In such a competitive business world, manufacturing companies are under constant pressure to improve their performance and speed up delivery times in order to keep up with rivals firms.
Most manufacturing companies try to stay competitive by reducing costs through a variety of measures, including locating their operations overseas where labor costs are cheaper. This is a good business tactic for companies whose products will be sold on international markets, but smaller firms don’t always have the capacity to do this. As such, they need to look at a secondary option called Turnkey Manufacturing, whereby they manufacture products closer to home so that they can save money and time.
Turnkey manufacturing is a good bet for those companies that don’t have the resources to outsource their work in developing countries. In actual fact, big companies that manufacture products in foreign countries don’t always save so much, because while labor costs are lower they have to contend with all sorts of other costs, such as customs, taxes, duty, the acquisition of real estate and licenses, inter-modal handling, distribution, logistics and so on. To avoid all of these complications, it’s often better to adopt the turnkey manufacturing approach, which is far simpler for smaller companies to do.
Turnkey manufacturing set ups can also be implemented much faster than outsourcing overseas, saving companies time. Indeed, one great option is to approach third party manufacturing firms that offer turnkey solutions close to your company’s headquarters. Such firms will have facilities located very strategically around the world, saving companies time by providing them with a complete manufacturing set up which includes providing supply chain services as well as manufacturing assignments. Such services include assembly line production, acquisition of the materials required, testing the manufactured objects and ensuring they are at an optimal level, and providing after market services and also providing the very important warranty support.
All these features make turnkey manufacturing, a very popular and sought-after form of production. Some of the companies which provide this service also deal in giving their clients the product design services. There are a few companies which use this model of manufacturing right from the beginning, as their company is dependent on innovative products rather than the ones that are infrastructure-intensive.
Perhaps the biggest benefit of turnkey manufacturing for companies is that it helps them to avoid risk and reduce overheads. The risks of sending work overseas are very high, for example there are physical risks, and variations in the exchange-rate. Other problems include inefficient management control that could lead to heavy losses, and loss of intellectual property. All these risks might sound small but can be very damaging for your company’s progress.
By choosing turnkey manufacturing, these risks are reduced considerably. In addition, benefits include an increased ability to move quickly and respond to market demands, and access to the latest manufacturing innovations and technologies without needing to invest in them.
Packexperten is a leading blog about packaging machines. Here you can exchange tips and also read about what the biggest companies did to expand.