Why outsource Subassembly?

Product managers may choose to outsource subassembly work for various reasons. Here are some common factors that can influence their decision:

Cost considerations: Cost reduction is a significant driver for outsourcing subassembly work. By leveraging the expertise and economies of scale of specialized suppliers or contract manufacturers, product managers can often achieve cost savings. Outsourcing can help lower labor costs, reduce overhead expenses, and take advantage of cost-effective manufacturing locations.

Focus on core competencies: Product managers may opt to outsource subassembly work to focus their internal resources and expertise on core competencies. By delegating non-core activities to external partners, they can concentrate on product design, innovation, marketing, and other strategic functions that directly impact the product’s value proposition and market success.

Capacity and scalability: Outsourcing subassembly work provides product managers with flexibility and scalability. External partners can adjust their production capacity more easily to accommodate fluctuations in demand. This scalability allows product managers to meet market requirements efficiently without incurring the costs and risks associated with maintaining excess internal production capacity.

Access to specialized skills and technology: Subassembly work may require specialized skills, equipment, or technology that the product manager’s organization may not possess. By outsourcing to partners with specific expertise, product managers can access specialized knowledge, advanced manufacturing techniques, and the latest technologies. This enables them to enhance product quality, efficiency, and innovation.

Time-to-market considerations: Outsourcing subassembly work can expedite the product development and production cycle, reducing time-to-market. External partners with established supply chains, streamlined processes, and dedicated resources can help accelerate the subassembly stage, contributing to overall project timelines and enabling faster product launches.

Risk mitigation: Outsourcing subassembly work can help product managers mitigate various risks. By diversifying their supplier base, they can reduce the impact of disruptions caused by a single supplier. Additionally, outsourcing allows product managers to share certain risks, such as production delays or quality issues, with external partners who have expertise in managing and mitigating those risks.

Global market access: Outsourcing subassembly work can facilitate market access and expansion. External partners may have a presence in different regions, enabling product managers to tap into new markets without establishing a physical presence. Outsourcing can also help navigate regional requirements or regulations related to subassembly or assembly processes in target markets.

It’s important to note that the decision to outsource subassembly work should be based on a comprehensive analysis, considering factors such as cost-benefit analysis, supplier reliability, quality control, intellectual property protection, and strategic alignment. Each product manager must evaluate the specific needs and goals of their organization to determine if outsourcing is the right approach for their subassembly requirements.