Outsourcing work you can do in-house is a controversial matter. Many companies argue that taking care of every element of business at their facility improves their brand reputation; however, the reality is that they also have to charge more as a result. On the other hand, lowering costs is one reason to outsource manufacturing.
Why Is It Cheaper to Outsource Wood Manufacturing?
You need skilled laborers and specialized machinery to prepare your workshop for wood manufacturing. That machinery requires maintenance, repairs, and will be replaced regularly with modern equipment. Capital costs will initially be huge before you realize any profits.
Overheads are high when you have to store raw materials for processing. When you outsource manufacturing services, the other company looks after storage. They also deal with the first transport costs of getting raw lumber to their facility. By the time this material makes its way to your workshop to be turned into a piece of furniture, more than half of the weight is gone. That means it takes up less room in storage and transport weight/cost is significantly reduced.
What Happens When a Company Hires Off-site Wood Processing?
Studies have shown that carpentry companies which buy in processed wood for their purposes realize much higher profits than they did before they began outsourcing. If a firm starts up and practices outsourcing from the start, they reduce the amount of warehouse space they need, improve turn-around time on projects, and their investment is lighter. Higher profits are the bottom line.
Are There Down Sides?
Some firms would say they would be unable to control quality adequately if they allowed others to handle wood manufacturing in their cabinetry or furniture-making business. Other experts would argue otherwise: there is no pressure to get this portion of the job done; no temptation to cut corners to meet deadlines. Wood manufacturers, on the other hand, keep stock of oft-used items which are ready for purchase. Their specialists are accurate and reliable.