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Advantage of Outsourced Wood Products/Components
One of the things a company has to determine in outsourcing it's manufactured products is WHY outsource? Why should we give the work to another company when we could produce the product ourselves, control the quality and control the timeline of products manufactured? Below are some of the reasons why our clients come to Jay Bird Manufacturing for their wood product, component outsource needs.
Reduction in Capital Investment
The outsourcing of our clients wood products/components allows a minimum investment in land, labor, buildings, machinery and equipment. To compete in a volume market, the component parts manufacturer must maintain a large investment in modern woodworking machinery. With the neccisity of quick change over and flexible production methods. Not every furniture and cabinet manufacturer can justify this investment in capital equipment.
Greater Return On Investment
Studies have indicated that furniture and cabinet manufacturers can achieve a higher return on investment by better allocating their internal resources to design, assembly, finishing and marketing.
Raw materials-lumber is heavy, bulky and expensive to transport for many woodworking firms. Typically your job may only require partial truck load quantities and firms will pay a premium for the delivery of such raw materials. By purchasing wood components, companies can save on transportation costs since nearly 66% of the weight and bulk of the lumber is removed at the wood component manufacturer. In addition, the location of our plant and our purchasing power gains us an advantage in raw materials delivered to us and the savings extended to our clients. We purchase in truck load quantities ensuring the maximum transportation savings available.
Better Control Over Costs
When purchasing wood components, the exact material cost can be determined. This eliminates the guesswork that often enters into the calculation of a given products' cost. This knowledge will make it easier to calculate a profitable selling price for the finished product.
Save On Inventory and Lumber Costs
Companies who produce their own wood components find it necessary to carry a lumber inventory of the various species used, which ties up working capital that could be more effectively used elsewhere. By purchasing wood components, a manufacturer can increase working capital and reduce inventory carrying costs through quick turnover.
Reduce Overhead Expenses
The use of purchased wood component parts will reduce overhead expenses without a reduction in sales volume. Reductions of raw material inventory and machinery purchases will cut the cost of inspection, supervision, maintenance, indirect mill costs, insurance, depreciation and taxes. More time and talent can be devoted to improving the design of the finished product, marketing and efficiency in assembling and finishing the product.
Advantages of Specialization
Component manufacturers can justify more and better equipment because they serve a variety of markets. They can maximize their lumber yields by cutting sizes for more than one customer from each board, have the opportunity to develop more skilled labor, have advantages in basic raw material procurement, and have the economic justification for research and development in their specialty. They can supply parts more economically than companies making their own parts.
Click on Icons Below for samples of the specialization Jay Bird Mfg Co can provide in your outsourced wood component needs.