Why Major Distributors Outsource Certain Materials
Utilizing manufacturing servicess to supply other manufacturers with common parts is not a new concept. Transistors for electronic devices, back casings for watches, internal metal parts like clamps and valves, and base pieces for framing or foundation are examples of pieces that are supplied to manufacturers by Production Machining companies. There are several reasons this practice is used for both volume pieces, and for small orders.
One reason is time. Producing all the components needed for some products would take too long and slow down production. This is especially true of assembly line productions. Having small parts made off premises, and delivered directly to the factory, allows final assembly of products to be faster and much more efficient.
Another reason is space. It is not feasible to operate a major manufacturing plant that makes all required components from scratch. The amount of space needed is not practical. The variations of climates and materials required for separate pieces are too extensive. Machinery is expensive to purchase, large in size, and requires a lot of power to operate. Advanced equipment, like computer numeric controlled, or CNC machining, also requires a great deal of vacant space around the machinery to allow for safe operation.
A laser CNC cutting machine, for example, throws off sparks as it is cutting metals. It has to be clear of anything flammable, any electrical outlets, and other types of machinery. The noise, vibration, and flying embers adversely affects how other machinery operates, especially calibrated or sensitive machines.
Cost is yet another reason. Purchasing all the materials and equipment needed for each part and component, along with experienced technicians, would financially ruin most manufacturers before they could turn a profit. Those costs would have to be passed onto consumers, making competing impossible. It is much more cost-effective to partner with a machining company for some parts, than to create all components in-house.
A variety of machining companies are available so manufacturers can find one that suits the needs, specifications of components, and budgets for the final product. Some companies cater to independent manufacturers by specializing in specific components, and allowing small minimum orders to be placed. Small shops often provide one-time services such as creating prototypes, assisting with designing of new products, or advising on materials for proposed improvements. Large companies provide high volume for major manufacturers that assemble or finish thousands of products each day.
Whichever company is selected to provide components and parts, manufacturers will do well to make sure it is accredited. A company that is SRI acrredited, for example, indicates voluntary participation in training of quality assurance, best practices, and health and safety procedures. It also ensures international standards are adhered to regarding materials, equipment, and customer service. It is possible to learn more about accreditation online.