Alternatives to Contract Manufacturing When Outsourcing Assembly for Increased Production

At first, the labor shortage was a concern for manufacturers. Then, it became a challenge. Now, it’s heading for a crisis. The U.S. Chamber of Commerce reports that between 2021 and 2022, almost 100 million workers quit their jobs. By August 2023, another 30.5 million had vacated their positions. While the manufacturing industry is considered a stable and high-paying employment sector, it hasn’t escaped this trend with more than 500,000 job openings currently going unfulfilled. 

The government is taking steps to address these issues but one thing is clear, manufacturers need to adjust their growth strategies if they want to maximize profits and meet future production demand. In the past, the first recommendation would be to move to a contract manufacturer to increase production rates. However, these firms are now facing the same challenges as in-house manufacturers. As an alternative to contract manufacturing, many firms are investing in automated production machines to make up the difference. 

Here is why you should consider automating in-house production processes instead of opting for a contract manufacturing strategy. 

Contract Manufacturing vs In-House Automated Production: What to Know Before You Decide

Both of these manufacturing growth strategies have risks and benefits. In the past, automation was seen as too complex to implement and the costs couldn’t always justify the investment. Similarly, contract manufacturing puts your fate in the hands of a third party who may not be able to deliver according to your requirements. 

The risks with contract manufacturing include:

• A lack of oversight of the manufacturing process that could lead to a delay in detecting quality issues
• The organization could face the same labor and supply chain constraints as your company, causing the schedule to slip
• You may be sharing intellectual property with an organization that could utilize it to benefit your competitors

While in-house automated production mitigates most of these risks, there are pitfalls to avoid such as:

• Deciding to build an overly complex automated machine cell that is difficult to operate and maintain
• Choosing to implement more production capacity than is required for the short to medium-term
• Partnering with a machine builder that doesn’t understand your requirements and forces you to select a solution that doesn’t meet your needs

To overcome these challenges, consider deploying a Repetitive Equipment Manufacturing (REM) automation solution from Intec Automation. 

One such solution was for the Point-of-Care diagnostics industry. We developed a system that automates processes required to produce test kits. Each kit goes through a variety of feeding, loading, inspecting, and packaging operations. 

Compared to manual processes, our customers don’t only drastically increase their throughput with lightning-fast cycle times, but the inspection and vision systems ensure zero failures come off the line. For any defective part, donor stations quickly replace the unit to keep the entire process going without the need to stop and reload any batch. 

The system was designed and built in 26 weeks, with all phases of the project completed including installation and training in the shortest possible lead time. 

How an Intec Automation’s Repetitive Equipment Manufacturing (REM) Machine Cell Can Help Achieve Your Production Demands

Intec Automation employs an automation design and build process that doesn’t overcomplicate the machine cell. We work with customers to understand the requirements and only recommend a solution that will achieve your production goals. 

An REM automation strategy will:

• Ensure you can automate at the scale you currently require and expand operations as demand increases by adding additional machine cells
• Standardize your in-house automated production process to reduce complexity and ensure operators remain familiar with the machine’s controls
• Deliver quality validation during the manufacturing process to reduce rejects and maintain customer satisfaction
• Establish a basis for further automation as your business grows while giving your current labor force the skills required to remain productive

Often, this means deploying an automated system to meet today's requirements, and then standardizing the equipment when you need to expand capacity in the future. Using this approach allows you to alleviate your current labor constraints without sacrificing production quality. This also means you can standardize training, spare parts lists, and operating procedures while limiting the cost of adding additional machine cells to grow with your production demand. 

To discuss your current growth strategy with Intec Automation and ensure your capacity expansion project is successful, get in touch here.