Putting All the Pieces Together:

Transcription

1 Putting All the Pieces Together: How to Gain Greater Efficiency with Contract Manufacturing A publication by: 1

2 Introduction People with great ideas are constantly in search of the right expertise and resources to make those ideas a reality. This is especially true with respect to engineering and manufacturing products. As a result, many businesses work with other organizations that offer the technical know-how needed to make its products more profitable. This process may require several steps to produce a commercially viable product. For instance, a company may need help with the design of it s product. Perhaps it needs drawings corrected or updated so that production parts can be purchased. Or, it may need help making some of the components based on those renderings. Or, the company may need help with the product s assembly and testing. A contract manufacturing company with a wide range of capabilities (procurement, assembly, test, engineering and field service) can offer all of this assistance. 2

3 Benefits of Outsourcing: Cost Savings Here s a common predicament: A business is manufacturing a product and the volumes are dropping. Even if the business reduces the operation to a minimal workforce, production costs are still too high and the product will not generate acceptable margins. If the business outsources manufacturing, it can reduce its headcount, floor space requirements and related expenses. A contract manufacturing partner has the capacity to accommodate not only its existing products, but can easily ramp up for additional demand. Due to a flex workforce, the contract manufacturer may not even need to add people when bringing on new clients. The business can now more efficiently use its staff and floor space. It may even be able to move to a smaller facility, if desired. Another common predicament: A business may have growing sales and be unable to increase production fast enough. By engaging a contract manufacturing partner, the company s production capacity can be increased quickly buying time for the company to decide what it wants to do long term. It then has the option of either expanding its internal operations, increasing its workforce and floor space, or continuing to use the contract manufacturing partner. Yet another predicament: a business manufactures product that is not central to its strategic plan. A contract manufacturing partner would allow the business to focus its resources on core activities, such as increasing revenues by growing market share. a 3

4 Benefits of Outsourcing: Improved Logistics, Volume Purchasing A contract manufacturing provider should have a planning and procurement group a complete infrastructure that enables it to manage requirements throughout the supply chain, ensuring material availability when needed. A purchasing group can buy from multiple vendors for a variety of client component needs. The contract manufacturer isn t buying one component for a limited number of products; it s buying for multiple products in much greater volume. This results in greater efficiencies and lower manufactured costs than a single organization can achieve on its own. A contract manufacturer will simply add a new client s components into the mix, achieving greater cost savings for the client. 4

5 Benefits of Outsourcing: Improved Efficiency Outsourcing portions of assemblies and products can free companies to concentrate on other, more vital portions of the business. A BancTec example: One of our clients has a large, complex product it designed and manufactures. For the client s salespeople to demonstrate the product, they needed a way to easily transport it from location to location. The client designed a lift system that would allow the salesperson to load the product into a covered pickup. The lift system worked fairly well, but the design needed improvements. The client did not want to devote any more valuable resources to improving or manufacturing the lift system. The client wanted to continue to work on its core product, but desired to offload the design, manufacturing, delivery logistics, and installation of the lift systems in the field, to a contract manufacturing company. BancTec was able to take over the engineering and manufacturing of the lift system, seamlessly adding the manufacturing of the lift systems into BancTec s mix of existing products, and the client is very happy with the results. 5

6 Benefits of Outsourcing: Improved Problem Solving By using an outsourcing company with expertise in several engineering disciplines, the company can provide problem solving, re-engineering and cost reduction capabilities that a company might not have access to otherwise. For many companies, resources may be limited maybe it only has one or two engineers trying to cover electrical, mechanical, and software activities. An experienced contract manufacturing company has more resources and greater expertise available. BancTec has staff that covers a variety of engineering disciplines including electrical, mechanical, software, firmware and chemical. Having a diverse and experienced workforce is imperative for key issue resolution. For example, a chemical engineer can solve problems that electrical and mechanical experts can t. He can help answer questions such as Why is this part wearing out so quickly when there is little frictional force on it? Or, Why does it appear that there is some chemical reaction going on here? Or Is this the best material to use in this application? A contract manufacturer should also be experienced in low and high level programming, electrical board design, and mechanical design. If you have a company with an overloaded engineer or programmer, a contract manufacturer can help offload some of that work, so the engineer or programmer can focus on other issues. 6

7 Benefits of Outsourcing: Expanded Reach of Field Service and Engineering Using an established field service organization with a large United States, Canada, and European footprint is less expensive and considerably faster than trying to build such an organization from scratch. Effective field service can be a problem for some companies. Once a product is in the field, it may need periodic maintenance or occasional repair. Many organizations do not have an expansive service footprint, sometimes only a couple of people at headquarters. In the event of a technical issue, a technician has to jump in a car or get on a plane to reach the failed product s location. This can be extremely expensive and time-consuming. Additionally, as sales grow, if a company has to hire people and set up facilities in different cities, it becomes very expensive, inefficient and resource constrained a monumental undertaking. BancTec has field service operations in most major cities in the United States. We are in key centers in Canada and also in many European countries. We can service equipment in many areas that a manufacturing company cannot easily reach without first building its own service operation. If you ship to most areas in the US, we re already there. We have people in those places, and are able to help immediately service the equipment. 7

8 What Makes BancTec Different Most contract manufacturing companies pride themselves on their ability to assemble a customer s product in a quality fashion. Few have the depth of supply chain capability of BancTec and even fewer have the depth of engineering resources we offer. Lastly, when the added need is for field service, no one can measure up to BancTec. Once BancTec engineers your product, manufactures and ships it into the field, we can also service it. No other contract manufacturing company has all these capabilities. A BancTec example: BancTec has a client with a few experienced service technicians, but nowhere near enough to support each of its sites throughout the United States. BancTec on the other hand already has service technicians in all of the client s locations servicing both BancTec and non-banctec equipment. BancTec and the client worked out an agreement where BancTec would provide first and second-level support, and the client s service technicians would provide third-level support as needed. This solution cost effectively solved the client s problem of how to service all of its sites. This arrangement exponentially expanded the clients capabilities, without exponetially expanding costs. 8

9 How to Learn More The best way to learn more about how contract manufacturing can benefit your company is to reach out directly to BancTec. Our flexible manufacturing and field service options put customers in control. Learn how to leverage our experience to meet your needs. BancTec s contract manufacturing services include a range of offerings: Manufacturing - from assembly to a full-system test Assemblies and sub-assemblies (electromechanical) Logistics Planning, purchasing, warehousing and shipping Repair Mechanical, electrical, obsolescence replacement Engineering, which includes new design, cost reduction, manufacturability and serviceability Nationwide Field Service 24x7 Call Center based in the United States. Designing, manufacturing, and servicing machines for 40 years, BancTec has built an impressive client portfolio through our reputation for innovation, with unprecedented technical strengths in high-speed document processing, as well as imaging, image quality, data capture, and character recognition technologies. 9

10 Learn how outsourced manufacturing can help your business. To request a consultation, call or Contract.Manufacturing@BancTec.com About BancTec BancTec helps clients around the world simplify the process of managing their information. Founded in 1972, the company provides financial transaction automation and document management services for organizations seeking to drive efficiency in their financial and back-office processes. Operating 21 BPO centers in the United States and worldwide, BancTec utilizes a common technology platform to deliver reliability, security and consistently high levels of performance. For further details, visit. 10