When outsourcing first became a topic of conversation among American citizens, business owners, and investors, there was a lot of hype and drama concerning the loss of American jobs to companies overseas. While there can be a time and place for discussing the long-term pros and cons of outsourcing, the industries it benefits, and the locations for third-party companies at home and abroad, there is no denying that a company can save time with outsourcing, as well improve their finances, grow their customer, and edge out the competition in superior quality. Whether you operate a manufacturing company or a retail operation, you can outsource the non-essential tasks to another company that specializes in that field, in order to put your resources and energy into more profitable areas of your company.
Outsourcing for Manufacturing Companies
Through the explosive growth of Amazon and other online retailers, companies that make their money through manufactured goods are places under a lot of pressure to reduce their margins even more to stay profitable. The costs of materials and labor within the United States can be crippling, especially when foreign imports are edging your products off the market with cheaper and more quickly produced goods. The idea of outsourcing is a great way for a company to cut costs, and in the global economy and business world, many companies consider this a natural move. However, the transition isn’t a simple process and it could bring complications you hadn’t considered. The reputation of your brand is hinged upon the quality of your products and service, and putting another company in charge of that reputation through its manufacturing process is a big deal. Even though you might be saving money, having poor quality items, delayed delivery, and used parts can ruin your reputation and consumer base, ultimately leading to a loss in revenue. Prior to your contract with an outsourcing company, your quality control expectations and measures need to be made crystal clear, and your partner should be able to deliver the quality you require. Here are two ways to make sure your product standards are upheld even when your product is manufactured thousands of miles away.
Although you will conduct an initial search on which partner might be the best fit, you should hire an independent auditing company to look at the capabilities and quality controls of your potential contractor. Your initial search may reveal several companies that can meet your production needs, and you will be able to tell which ones are worth pursuing based on the proposals you receive. In addition to requiring at least three references from existing clients, your proposal request should outline your expectations and requirements for production processes, product quality, material sourcing, repairs, testing processes, reporting procedures, monitoring plans, and capacity limitations. The responses from the companies will give you direction on who to pursue follow-up consideration.
The independent local audit that you commission will present a clear practice of potential problem areas. The auditors look at key areas, including production strategies, quality control methods, product testing and revision, and comprehensive inspections. You should also have an audit of the premises completed. Quality control is just as much about the machinery, safety of the work environment, and housing facilities as it is the employees or software programs directing product. There is an international checklist that can be used to conduct the facilities test. A detailed account of the defects, strengths, and weaknesses should be taken.
After choosing your outsourcing partner, you should continue to have on-site inspections and quality control audits conducted throughout operations. Even though the partner company might be across the sea, you need to pay close attention to how your products are reaching the market. This is the best way to ensure your reputation stays secure and your business profitable.