When manufacturers with different, but aligned, core competencies team up with each other to build effective business relationships, not only do customers benefit, but the individual partners tend to grow more quickly, efficiently and successfully, bringing positive results on the bottom line of all parties.
Corma Industries Inc., a modern manufacturing facility in Calgary, AB, is a believer in working alliances with other machine shops, welding facilities, anodizers, and waterjetting and laser cutting businesses in order to provide customers with the best expertise and quality. There are many reasons why the individual companies benefit from working together.
Developing working alliances with other producers allows companies to utilize manufacturing experts on large, complex projects they normally would not be able to take on. It is also cost efficient and risk adverse to involve other manufacturers, rather than hiring full time employees for a single project. Even though employees can cost about 20% to 30% less than subbing work out to other shops in the short term, companies do not need to worry about paying for salaries, benefits, office space, or equipment to keep staff employed beyond the project.
Working with other manufacturing partners gives machine shops access to complementary expertise beyond the level of their employee skill sets. This is because company managers and team-leads have built up many years of experience and knowledge in the industry and have mastered their wisdom and skills in their area of specialty.
Increased productivity is the largest benefit of sharing work with other manufacturers. Rather than bogging down employees and wearing equipment out on simple but mundane tasks, partners outsource some elements of the job to each other. This allows companies to focus on their core strengths and most profitable assignments, allowing more time to complete the overall project faster.
Utilizing other resources within the industry gives manufacturers more flexibility than hiring full time personnel. In addition to focusing on long-term relationships, partners can also be brought in for a short specific project as well. Lifetime business relationships with other vendors can be simpler than employees, where things can get complicated and can create large costs in the long term.
Manufacturing partners have their own focused knowledge and job-tailored equipment available to alliance members. There may be time when specialized expertise and equipment to complete the task is required. This adds value to clients without having to put out large costs. The trick for this is to find a reliable, flexible partner.
Other manufacturers are independent owners and operators of their business and are not entitled to the same legal protections as employees. Also as previously noted, independent manufacturers will need to take care of all deductions and benefits for the workers, whereas alliance partners look after their own affairs, leaving individual organizations more time to produce the work and less time on administrative tasks.
Most producers often rely on other shops to help with short term or specialized projects. There are many benefits that make sharing work among other manufacturers beneficial, including meeting tight deadlines and impressing the client. It will also benefit members to work with each other instead of against one another to meet the needs of your customers.