How the Right Contract Manufacturer Benefits OEMs [Video]

By Scott Anderson on 03 June, 2020

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Choosing the right Contract Manufacturer is integral to business success, whether taking a strategic outsourcing approach, or a tactical one.  In this episode of Wired Success, Mark Cessar talks with Liberty’s Director of Business Development, Scott Anderson about how the right Contract Manufacturer can benefit your business, and how that can depend on whether the business takes a strategic approach or a tactical approach to outsourcing the work.

Transcript

Mark:
Hi my name is Mark Cessar and I'm joined today with Scott Anderson. He is the Director of Business Development at Liberty Electronics. He has worked here for 20 years and has almost 40 years in the industry. Our topic for today is “how the right contract manufacturer can benefit your business.” So Scott, will just start right in so how can the right contract manufacturer help an OEM improve their bottom line?

Scott:
Well thanks Mark, it’s good to be here with you today. What we find it really depends on the approach that the customer takes. If they're taking a strategic approach, it's one answer. If they're taking a tactical approach, it's another but either way, they can expect to achieve some cost reductions, lead time reductions, capacity increases, and quality and reliability improvements

Mark:
Can you elaborate or provide any examples of tactical versus strategic outsourcing?

Scott:
Sure. On the strategic side, it's more involved but there is a greater up-side. And so we find that customers are looking at focusing on their core competencies. And so they're looking at final integration and test and looking really for Liberty to become an extension of their factory to manage this commodity for them. And so this allows them to reassign personnel to more value-added work, reallocate facilities to more value-added work, and at the same time taking advantage of Liberty's lower rate structure and specialized technology that they might not possess.

Mark:
Well, is there anything else you'd like to add?

Scott:
Well, there are some additional benefits on the strategic side that are worth mentioning particularly on the design side. When companies can integrate more tightly, share information, it results in some significant improvements at the front end. And in addition, strategic agreements are another piece of this that we find helpful. It allows Liberty to build to a forecast and then we can stock raw material, we can stock finished goods, and it takes an assembly that might otherwise be a twenty-six week lead time and convert it to about two days, allowing us to support pull systems and VMI 3PO fulfillment Systems.

Mark:
Well thank you Scott that's all I have today and thank you for tuning in to another discussion on Wired Success presented by Liberty Electronics.

 

Topics: Supply Chain Challenges, Operational Efficiency, Manufacturing, Quality Control, Procurement, Cost Control, Aerospace, Commercial Industrial, Rail

Author: Scott Anderson

Mr. Anderson joined Liberty Electronics as Manager of Engineering in July of 1999. In 2010 he was appointed Director of Business Development. He previously worked as a project engineer at Pratt and Whitney Aircraft and at Joy Mining Machinery. At Joy, Scott went on to manage international projects including quality improvement initiatives, computer system implementations, and new product development programs.
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About Wired Success 

Wired Success is a Liberty Electronics publication for engineers, procurement professionals, and others in manufacturing and the supply chain who want to keep up with news, advances, and products for use in a range of industry sectors to include aerospace, defense contracting, rail, light transit, medical devices, and more. Please subscribe for regular updates or follow us on our social media channels. For media inquiries, please contact us here.

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