Many manufacturers look to outsource some or even all of their production. This could be because a specific component falls outside of their speciality, to save on equipment costs or to ensure flexibility as a business. If you are looking to outsource the production of your components, what factors should you consider?
Matches Your Niche
One of the most common complaints I hear from customers is that they have entrusted their production to a job who has let them down. Most often the root cause of this is that it falls outside the scope of their skillset. A lot of jobbing machine shops will tell you they can take on anything and everything but looking at their machines, capacity and sectors they work in should give you a good idea if they are right for you. This may mean you need a few different machinist for different kinds of parts but as is often said a jack of all trades is a master of none. We for example specialise in large in size and complex components and often turn down work that falls outside of this.
The Right Machines
It goes without saying that in order to make parts consistently, any machinist ill need the right tools. Have a look at their capacity list and see what sort of machines they use, how old are they, what is the likelihood of those machines breaking causing significant delays on your production? It’s also a good idea to look at what associated processes they can carry out, any time saved sending parts out for additional boring/wire erosion/electro-plating is money in your back pocket. The machine list is also a good indicator if money is being re-invested into the business.
The Right Accreditations
Having the right procedures and policies in place ensures quality components on a consistent basis. ISO 9001 is the standard across the industry, and probably I wouldn’t recommend working with a company who doesn’t have this. Depending on what exactly you’re producing it might also be good to look for environmental standards such as ISO 14001 and industry specific accreditations like Fit 4 Nuclear.
Price is obviously a big consideration when you are outsourcing, and having competitive pricing is a key factors to look for but there has to be an element of give and take. If a company has taken the time to quote you, it’s only right you feed back to them where pricing sits. It’s not often a good idea simply to go with whoever is cheapest, never underestimate the actual cost associated with managing a sub-contractor and its often wiser to pay a little more for a reliable service.
Once you’ve found a supplier who can produce your components, it’s important that they are going to be around in the long term! Sound financials are a must and despite the strong year in manufacturing as a whole last year, there were several established firms that went under. Few companies will be open about their bottom line but a good indication would be a Dun and Bradstreet rating. A DUNS number is a nine-digit identifier (for example ours is 733900661) and is used to establish a business credit file, giving you a good indication on the financial health of a business.
With any part of your business that you outsource, it’s important to remember that any relationship is 2-way and to some degree you rely on your suppliers as they rely on companies like you. Test the waters with a small job and build from there, hopefully establishing a long term business relationship.