Common Myths about Contract Manufacturing Companies

If you have special requirements for machining and fabrication you may occasionally have the need to outsource the work. In fact, many businesses today are turning to contract manufacturing companies for a number of reasons. However, there are few concerns about outsourcing and many of these concerns are simply not true. Here are some of the most common myths associated with outsourcing.

Myth # 1 – It Costs More to Outsource

Some companies see themselves as “middlemen” when they decide to use an outside service. In other words, the outsourced company creates the products and sells them to your company. You must mark up the costs and pass them on to your customers and this can create higher cost products. On the surface, this may appear to be true, but let’s look a little closer at the issue.

When you take advantage of services from reputable contract manufacturing companies , you can lower your operating costs considerably. For instance, a machine shop may need fewer machinists on the payroll. You may not need to invest in expensive computerized machinery to create precision components for customers.

A large shop specializing in outsourced services can afford to create products cheaply and faster than smaller companies. As a result, their prices and rates are cheaper and this helps to keep your prices to customers down. In fact, you may actually be able to charge less for services than if you produced them yourself. Instead of costing more it may cost less.

Myth # 2 – You Need to Hire Third World Companies

Some services are using companies from overseas because of the cheap labor market. However, in many cases, quality of workmanship and materials can suffer greatly. This is true, but you do not have to go overseas to find the best contract manufacturing companies. There are some excellent sources here in the United States and some are located in the Midwest for the most accessible shipping.

Myth # 3 – You Will Alienate Your Workforce

When you think of outsourced services, you may think about companies moving their entire operations overseas or to Mexico. This can cause many people to lose their jobs. The truth is, you can use American companies to serve your needs and there is no need to lay off your loyal workers. Contract manufacturing companies are there to handle your excess workload and make it easier on your people. Plus, they can save you time and many company resources. In addition, you can enjoy expert services like CNC machining and prototyping, to increase your business.


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