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Posts Tagged ‘Manufacturing’

Contract Manufacturing

Tuesday, May 22nd, 2012

In contract manufacturing, the hiring firm approaches the contract manufacturer with a design or formula. The contract manufacturer then quotes the cost of production based on processes, labor, tooling, material costs and the quantity required. Typically a hiring firm will request quotes from multiple contract manufacturers. Visits to the manufacturing facilities are also common before a contract manufacturing deal is signed. After the bidding process is complete, the hiring firm will select a source, and then, for the agreed-upon price, the contract manufacturer acts as the hiring firm’s factory, producing and shipping units of the design on behalf of the hiring firm.
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There are many benefits to contract manufacturing. Companies are finding many reasons why they should be outsourcing their production to contract manufacturers. However, production outside of the company can come with risks attached. Companies should identify how they will benefit from a partnership before deciding whether or not they should contract manufacture.

A primary benefit to contract manufacturing is cost savings. Companies save on their cost of capital because they do not have to pay for a facility and the equipment needed for production. They can also save on labor costs such as wages, training and benefits.

There are mutual benefits to both the hiring firm and contract manufacturer. A contract between the manufacturer and the company it’s producing for may last several years. The manufacturer benefits from knowing that it will have a steady flow of business during the contract period. The hiring firm benefits from skills that they may not possess, but the contract manufacturer does. Additionally the contract manufacturer is likely to have relationships formed with raw material suppliers or methods of efficiency within their production that are of benefit to the hiring firm. Contract manufacturers are likely to have their own methods of quality control in place. This can help insure quality that is of benefit to the hiring firm. Contracting out the manufacture of components or complete products can also allow hiring companies to focus on their main business and sales. Since contract manufacturers have multiple customers that they produce for they, and their customers, may benefit from reduced costs in acquiring raw materials due to economies of scale.

How To Choose The Right Contract Manufacturing?

Monday, January 7th, 2008

Choosing the right company to handle your needs for contract manufacturing is the difference between doing well and doing less than well at your project. In a sign of Indian manufacturing coming of age, Bharti Teletech on Wednesday said a range of fixed phones which can read the mobile phone books are ready to launch in last of this year. Although the Six Sigma methodology originally started out as a way to improve processes and products in a manufacturing environment, today it has grown to encompass a broad range of industries. Striving to improve competitiveness by providing customers faster and better products or services which will accomplish more than worrying about the next global crisis is the basic aim behind lean manufacturing. Certain manufacturing accounting software products also support Activity Based Costing (ABC) which helps to know the actual cost of each product and service irrespective of the organizational structure of the company. There are three categories of product that can be used to define the supply chain strategy for a typical manufacturing company.

There are many tools and techniques available for improving overall supply chain performance but few have been developed to help define a supplier development strategy. While the fundamentals of lean manufacturing are somewhat spontaneous, many of the successful components of a lean toolbox have been developed over years of trial and error. When a company or an organization is planning to go into and adopt lean manufacturing, necessary preparations have to be made in order to maximize the full benefits of lean manufacturing. One such method is lean manufacturing a revolutionary business philosophy that focuses on enhancing product quality, cutting costs, executing more efficient delivery methods, and employing personnel in the most productive manner possible so as to maximize profitability and performance. Organizations that are applying lean technology to their manufacturing processes are achieving the greatest improvements in speed, efficiency, and profitability. In the world of lean manufacturing, companies try to produce only what has been demanded by the customer and only when the product is required. Start off by sending drawings or templates of the product that you are considering manufacturing. Organizational group intervention is necessary to every department that is undergoing the process of adopting Lean Manufacturing. Job shop manufacturing software is meant to make the entire manufacturing process easier to manage and control.

Inventory control forms the core functionality of manufacturing inventory management software. Some manufacturing inventory control software packages are much smarter with additional features such as Bill of Materials (BOM), allocation, Material Resource Planning (MRP), purchasing, inbound/receiving, outbound/shipping, sales order invoicing, and reporting and analysis. The various features of this software are inventory control multilevel billing of materials and maintaining the control of manufacturing through job ticket entry. Combined with advanced analytics and optimization software these innovative methodologies help manufacturers utilize real time data from the plant floor to set metrics and better control inventory levels and cycle times to improve customer service levels. Finally simulation software lets manufacturers model a variety of scenarios to determine their impact on inventory cycle times and customer service levels. Variability kills manufacturing performance. Variability is directly responsible for creating customer service issues and over 70% said it makes scheduling difficult.

Shop management software handles the functions of creating quotes, handling and scheduling jobs, managing material, and tracking labour cost. Manufacturing ERP Software does the complete integration of planning and scheduling, manufacturing process, management and procurement of materials, and the other financial business processes of a firm. Manufacturing Scheduling Software offers a system for planning and scheduling the different tasks of the firm. Earlier the scope of Six Sigma was limited to manufacturing processes, which accounted for only two percent of the United States industry. Lack of skilled attention in the construction area has resulted in many poor quality manufacturing plants being built in China. As the auto sector re-positions itself we will see a new strengthened economic cycle in Ohio, but the manufacturing jobs are key to the transition, because most of their economy has been auto manufacturer driven for the better part of 6 decades. To successfully employ lean manufacturing principles, organizations must evaluate all aspects of their business with the understanding that even what seems like an insignificant change can reap significant results.