Advantages of Outsourcing Production for Job Shops: How Outsourcing Manufacturing Can Grow Your Business

Job Shops: Are You Turning Down Smaller Jobs?

Why Not Grow Your In-House Capacity?

You might be turning down business because you’re already at capacity and unable to accommodate additional work without affecting your current operations. Unfortunately, increasing in-house capacity can be extremely costly. Purchasing new equipment, hiring more employees, and potentially needing a larger facility makes growing in-house capacity a significant investment. In times of rising manufacturing costs, it may not be a wise decision to make such substantial capital investments, especially for small jobs with low profit margins.

Advantages of Outsourcing Production for Job Shops

This is where outsourcing production can help you keep your customers satisfied while serving even more clients without overburdening your resources.
It’s common for job shops to import finished goods from countries like China at a lower landed cost than it would have been to manufacture them in-house. In this case, jobs that are manufactured internally might simply be tying up your resources.
While it might not make sense to outsource manufacturing of small jobs to overseas suppliers, outsourcing your higher-volume, regular production can free up machines and internal capacity to handle smaller jobs in-house. This way, you can prioritize high-turnaround or more complex tasks that require your in-house capabilities.
The advantages of outsourcing production are most pronounced when the volume of the job is relatively high. These are the jobs that are best suited for outsourcing.

Job Shops Can Keep Their Customers Happy with Outsourcing

One of the key advantages of outsourcing production is that it allows you to meet all your customers’ needs, making it less likely that they will turn to your competitors.

Being able to handle any order, big or small, keeps customers satisfied and can also lead to repeat business. Even customers who start with small orders can become long-term, high-volume clients. Additionally, when you are seen as a reliable partner, you are more likely to receive referrals from satisfied clients.

Outsourcing Production Safely

There are risks in outsourcing, and it’s important to recognize them. Many horror stories of bad outsourcing come from businesses that lacked experience or didn’t do their due diligence. If you’ve never manufactured overseas before, there is certainly a learning curve.
That’s why it’s a good idea to hire a professional importer to help with at least the first few orders. This isn’t just any importer—look for someone who specializes in importing metal-fabricated parts. They’ll likely have a network of trusted factories that they’ve vetted with previous shipments, ensuring you receive high-quality products and a hassle-free experience.

Leveraging Outsourced Manufacturing to Help U.S. Manufacturers Grow

Job shops can leverage the advantages of outsourcing production overseas to grow their business, increase revenue, and potentially improve margins while reducing overhead.
Additionally, working with an importer who offers favorable credit terms can improve your cash flow.
If you’re looking for assistance in outsourcing your manufacturing, reach out to Part Distribution. We specialize in helping job shops outsource production so they can grow faster and remain flexible with jobs they still want to handle in-house. Most of our clients are U.S. job shops, not companies that would typically order from U.S. manufacturers. Our goal is to leverage outsourcing to help U.S. manufacturing companies grow.