Save Production Costs On Cable Assemblies By Outsourcing

Most of us have seen a cable that features plugs and connectors on each end

. Such cables are ready to be installed as they come fitted with all the required hardware and you would see them being used in electronics and electrical applications. These cables that are fitted with plugs and connectors are known as cable assemblies. And, their demand has been rising consistently over the past few years in response to the booming electronics and electrical products sector. Understandably, a number of OEMs have had to scale up their cable assembly production capabilities by investing heavily for the same.

However, in many cases, contract manufacturing has emerged as a smarter alternative to the heavy capital investments in scaling up operations. This involves OEMs outsourcing their manufacturing requirements for cable assembly, PCB assembly etc to firms that specialize in these very production capabilities. This saves large corporations the trouble of having brick and mortar facilities. They can instead engage their available manpower in other strategic operations such as brand building and sales promotion.

As we know, industries such as aerospace, automotive, defense, consumer electronics etc heavily depend on the use of cable assemblies. The production of such assemblies is a rather tedious process because it involves a lot of cutting, soldering, plugging, twisting and rigorous testing operations. These functions, in turn call for a high level of automation as well as dependence on human talent. Instead of investing so much on this process, it is prudent to simply hire another firm that will carry out these tasks for you.

Contract manufacturers will also carry out other important operations such as plastics injection molding. This technique is important because it forms the base of several products that we use on a day-to-day basis, for instance, phones and remote controls etc.

Here are a few advantages of hiring a third party to carry out your production requirements:

In the global context, if a company establishes its foreign subsidiary as a contract manufacturing firm, tax benefits can be enjoyed by the parent company. This helps reduce tax benefits and reap higher profits. Operations such as PCB assembly manufacturing can be outsourced.

Most such firms possess advanced skills because they deal with different sectors and manufacturing processes. They have strong connections with material suppliers and the best labor force. Several firms depend on third parties for requirements such as plastics injection molding.

Companies stand to benefit from cost savings because they dont have to invest in manufacturing facilities, labor costs, training, wages etc.

So, as an OEM if you need cable assemblies and other components on a large scale, the best option would be to outsource this manufacturing process and focus better on your core competencies.

by: Joseph D

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