A hot topic of debate in America for decades now has been the outsourcing of work to other countries, such as Mexico, Taiwan, India, and China, which can provide cheaper labor and, therefore, cheaper products. Many would argue that this is detrimental to our nation, particularly the lower and middle classes. This is certainly a reasonable argument. For this reason, the word “outsourcing” has gotten a bad reputation, but it is time to clear its name. Not all outsourcing is detrimental to America. In fact, not all work that is outsourced is sent overseas. Some of it – a great deal, in fact – is sent to other companies right here in our own country. Let’s look at the industry of plastics contract manufacturing, for example.
What is Plastics Contract Manufacturing?
When an inventor or company has a new product they want to bring to market, they have to find a way to bring their idea to fruition. Sometimes these people have the skills, knowledge and resources to manufacture their own products. But, sometimes they do not. Sometimes, it is more cost effective or efficient for them to hire someone else to do the manufacturing for them. This is where the plastics contract manufacturing company enters the process.
Typically, the hiring individual or firm will contact several plastics contract manufacturing companies and request quotes. The quotes will contain prices and timeframes based on tooling, labor, and material costs. Once the bidding process is finished, the hiring firm will choose a plastics contract manufacturing company, and production will begin. The manufacturer will first create a mold, and then a working prototype is made. Once the prototype is approved by the hiring firm, the production run will begin. The plastics contract manufacturing company will act as the hiring firm’s own factory, completing production and shipping on their behalf.
Why Is Plastics Contract Manufacturing Beneficial?
Plastics contract manufacturing is beneficial to our great nation for several reasons. First, the hiring firm saves a great deal of money in labor and production. It does not have to hire or manage manufacturing employees, purchase a factory, or buy the equipment needed for production. Second, the hiring firm can focus better on its core competencies if it hands off its manufacturing to someone else. It can also take advantage of the plastics contract manufacturing company’s skills, not to mention its relationship with suppliers of raw materials. Additionally, because these manufacturers focus on manufacturing day in and day out, they are likely far more efficient and productive than a newcomer would be. Finally, plastics contract manufacturing companies produce for numerous hiring firms at the same time. Because of this, they can purchase raw materials for a much cheaper rate than a hiring firm that does its own manufacturing.
