In today’s globalized world, where countries halfway around the world can communicate and trade instantly, businesses have options that were unheard of as early as 50 years ago. Manufacturing in particular has gone through immense change, not only in the ways products are made but in how they are traded, and by whom. For example, before the late 1970s, electronics manufacturing was mostly handled by in-house assembly and workers. Though products were made in the U.S., the logistics and resources needed for in-house equipment, facilities, and labor was considerably taxing.
Well, things have changed. Starting in the late 1970s, American businesses have increasingly relied upon contract manufacturing (otherwise known as “outsourcing”). What is contract manufacturing? Contract manufacturing is the acquisition of labor on a contractual basis by a company. A company can use another company to make its products for them. The reason for this was to reduce costs in labor and training, which can build up with in-house manufacturing. The benefits of contract manufacturing, American companies realized, outweighed the advantages of conducting business the old way. Outsourcing electronics manufacturing has proven to be incredibly lucrative for American business, which, in turn, has used the profits for even more innovations and ventures.
Electronic manufacturing services are growing at an exponential rate overseas, particularly in Asia. China alone has thousands of factories churning out electronics at a pace unheard of before the 1970s (just one of the benefits of contract manufacturing). In fact, electronics manufacturing accounts for nearly 30% of China’s total trade! Other benefits include focusing on the remaining in-house labor pool, improving product services and design, investing in new projects, and devoting more resources to customer services and marketing strategies.
In today’s globalized world, businesses have opportunities previous generations could only dream of. However, in the same token, they also face fierce competition and innovation. Contract manufacturing is one of the many ways businesses can stay ahead. Consider outsourcing for your electronic manufacturing solutions. For more about this, go here.
