3 Signs That A Manufacturer May Need To Outsource?

You sit at your executive's desk at 6pm on a Sunday. You review the production numbers from the previous week while envisioning how great your company can be. Last week was a great week but the company is struggling to keep up with the demands.

Struggle # 1 Customer Service

You have reached the point where you have maxed out your resources. Business is booming! The atmosphere is electric! Beeping squeaking and squealing sounds fill the air. A continuous humming machine puts you into a trance. This is the sound of money being made.The only problem is that you are struggling to keep up with the demands. Your clients love your product but are finding it hard to understand why you can not provide them with more product. They cannot get enough. They are beginning to demand quantities that you cannot produce. The machines are at full capacity. Your managers are overworked. Your order fulfillment time is too slow and now your clients are complaining about incorrect orders. Your company is so close to greatness. It would be heinous to give up at this point. The last thing that you would like to happen is for your company to implode on itself before it takes off. You have worked so hard to perfect your product and attract the clients. You need to find a way to produce more product. It is time to discuss solutions. Should we invest in new machinery? Should we outsource some parts of the manufacturing process?

Struggle # 2 Identity

What is your company's identity? It is a simple question, yet at times it can be difficult to answer. It is within this introspective examination that you come to this question: What do we do best? There comes a time in the growth cycle when it needs to make the decision of what is their core competency. Great manufacturing companies focus on furthering the developments of their strengths. This process and development lends itself to continuous improvement, innovations, new technologies, more efficient processes, and creatively complex systems. With these changes comes a greater opportunity for profitability. Your company is at the crossroads of continuing at the current pace or taking the next step to excellence. When your company starts to struggle with this question , it is to evaluate. Are we better at execution or managing execution?Does it require highly specialized knowledge, training, and tools that we cannot afford ( time or capital )? Is the process or operation highly complex? If I keep this function in house, is my business at risk? If the answers to any of these questions is yes, you may want to consider outsourcing the function.

Struggle # 3 Staying Competitive

How can we stay competitive in our industry? The market is developing. More competitors are entering into the competitive landscape to gain a piece of the market share. Healthy competition is apart of business. You are forced to determine what is your company's competitive advantage.What sets our product a part from the competition? Whatever the distinguishing characteristic is, lowering your cost per unit will be important to your company. Your competitors will develop ways to improve their processes. Do not lose the race. This is typically achieved through new machinery, technologies, processes, etc. Is it going to require highly specialized tools? How much will it cost us to add these things on? Is it worth the investment ? These are questions that you must answer.

Depending on your answer, you may want to consider outsourcing.

Answer:

1. Fill the 12-lbs box full of packing peanuts
2. Pour 12 lbs of peanuts into the 10 lbs box. Leaving 2-lbs of peanuts in 12-lbs box.
3. Empty out 10-lbs box.
4. Pour remaining 2-lbs from the 12-lbs box into the 10lbs box.
5. Fill up the 12-lbs box and pour it into the 10 lbs box until it’s full, leaving 4-lbs in the 12-lbs box.

Figure out what it is you do best and consider outsourcing the weaker functions .