Thursday, March 4th, 2010
Manufacturers are continually challenged with ‘make or buy’ decisions. Elements of the make or buy decision include: maximising margin, minimising risk, core business focus, supporting and sustaining the process, process reliability and control, nature of technology (e.g. disruptive vs core)
Electroplating is an example of a process sometimes considered more appropriate to hold in-house. However the trend in recent years is toward outsourcing of this process. Why?
Consider these points:
Outsourcing lets everyone focus on what they’re best at.
Metal finishing is most often just a small part of the final product. Outsourcing any plating or finishing required enables the manufacturer to focus on their own areas of expertise (e.g. designing and making the product), without unnecessary distraction from ‘non core’ activities. Your metal finishing service provider has chosen that field as their core business, therefore they are better positioned to develop and control surface finishing processes, skills and knowledge whilst managing complexity and improving the quality.
Increasing Environmental Awareness has most serious manufacturers seeking to reduce impacts. Outsourcing is an opportunity to score ‘green points’ through elimination of hazardous processes. At the industry level, the servicing of a number of manufacturers by a single electroplating service provider, enables economy of scale to kick in – a real plus for the overall impact on our environment. Of course outsourcing also enables the manufacturer to diminish the risks associated with managing hazardous processes from both environmental and employee safety perspectives.
Activity in Skills Development for Electroplaters and Polishers at the broad industry level has severely diminished in the last 10 or so years. Is it feasible for a manufacturer, whose core business might be product development, design or production, to be burdened with responsibility to develop and manage skills/knowledge in a specialised field like electroplating?
There are obviously many more elements to the make or buy decision. Ultimately the ‘right’ decision will be the one that best supports the manufacturer’s endeavour to “deliver a product of the required specification and quality to its customer at the right price”.