Outsourcing O'Leary's

How Outsourced Manufacturing Can Work for You

Contract manufacturing has the potential to revolutionize the small business and maker community.

Outsourcing: it’s a term that’s becoming more synonymous with manufacturing, especially among small businesses and the maker community. And why not? It’s an affordable solution for the next step in the evolutionary stage of product development. Considering most small businesses and makers lack the hardware to bring their designs to reality, outsourcing or contract manufacturing (CM) is an attractive prospect to overcome limitations in terms of economics. But…it’s easier than ever, and it will change how you do everything.

When it comes to outsourcing or CM, most picture moving their product offshore or to another country, which is a fallacy. Yes, there are tons of manufacturers across the globe, although I would bet dollars to doughnuts there are more than a handful in most major cities across the U.S. and Europe. Each has their pros and cons, but the most mitigating factor underlying every one of them is price—how much per unit, parts and materials, overhead, and labor, as well as shipping.

The key to outsourcing lies in finding the right manufacturer, which can be done on your own utilizing manufacturing resource sites such as Thomasnet.com. Alternately, you can go through a firm or company (outsource the outsourcing) that will take your design data and other mitigating factors and compile a list of manufacturers tailored to those specific requisites. In many cases, those companies will act as the intermediary between you and the manufacturer, handling everything on behalf of the client.

CM is certainly a great option, but in most cases will require additional funding on top of the manufacturer’s price quote. In cases where production is limited to several units, the better option is the DIY route—utilizing direct manufacturer contact, especially if the design isn’t overly complicated or requires specialty hardware—thus saving money in the long run. In the case of the former option, there is a host of online resource specialist companies, such as MFG, Baysource, and Ariba, which will help get your project manufactured without the headaches of DIY.

MFG

Online intermediaries such as MFG will make it easy to connect with the best manufacturer for your specific requirements.

As with all products and services, you do get what you pay for, and paying an intermediary to outsource manufacturing does have its benefits. Some act as a B2B front-end that connects clients to manufacturers around the world utilizing RFQs (Requests for Quotes) based on their designs or prototype models. Manufacturers can then reply if they can meet those specific needs, which gives the solicitor options regarding price-points and timeframes.

Most online CMs will offer the client a myriad of options such as manufacturer location, certification (if the design mandates it), and capabilities, which helps narrow down the playing field of who best to utilize. Some, like MFG, also offer the option of NDA agreements so manufacturers can’t disclose design parameters or hardware to other vendors or applicants.

When it comes to parts, most reputable intermediaries will offer custom solutions in a myriad of different categories to suit the client, including machining, fabrication, and assembly, among others. For engineers and makers, this is akin to a one-stop shopping center that caters to custom products without the need to outsource to several different manufacturers. Some, like Ariba, offer software platforms to help with BOMs, invoicing and product lifecycle management that small businesses can leverage for product cycles and engineering oversight.

Thomasnet

Websites such as Thomasnet.com can help you find local manufacturers and suppliers in your area if overseas is not an option.

The bottom line for either contract manufacturing or outsourcing it on your own is that both have their place and are beneficial based on client’s needs, although CM provides a wider amount of flexibility when it comes to manufacturing capability. Yes, it does cost more if you only plan to manufacture several units. However, you could/can actually save money in the end if you produce more or contract out for more than one design.

On the DIY side, contracting with the manufacturer directly with no intermediary is an ideal solution if you’re producing a limited custom order or prototype. Both also come with risks—production times may change; material availability may come into play; and machine retooling, cost estimates, and quality may become additional factors. With this in mind, homework beforehand will help to mitigate those factors when choosing the route that’s best suited for you, and it’s good to know there are options before taking the leap into outsourced manufacturing.

On a personal note, online CM changed how I made every product. I may make a prototype myself, but production after that was better left to people who build things every day. There was a time I spent almost all my time standing in front of CNC machines, but not anymore.

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