Industry predictions indicate that manufacturing will grow faster than the general economy*. Growth in areas such as global aircraft manufacturing is projected to spike from the less than 4% rise seen from 2013-2017 to nearly 9.5% from 2017 until 2021. These high manufacturing expectations are bound to cause an increase in production needs for OEMs. But how do you best scale up production without falling victim to overspending on inventory or finding yourself unable to fill orders due to long lead-times and or lack of capacity?
Twenty-five years ago, Liberty Electronics’ system for creating and distributing work instructions was 100% paper-based. At Liberty, as with most companies in the industry at that time, engineers created work instructions for each assembly, printed out each document, and distributed them to manufacturing personnel. These manufacturing employees, in turn, depended on these paper documents in order to assemble components according to contract. Upon completion of an order, the documents often had to be filed for reuse at a later time.
In developing standardized procurement processes, operations and purchasing decision-makers should consider strategic sourcing as a part of their procurement best practices. However, they should keep in mind that strategic sourcing is not a single project but rather a key continuous process.
For those companies sincere about establishing control over their supply chains, incorporating strategic sourcing principles should be evaluated. Decision makers must ask: Do we control our supply chain, or does our supply chain control us?
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.