Despite shrinking for a number of years, the use of contract electronics manufacturing services is on the rise. As Al Jazeera America writes, the Organization for Economic Cooperation and Development (OECD) is predicting a huge boost to the U.S. economy over the next decade, driven almost entirely by increased consumer demand for affordable goods. Electronics, arguably being one of the most popular types of goods, will likewise see a boom in purchases and that will in turn lead to an increased demand for contract electronic manufacturing services across the world.
Of course, not every American business understands the advantages of contract manufacturing. Public sentiment over the word “outsourcing” paralyzes too many businesses, keeping them from using electronic manufacturing services for fear of public backlash. However, as you’ll see, the benefits of contract manufacturing far outweigh the risks.
Three Reasons Electronic Manufacturing Services Are So Popular
- Reduced Personnel Costs
- Diversification Equals Lowered Risk
- Little to No Associated Real Estate Costs
For Tompkins International, a well-known international supply chain management firm, one of the biggest benefits of using electronic manufacturing services is the reduced personnel costs they bring. By outsourcing your manufacturing, you can reduce the number of staff you have on hand to produce your products. With labor being drastically more affordable overseas, outsourcing represents a smart move for the business owner looking to cut his or her overhead.
As SourcingMag.com suggests, every business should consider the risk-cutting benefits of using an electronics manufacturing firm. Quite simply, breaking away your manufacturing to another company allows you to diversify risk. By diversifying risk, you better protect yourself from systemic failure, should anything ever go wrong.
When manufacturing your own products, you need to own your own factory. Further, you need to own your own equipment, acquire materials, and insure everything, including your workers. When you outsource to a contract manufacturing firm, you literally need to worry about none of those things. All of those costs are the responsibility of your manufacturing service.
Have you turned to contract manufacturing services in your own business? What made you take that leap? Let us know in the comments below! Learn more at this link.