Understanding Turnkey Manufacturing
Turnkey manufacturing solutions are a common outsourcing practice. The term refers to outsourcing production to a single manufacturing partner who controls the process from beginning to end. Companies choose this model because it eliminates the hassle of managing relationships with multiple vendors, making it is as simple as “turning a key” to complete a project.
As businesses strive to remain competitive, there is a need to focus on their core competencies. Fully outsourced contract manufacturing lets them concentrate on other areas of their business with less risk and overhead expense. ThomasNet data shows that as of September 2018, sourcing activity was up 33% month-over-month for aerospace contract manufacturing.
Shortcomings of Staying In-House
There are many benefits of turnkey manufacturing for OEMs as opposed to keeping the manufacturing process in-house. The outsourced manufacturer takes over the responsibility of much of the life cycle of the product, including everything from design input and acquiring materials to product testing and warranties. Managing production in-house would require a facility, equipment, and labor, which all add overhead and liability.
You can implement turnkey manufacturing services quickly and efficiently, saving the OEM time, money, and resources. While it may seem like you have to give up a certain amount of control to use a turnkey model, the right partner will become an extension of your team. This allows the company to access a partner’s state-of-the-art technologies, processes, and expertise, and to focus on its core competencies, giving you a significant competitive edge.
Why Turnkey Is Working
Today’s turnkey manufacturing models are thriving because of improved communication. Turnkey manufacturers can offer advice related to part design, financial savings, and material options for the project. Communication is a key factor as you work to make sure a part meets the necessary specifications.
A breakdown in communications can hinder the design flexibility and production and significantly increase lead times. A competent turnkey manufacturing partner ensures open communication and eliminates the need to coordinate components between multiple suppliers. This means a smooth transition from prototype to production and fewer invoices. In the end, the improved communication leads to increased efficiency, saving you both time and money.
Checklist to Find a Successful Turnkey Manufacturer
Do your research before selecting a manufacturer. A poorly chosen partner can derail the entire project, increasing costs and reducing your efficiency. Avoid selecting someone simply because they offer the lowest price or the fastest turnaround.
Here is a checklist of factors to consider when choosing a turnkey manufacturer:
- Vet their experience and technical capabilities—this is especially helpful in the design stage when you need a strong project management team.
- Make sure their commitment to quality matches your expectations. Liberty Electronics has a reputation for efficiency without sacrificing quality.
- Going offshore may secure a lower purchase price, but it comes with quality, delivery and communication risks that can result in a higher total cost than a domestic turnkey partner.
- Ensure they have environmental compliance practices in place.
- Look for a company that is agile with sufficient change management processes and infrastructure.
A Strategic Supply Partner
Liberty Electronics works with OEMs across a variety of industries to provide turnkey manufacturing solutions for electrical cable assemblies, wiring harnesses, and other products. We have extensive experience in the commercial, defense and aerospace industries and understand the strict requirements for robotics, missiles, weapons systems, aircraft electronics, and other military products.
Contact us for more details about working with our team for your next project.