If you reduce your expenses by outsourcing, and if your sales remain the same, you’ll have more money that can be better spent on marketing, debt reduction, research and development, office salaries, and other areas that can help improve your bottom line.
Savings can be derived from
- lower labor costs,
- less expensive tooling,
- shorter set-up times,
- and lower raw material inventory.
Outsourcing Manufacturing for the Better
However, if the quality of your product suffers as a result of outsourcing, then the savings are not worth the damage to your reputation. It is therefore imperative that your outsourcing partner take very seriously their position of responsibility with regards the quality of your product.
Only a partner with experience and well established relationships can be expected to perform to a high standard when a problem occurs, as problems do occur.