Many companies look at outsourcing part or all of their manufacturing as simply a method of cost reduction. While it’s true that outsourcing can lower operation and labor costs, if that is your company’s only focus when outsourcing, you may be missing opportunities to gain a greater competitive advantage by leveraging the true value manufacturing partners can provide.

So beyond cost, what are the benefits of outsourcing?

1. Outsourcing frees up valuable resources to allow your company to focus on its core competencies. You may be able to do all of your manufacturing in-house, but should you be focusing more on an area where you’ll see a greater return on investment? By reinvesting capital into your core competencies, you can spend more time on innovation and become more financially flexible and better able to respond quickly to new opportunities.

2. Outsourcing also can increase efficiencies and help get your products to market quicker as it allows you to respond faster to production demand variables. A capable manufacturing partner can help you become proactive rather than reactive to create a smoother production flow and cut back on excess inventory.

3. Outsourcing enables innovation and access to new markets. A manufacturing partner with specific industry experience can give you better insight into new opportunities. For example, due to Genesis Plastics Welding’s experience in the medical device manufacturing industry, a medical device OEM chose Genesis to help expand and improve upon existing product lines. Through R&D, manufacturing and supply chain support, this collaborative partnership enabled the company to bring a patented, non-invasive compression sleeve to market that has elevated the healthcare standard within the compression therapy industry. Read more about that story here.

There is no “one size fits all” solution to outsourcing.  The decision to outsource should be in line with your business strategy and enable you to get closer to big-picture business goals. Through careful analysis and preparation, outsourcing can give OEMs a greater competitive advantage.

Interested to learn more about outsource manufacturing? Download our free eBook, Contract Manufacturing: A Roadmap For OEMs, for additional information and tools to help you decide when to outsource, evaluate potential manufacturers and successfully navigate an outsourced manufacturing partnership.