Contract Manufacturing and Assembly is the process of outsourcing the manufacture of parts and their assembly to an external source. This occurs across a broad spectrum of industries, including defense, aerospace, automobile, semiconductor, energy, medical and special machine builders. There are substantial advantages to finding a small local supplier who can perform both the manufacture of parts and create an assembly.
Why Contract Manufacturing and Assembly work for many companies:
1) Reduce Workload – Planning/Purchasing have one order per assembly rather than multiple orders to suppliers of all the various components
2) Reduce Inventory – No need to stock components that must be ordered in larger quantities due to minimum orders or long lead times
3) Reduce Inspection Time – No need to inspect individual components since assembly can be inspected and tested by vendor
4) Cost Savings – eliminate the need to invest in additional capital equipment or capabilities that they don’t have, including assembly stations and fixtures
5) Eliminate Workforce Challenge – using the skilled workers already employed by the vendor, there is no need to find and hire qualified employees, including temporary staff.
The climate for outsourcing continues to grow as companies increasingly focus on positioning themselves as brands as opposed to manufacturers. In addition, contract manufacturing and assembly provides the people and equipment as needed, allowing the purchasing firm to focus on management, research and development, engineering, and sales.
Shown here is an assembly created by Sirois Tool, from components manufactured by Sirois Tool and standard items, such as bearings, belts and screws, purchased by Sirois Tool.