Contrary to conventional thinking, original equipment manufacturers (OEMs) of low-volume, high-mix, high-complexity (LVHM) products can yield significant offshore manufacturing benefits by utilizing a low-cost (LCR) outsourcing strategy. A new management brief, titled “An LCR Outsourcing Option for Low- Volume, High-Mix, High-Complexity OEMs,” explains how. The brief is available for download from the Federal Electronics website at http://www.federalelec.com/lcr-outsourcing-brief.
LVHM products are more complicated and require additional preparation, collaboration, coordination and communication each time another event-driven order or new element is introduced into the schedule, or when production schedules are altered. The keys to success often reside in the ability to remain agile and flexible, delivering the products that meet each of their customer’s unique needs at a competitive price, and most importantly, with minimal, if any delay.
The brief explains how a new paradigm is required to successfully transfer these key traits down through the supply chain and manufacturing processes of LVHM products. It explains how blending both traditional outsourcing and new LCR options produce a hybrid model that marries LCR production with domestic coordination of non-manufacturing activities, which can deliver cost reductions without risking operational flexibility. In the case of U.S.-based LVHM OEMs, the LCR region of choice is Mexico.
Combining the relative strengths of domestic and offshore production in a flexible, hybrid model offers LVHM OEMs a cost-effective option that protects and enhances their ability to respond to dynamic market demands, the paper reports. As with any outsourcing partnership, alignment with a qualified EMS provider that can demonstrate a proven track record in implementing LVHM solutions is critical for project success. While there are standard challenges to every outsourcing initiative, each OEM faces unique circumstances requiring a custom manufacturing, engineering, and supply-chain solution.
As the brief explains, the introduction of this new paradigm provides LVHM manufacturers with an outsourcing option that can be configured and scaled to their unique requirements.
Download the new management brief, “An LCR Outsourcing Option for Low- Volume, High-Mix, High-Complexity OEMs,” from http://www.federalelec.com/lcr-outsourcing-brief.