The U.S. manufacturing index hit its highest mark in almost three years this past June, driven by increased production demand. As contract manufacturers continue to see an increase in orders, OEM’s are experiencing the benefits of working with a domestic manufacturing partner.
We’ve helped some of our customers readjust to domestic production and transition back to working with a local partner. We call this our “On-Shoring” model.
While there are numerous benefits to On-Shoring, here are a few of most prominent ones:
Logistics Costs & Supply Chain Velocity
By establishing a local manufacturing partnership with VR, customers are able to utilize our robust global supply chain. This means that they can take advantage of savings from offshore component sourcing while still benefitting from domestic final assembly. Additionally, the improved communication from a local partner allows for timely, accurate information regarding production progress, mitigating worries about unexpected delays or production errors.
When dealing with a domestic supplier, OEM’s are much more likely to benefit from transparency in the quality processes the manufacturer has in place. In turn, this provides customers with peace of mind regarding the quality of their product.
Quality standards are also in place that work to secure your IP and ensure that your documentation is protected. VR is transparent in our quality processes and based on our experience, this is usually a top consideration when deciding to On-shore. Offshore benefits are not likely to be worth the large variation in quality standards.
Engineering Supplier Involvement
Working with a local or domestic CM presents the opportunity to engage in all aspects of the manufacturing process – simply put, we aren’t just order takers. At VR, we find this to be particularly useful for customers in the earlier stages of a product cycle as they can work with us in our Customer Innovation Center. During this time, we collaborate and work through final design for manufacturing issues which often result in a much more efficient component layout. These steps add a high level of value and may address issues that would not arise until much later in the manufacturing process. Finding this type of support with a foreign manufacturing partner is nearly impossible.
If you would like to learn more about how we add value throughout the manufacturing process, consider filling out our Partnership Assessment. A VR team member will be happy to have a conversation with you and discuss your questions.