Posted on 20 Oct, 2016 by Neil Sharp
Picture the scene: you are an original equipment manufacturer (OEM) enjoying healthy sales growth. Business is booming as you win new customers and sell more to the ones you already have.
However, there's just one problem – you don’t have the manufacturing capacity to accommodate your growth, whether because your factory is too small, you are lacking crucial equipment, or you simply don't have enough staff. Furthermore, acquiring more space or moving factories altogether, purchasing new machines, or hiring (and training) new employees are untenable options; difficult, expensive and time-consuming.
So you end up feeling stuck. You don't want to stop growing but you simply can't sustain your operations as they are. Does this scenario sound familiar? It's a difficult and frustrating situation to find yourself in.
However, there is a way forward. Outsourcing part or all of your manufacturing operation to an electronics manufacturing services (EMS) provider could offer the solution you require to continue along your upward trajectory.
Additionally, partnering with an EMS supplier could deliver a host of other benefits to your organisation that will add more fuel to your burgeoning sales.
How an EMS provider can help you increase your capacity
In a previous post, we discussed the concept of completely removing your shop floor by working with an EMS provider. In handing over responsibility to your outsourcing partner, you take away the need to have the people and resources required to make your products in-house. Instead, you can focus your efforts on designing, marketing and selling your products – activities that will naturally accelerate your sales growth.
We outlined four areas of your manufacturing operation that you can choose to outsource:
The more of these you relinquish, the more you ease the pressure on your current resources, thereby increasing your capacity.
Think about it: your sales growth is a result of you selling high-quality products that meet your customers' needs. Will those customers really care whether your products are manufactured in your own factory or in your EMS partner's? It’s unlikely - what they will care about is that you continue to produce these excellent products on a consistent basis and to their requirements. The right EMS supplier will be fully-equipped to help you achieve this.
The additional benefits of outsourcing
Outsourcing to an EMS supplier reduces the day-to-day burden on your organisation. Consequently, you can cast you sights towards driving innovation - and your partner can play a key part in this. For instance, your EMS provider might be able to advise you on how to streamline core processes, or help you to build relationships with new suppliers.
In a research feature for the MIT Sloan School of Management, Mary C. Lacity and Leslie P. Willcocks write: "In recent years, the number of companies that outsource critical business processes to outside suppliers has grown significantly worldwide. […] Many organizations initiated [business-process outsourcing] BPO as part of an operational effort (for example, to reduce costs or access skills), but it has evolved into much more. Senior managers today expect more from BPO service providers than short-term cost savings and meeting minimum contractual requirements. […] Companies want service providers to innovate constantly."
As the saying goes, two heads are better than one and there is real value to be accrued from a strong outsourcing relationship. Of course, this requires trust – a willingness to hand over the reins to your EMS partner and to take their advice on your manufacturing process. However, the resulting benefits are not to be underestimated.
So, as an OEM, if your sales growth is outstripping your current manufacturing capacity – or you are pre-empting that it will in the near future - then outsourcing your manufacturing operation to an EMS provider could afford you the perfect solution. You don't have to consign yourself to remaining stagnant. In entering into a partnership with an EMS supplier, you can continue to grow – and, with their help, you may reach even greater heights.