Different Reasons Why You Might Need Contract Manufacturing
Manufacturers seek scalability and want to reduce process complexities. They also strive to lower, the in-house production burden and focus on their core competencies. While many advanced technologies and industry 4.0 developments have helped manufacturers ease their loads, they still might have a lot on their plate. This is where contract manufacturing comes to their rescue.
Contract manufacturing is allotting your manufacturing work to other specialized manufacturers. It can be the allotment of a specific process, a particular part or equipment, or the assembling process. The core idea is to reduce the burden, enhance production, and shorten the delivery times.
This article explains different reasons why you need contract manufacturing services and how is it a prudent idea.
What is Contract Manufacturing?
Contract manufacturing involves outsourcing the manufacturing of equipment, components, or end-products, to a professional third-party manufacturer.
It adds flexibility to the manufacturing process and helps enterprises to focus their time and efforts on other critical business needs. Cubein has emerged as the preferred contract manufacturing partner for businesses that want end-to-end manufacturing of high-quality products, thus enabling them to focus on other key business development metrics like product development, marketing, and distribution.
Why do you need Contract Manufacturing?
Over the years digitalization, AI, and technological advancements have revolutionized manufacturing, improved quality, optimized processes, reduced costs, and accelerated Industry 4.0. Among these disruptors, a fundamental element of Industry 4.0 has been additive manufacturing or 3D printing.
According to McKinsey’s recent research in collaboration with the World Economic Forum, the potential value created by manufacturers and suppliers who fully adopt Industry 4.0 technologies is estimated to reach USD 37 trillion in 2025.
But is adopting these new-gen manufacturing practices as easy as plug-and-play? Not quite! For businesses grappling with supply chain disruptions, labor shortages, inflation, and inventory management, maintaining profits and growth and cutting indirect costs—fast, remains a prime agenda.
This is where contract manufacturing—a cost-effective manufacturing method—has garnered immense interest from industry players for its ability to scale production without requiring heavy investment in manufacturing facilities.
But is contract manufacturing limited to cost-effectiveness? Well, cost-effectiveness is just the tip of the iceberg and there are different reasons why you might need contract manufacturing.
From cost reduction and access to specialized expertise to enhanced scalability and the ability to focus on core competencies, contract manufacturing can be a game-changer for manufacturers.
7 Top Reasons Why You Might Need Contract Manufacturing for Your Business
Industries like healthcare, automotive, construction, medicine, electronics, etc. are rampant with innovative ideas in the production of critical equipment. According to McKinsey, only 30% of companies capture value from scaled-up Industry 4.0 solutions in manufacturing today. This is because the route from the conception of pilot solutions to manufacturing is long and strenuous, particularly from the investment perspective.
In this blog, we highlight the benefits of contract manufacturing and why looking beyond in-house manufacturing might be the best way for businesses looking for global brand appeal.
#1 A Smart Way to Reduce Production and Overhead Costs
Contract manufacturing eliminates the hassle of collecting resources, labor, tools, manufacturing instruments, designers, warehouses, and materials, making it a cost-effective manufacturing strategy. From designing models of products to manufacturing, contract manufacturers can help you get fully assembled finished products at your doorstep. Labor costs can be reduced and complicated logistics like packaging, shipping, etc can also be outsourced to the contract manufacturers if needed adding to the logistic ease.
Overhead costs can skyrocket if not accounted for in manufacturing. Utilities like electricity, water, labor, machine maintenance, and repairs are the major costs that can be eliminated when you partner with the right contract manufacturers. By reducing your employed workforce, and decreasing the space and equipment needed on-site, you can eliminate many of the hidden overhead costs of running your business.
At Cubein we deploy our expert labor force, manufacturing equipment, and advanced 3D and injection molding solutions to bring your vision of product design into reality by manufacturing high-quality parts, components, and products, thus helping you gain a higher return on investment (ROI).
#2 Gaining The Highest Quality Product Advantage
In manufacturing, the production of high-quality end-products at a breakneck pace is essential to step ahead of the competition. Businesses can utilize the benefits of contract manufacturing in the creation of fully functional, high-quality products, as per international standards, thus improving end-user satisfaction. When you collaborate with a professional contract manufacturer like CubIn, you get the assurance of adherence to rigorous quality control processes, state-of-the-art equipment and tools, and deep-domain expertise.
#3 Transforming Inventory and Supply Chain Management
A complex process like manufacturing requires readiness in all aspects, ranging from the arrangement of raw materials, proper storage in the right conditions, uninterrupted supply of material, and labor arrangement. Contract manufacturers bring with them years of experience in handling diverse materials for varied use cases across domains with efficiency. You can benefit from standardized workflows and optimized processes of established contract manufacturers and smoothen your inventory and supply chains.
#4 Accelerating Manufacturing Time and Market Entry
Speed is synonymous with success in manufacturing and any sort of delay can make the end product irrelevant if the competitor strikes before your products reach the market. Setting up a manufacturing unit from scratch is time-intensive and any obstacles can derail the momentum and lead to delays and loss. Contract manufacturers deliver end-products in short time frames, and expedite product launches, giving you an edge over businesses through early market entry.
When you partner with Cubein, you get the perfect combination of prototyping & contract manufacturing services, thus facilitating scaling through adjustments as and when needed, and amplifying brand appeal and reach.
#5 Boost Design, Manufacturing, and Core Capabilities
The major benefit of contract manufacturing for enterprises is that it enables businesses to hone core capabilities and enhance business performance through customer-centric initiatives and need-specific manufacturing options. Cubein offers versatile services, setting industry- benchmarks, made possible through high-quality products with quick turnaround times and tight tolerances.
#6 Scalability for StartUps and Business Giants Alike
A systematic manufacturing approach and in-depth understanding of the industry, coupled with end-to-end manufacturing resources puts contract manufacturers in a better position to help you scale your product. Contract manufacturers employ cost-effective manufacturing methods and have a better network, providing them with the acumen to negotiate raw material costs. If you are a startup, you can use contract manufacturers’s resources, tools, and expertise to your advantage at a low cost. Whether you need to scale up production or reduce, a contract manufacturer has a robust system in place to make it happen for you without incurring losses.
#7 Industry-Specific Expert Solutions and Technical Expertise
Risk identification, manufacturing-specific recommendations, the right design approach, and technical insight are some of the benefits of contract manufacturing. Every industry needs specialized knowledge and skillsets. From tools to manufacturing equipment, from labor to design engineers, from material knowledge to process expertise, various aspects need to be considered before starting a full-fledged operation.
Contract manufacturers have vast experience dealing with diverse clients from different domains and industries. This expertise can come in handy as you get all the expertise under one roof without any in-house investment. When you collaborate with a professional contract manufacturer like Cubein, you bring the advantage of experience to your business capability.
Contract Manufacturing— A Forward-Thinking Solution
If manufacturing complex high-precision, quality end-products is the goal for your business, then teaming up with the right contract manufacturer can propel your business growth. Global manufacturing consulting firms emphasize the key role that contract manufacturing plays in strengthening manufacturing businesses. If global domination is your business vision a contract manufacturer can make it take shape.
At Cubein, we offer end-to-end solutions right from the design and prototype stage to the manufacturing, assembly, and packaging stage. Capitalize on Cubein’s capabilities to start or scale your business with a low initial investment. With Cubein as your contract manufacturing partner, you can time-market your products at pre-determined deadlines and get full ROI.
