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Manufacturing Outsourcing

Manufacturing Outsourcing

Manufacturing Outsourcing


We are US based mid-scale interior manufacturing company and looking for options to outsource manufacturing to Mexico. I was wondering, if there are any research papers/ case studies that can help us plan better this activity, if someone has direct experience that will helpful as well. What are the pros/ cons, do's/dont's, how to plan to real detail level.

RE: Manufacturing Outsourcing

Define manufacturing. Are you looking to build a manufacturing facility there? Are you looking to purchase components manufactured by vendors there? Or are you looking to purchase finished assemblies there?

Where are your components being manufactured now? The assembly? The final testing and shipping?

There are many things to talk about with any one of these contexts. One thing I can safely say, it takes more effort and support than senior management wants to believe.

RE: Manufacturing Outsourcing

The further up the chain you go from components to subassemblies to full products the more involvement it will take.
And you will find every error and gap in your documentation. And there will be a lot of them.
There are consultants that specialize in this kind of work.

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P.E. Metallurgy, consulting work welcomed

RE: Manufacturing Outsourcing

@geesaman.d We are working with existing manufacturing company there. We will be giving them component level to final assembly manufacturing work, we are paying for labor only and we will be repsonsible for materials. This involves machined parts, composite manufacturing and sub/ final assembly.

RE: Manufacturing Outsourcing

@edstainless Any lead on consultants?

RE: Manufacturing Outsourcing

My experience is mostly with purchasing component parts made to our drawings from outside countries.

I can say that buying preassembled product from overseas eventually resulted in quality deficiencies that then led to an incident with us disassembling and rebuilding all product before it could ship. I would be extremely cautious that your quality control, stocking plans, and payment terms would not leave you in this kind of pinch.

My company once worked with an overseas supplier that manufactured both the components and the basic final assembly. That supplier quickly and quietly produced an identical product that was made to our drawings and sold in-country where we had no legal recourse. Once that kind of proprietary data is out, it's gone forever so consider separating the assembly information from the component design details. At least that gives you a moment in time to inspect the components with your own peoples eyes before they get hidden and committed to an assembly.
(I have other stories about the senior managers who fell for that trick, one being the Sourcing VP who forwarded a new manufacturer's brochure depicting a product that looked very much like ours, asking if consider them as supplier. Imagine his shame when Engineering had to point out it *was* our product, and he was asking us to send our business to the supplier who ripped off our highly proprietary design?!! I say imagine because this person was wildly arrogant and stupid and had no shame.)

If you're supplying 100% of the components, that's a very good start. Take care that the commercial grade parts cannot be swapped out with lower-cost substitutions. Ensure the assemblers have highly accurate work instructions and the correct tools and are enabled with a process to support them when things don't happen as planned.

RE: Manufacturing Outsourcing

Anytime you move manufacturing quality will slip, the only thing you can do is create and follow a quality plan that accounts for that. Thoroughly inspect the first few batches, gradually reducing inspection as you gain confidence and be sure to budget time and money to resolve issues both stateside and in Mexico.

RE: Manufacturing Outsourcing

We had our purchasing department trained. When they moved parts domestically, they added about $5-10k for engineering and QA involvement.
If the work was overseas it depended on experience that we had with that source.
A new source overseas and they would add about $40-50k.

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P.E. Metallurgy, consulting work welcomed

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