Going Factory-Direct May Be Costing You More Than You Think
When it comes to outsourced manufacturing, you may think that working directly with a factory is the best route. While going factory-direct seems attractive with the prospect of saving time and money, that is often not the case. It might surprise you to know that working with a Global Manufacturing Solutions Provider can actually be a more efficient and cost-effective partnership than going it alone. Ultimately, going factory-direct is costing you more than you think—let’s take a closer look.
There are obviously many steps to successfully manufacturing your product, several of which come long before you engage in a production contract. To ensure production runs as smoothly as possible, these preparation activities should be completed before bringing your idea to the factory floor. But if you are inclined to rely on your chosen factory to competently take this on, you may be disappointed.
To ensure your commodity can be mass produced to your specifications, you first need to build and test prototypes. Design For Manufacturing (DFM) comes into play here. As your design moves through the pre-production stage, 2D, 3D, or solid models are needed with material specifications, dimensional requirements, and assembly instructions. Many OEMs successfully direct these activities in-house, outsource them to engineering consultants that are often more reliable and cost-effective than factory engineering groups.
Qualifying a Factory on Your Own
Qualifying the right factory to build your product is crucial. Successfully manufacturing any commodity requires an understanding of the specific design, materials, and budget required for the project. Finding a facility that has expertise in your industry is key. Not doing the research to find the right fit could result in problems and delays that could otherwise have been avoided.
To determine if a factory is a good fit, you must fully understand their capabilities. You will also want a well-capitalized factory with a reputation for excellence in quality, on-time delivery, customer service and more.
When selecting a factory on your own, you will be solely responsible for the vetting process. You will need to determine:
- That they have the capabilities you require
- That they are well capitalized and financially secure
- Their in-house capabilities vs. those they need to subcontract
- That they have proof of inspections and/or third-party audits
- Their minimum order requirements
- If their typical lead time meets your needs and expectations
- Their payment terms and if a deposit is required
- If they can cost-effectively handle material sourcing, and what their handling and markup cost will be for those materials
Ultimately, you don’t just need a factory that has the tools required to build your commodity—you need a partner to help you build the best quality product at the lowest price within your time and cost goals.
Potential Pitfalls of Going Factory-Direct
Finding a factory isn’t a straightforward process. And once you choose a partner and start production, there are a multitude of problems that can occur when you work factory-direct:
- Trusting the wrong manufacturer. Without the expertise of a Global Manufacturing Solutions Provider, it can be difficult to know which manufacturer to trust. An experienced solutions provider will have well-established relationships with reputable factories that are fluent in your industry, resulting in the best possible outcomes.
- Communication breakdowns. Language and cultural communication barriers can be tricky. When you work with an overseas factory and you don’t speak the same language, miscommunication is common. You need a partner with boots on the ground who can help you navigate these challenges.
- Lax IP protection. Working offshore may mean more vulnerability for your Intellectual Property. Having an experienced partner with on-site resources on your side offers you added protection because they are your eyes and ears at the factory.
- Price changes. Many issues affect the price of your commodity. Even small changes to design, materials, or labor can alter the price you were initially quoted. A partnership with a solutions provider is an invaluable part of ensuring competitive pricing, on projects large and small, every time. They work to mitigate the cost effects of these changes, because they work with your bottom line in mind, not the factory’s.
- Time constraints. Moving existing production from one factory to another takes time. Developing a new product adds layers of complexity that can be even more time-consuming. Using an experienced partner with on-site engineers working on your behalf can help alleviate some of that time and stress.
Going it alone in the manufacturing process can leave you vulnerable to these pitfalls and more. A reputable Global Manufacturing Solutions Provider like Macrotech helps guard against these risks, offering you all the benefits of having your own team offshore without physically having to establish a presence there.
Benefits of Trusting Your Manufacturing to Macrotech
When you work with Macrotech, you have a partner who has:
- Strong supplier relationships. We have a diverse network of Supporting Factories with whom we have invested time and energy to build strong relationships. We know who to trust, and we don’t risk your supply chain by relying on single sources.
- On-site resources. We offer hands-on supervision of production, quality, delivery, and protection of your proprietary information at our supporting factories in Asia.
- Experience. We have done this countless times over the course of our 39 years in business. You can trust us to protect your investment.
- Legal Safeguards, such as contracts, patents, trademarks, and copyrights. We make sure all of the i’s are dotted and t’s are crossed.
- Financing options. We have the resources to provide capital for the cash flow benefit of our customers and supporting factories.
- Sales, technical, and customer service support from our multi-lingual support personnel in North America and Asia.
Not to mention the intangible benefits of working with a reputable partner, such as flexibility, transparency, and loyalty.
If the thought of finding and working with a factory on your own overwhelms you, partnering with the experts at Macrotech can help take the stress and risk out of the process. Contact us today at +1-408-395-5030 to discuss how we can meet your global manufacturing needs.