Having one invoice from one supplier for a product or a sub-assembly instead of many invoices from multiple suppliers; reduces the administration involved in keeping track of purchases, payments and the cost of the goods as they enter the production process.

Manufacturing a product that uses many parts and sub-assemblies requires resource to manage stock levels and to ensure that the components are all available at the required time. Using a sub-contract manufacturing service removes the need for multiple supplier and multiple stock management saving time and freeing up valuable resource. Procurement of a sub assembly instead of procurement of components provides certainty in product availability, improves the flow of product through assembly reducing the lead-time from customer order to delivery.

From stocking many components in many individual stock locations to taking delivery of a finished product or sub-assembly saves on storage space, resource to pick the components for works orders, resource to keep a check on stock levels and resource to assemble the product.

Knowing the value of the components you hold for production can be difficult to track as component costs may vary depending on availability. Similarly, the cost of the labour to store the product, pick works orders, check quantities in stock, make the product and package it is usually hidden. Some of these hidden costs are gathered together as business overhead which can mean that the true cost of manufacturing a product is not known.

Off-site manufacturing smooths the peaks and troughs of demand. Having a workforce which can be called upon within a short time frame will add flexibility. Day to day, routine and mundane activities that consume time can be outsourced to suppliers who specialise in optimising assembly with increased automation.

The people who work for the company are its most valuable asset. The workforce is a resource that have the greatest impact on company productivity which it is why it makes sense that they focus on activities that add the most value. Removing the activities that do not add value in-house can allow your workforce to become more agile, allowing them to match their activities with changing customer requirements.

Using development and design resource to develop new products whilst supporting existing manufacturing activities can lead to a lack of focus on strategic goals. Taking away the need to maintain existing activities can concentrate R&D teams on developing new products and reducing time to market.

Balancing changing demands using off-site sub-contract manufacturing creates an available workforce to be called on when needed. Off-site sub-contract manufacturing can increase production capacity with minimal investment.

Having one supplier providing an assembled product instead of lots of suppliers supplying different components that require assembly, streamlines the manufacturing process. Reducing the supplier base eliminates time-consuming supplier and stock management issues from your procurement process.