pre-production phase locally and involving your contract manufacturer early translates into a quicker and more efficient production process, which means getting your product onto shelves faster than ever before.
- Decreasing your overall costs by designing for manufacturability: When your product design engineers and R&D teams work closely with your outsourced manufacturer, the contract manufacturer helps you make important decisions on designing for affordable manufacturing, including overall component cost and amount of labor to assemble the product.
In a fast-paced economy, your product development can’t afford to be slowed down in pre-production or mired in hidden manufacturing costs. Your OEM needs to move beyond mere outsourced production and establish an outsourced partnership. With the right partner who’s involved early in the development process, your new product is sure to be manufactured as profitably as possible.