Why Outsourcing Assembly is Crucial for Growth

To boost efficiency and reduce operational costs, companies have started outsourcing assembly tasks. This strategy involves delegating the assembly of products or components to specialized third-party providers. Though this can be viewed as a cost-saving measure, outsourcing assembly goes beyond expense reduction; it is a strategic decision that can have a significant impact on an organization’s growth and competitiveness.

Minimizes Reworks

Without assembly expertise, your business is at risk for errors reworks which can be financially strenuous to your organization. According to the Journal Quality Access to Success, rework can frequently account for as much as 5% of the contact value of a given project. Indicating that for every $5 million invested in a job, rework costs roughly $250,000. Therefore, leveraging a third-party logistic provider’s (3PL) expertise can help your business significantly, reduce product reworks and improve your overall operational performance. A 3PL company, such as NewStream Enterprises, are well-equipped to streamline your assembly processes, this includes, ensuring your components are efficiently sourced, assembled, and quality checked. A reputable 3PL will have experience in managing complex logistics, coordination with multiple suppliers, and optimizing assembly workflow to reduce the risk of error and rework. Additionally, 3PLs, allocate a quality control team to perform inspections and protocols on your product to catch and rectify defects early in the assembly process.

Increase Your Sales

The goal of any business is to grow and significantly boost sales. Partnering with a 3PL that specializes in assembly can allow your business to refocus your resources on your core competencies, such as product design and marketing, ultimately enhancing your ability to innovate and capture market attention. A 3PL with assembly expertise can ensure faster time-to-market, allowing your business to be more agile in responding and shifting market trends and consumer demands. Once your businesses sales start to increase, the scalable nature of 3PL services enables expansion into new markets, both domestically and internationally, without the need for your business to have capital investments. This varied approach, combining core competency focus, efficient assembly, market agility, and expansion capabilities, can lead to remarkable sales growth and competitive advantages in your personal business landscape.

Eliminate Capacity-Related Challenges

Capacity-related challenges are one of the most common obstacles businesses face; partnering with a reputable 3PL provider can be a powerful tool to eliminate these challenges. Without a 3PL, your business will need to scale production to meet increasing demands and have capital investments in equipment, facilities, and labor, which can be costly. Entrusting your assembly tasks to a trusted 3PL provider like NewStream Enterprises, your organization can begin to free up valuable warehouse space that may have been previously dedicated to your assembly operations, ultimately optimizing your storage and logistics capabilities. Within three years, NewStream grew their light assembly program from a 10,000 square foot operation to a 40,000 square foot operation. These operational efficiencies not only help increase your profitability but also allows your business to focus on core activities and drive innovation and strategic planning while your 3PL takes on your assembly-related challenges.

Streamline Product Improvement Plans (PIP)

One of the many advantages of utilizing a 3PL for your assembly needs is the ability to streamline product improvement plans for continuous improvement of your products. A product improvement plan involves identifying and implementing changes to a product or its assembly process to enhance quality, performance, or cost efficiency. For example, in March, NewStream Enterprises was approached by an OEM due to challenges with their current QLS sensor assembly supplier, both in terms of supply and product quality. With NewStream’s flexibility, expertise, and collaboration with the client and original vendor, NewStream was able to implement a customer Product Improvement Plan (PIP). 3PL providers have the expertise and quality control systems that involve rigorous inspections, testing, and data analysis, which helps provide valuable insights into any areas that require improvements. Utilizing these quality control systems, your business can more effectively address product and assembly process inefficiencies, meet changing market needs, and maintain high product quality and reliability.

Build Brand Loyalty

Partnering with a 3PL provider can play a key role in building your company’s brand loyalty by enhancing the overall user experience. When your organization entrusts assembly to your 3PL partner, you are then able to ensure that customer products are well-assembled and delivered on time, creating a reliable and positive experience for your customer. Outsourcing can also allow your business to allocate internal resources more efficiently, ultimately freeing up time and the expertise needed to focus on areas such as customer engagement, marketing, and product innovation. 3PLs have the knowledge and expertise to offer customized solutions that align with your company’s specific needs, enabling the tailoring of assembly and delivery processes to help enhance your brand and customer satisfaction.

By leveraging the expertise and resources of a reputable third-party logistics company (3PL), like NewStream Enterprises, your company can streamline operations, reduce costs, enhance product quality, and achieve a competitive edge. Outsourcing assembly allows your business to focus on core strengths and strategic objectives, freeing up valuable time and resources so that your organization can expand in an ever-evolving global economy.

Ready to outsource your assembly needs? Let’s chat, our team is ready to help!