Many companies struggle with the prospect of outsourcing processes that are not within their core competency structure. The concept of losing control over components that are critical to maintaining a robust relationship with a customer can cloud judgments and push management to less-than-favorable business decisions.
Consider brazing for example. This process requires highly maintained equipment, a well-trained workforce, space, products, and utilities. Additionally, internal management metrics must be developed and enforced for maximum productivity to be accomplished to hold costs down.
Without a steady rate of parts produced per hour, the cost of executing brazing work will skyrocket. Every company is looking at floor space as an opportunity cost. The size of a single continuous belt furnace is massive in concert with the ongoing preventative maintenance costs to maintain production. Many businesses are challenged in locating (and maintaining) employees while utility costs continue to increase.
When considering whether to outsource work that doesn’t fall into the primary manufacturing roles of your organization, one needs to ask: (1) what are my accurate internal costs considering all the aforementioned components, (2) do I have the productivity metrics in place for a continuous delivery of finished product, (3) do I have the management in place to enforce those standards, (4) could I utilize my factory space to perform a more profitable process, (5) how difficult is finding and training workers to maintain productivity.
Many companies are struggling with the unknown regarding accurate internal costs. It is exceedingly difficult to ascertain (and define) productivity standards that determine if an internal process is profitable (or not.) With attrition figured in, what is the cost of hiring and training a new production employee? If a company is brazing internally, how many parts per hour is your furnace producing? Lastly, think of the liability/consequences of a workplace accident.
Franklin Brazing can help your organization address these questions. We will formulate a comprehensive business case analysis to provide your organization with peace of mind. Having been in business for 51 years, we know the financial details required for a business to objectively determine if keeping brazing, annealing, assembly, or heat treating in-house is advantageous. To find out how Franklin Brazing can help you, call us today at 800-450-7782, or request a quote on our website.
