It’s about time…I mean money.
When it comes to producing products it is inevitable that there will be some degree of complexity somewhere in the value chain. Choosing a company that provides bundled services is a great way to manage complexity because it allows for one company to produce and care for multiple aspects of the manufacturing process. The benefit comes from linking the most complex processes inside one organization, reducing errors and taking advantage of single source responsibility for quality.
It’s probably obvious but when specialized products are produced or when components or materials are specialized, shipping across the country or across an ocean may be necessary – for all other situations it may make sense to look to providers who can group parts of the chain. Obviously shipping costs and the time associated with shipments can hamper efficiency in production or supply chain systems.
Coordination of services or connecting process on one campus or facility can also save time. Engineered to order or promotional products are a few examples of products that may not have volumes that support increased efficiency over time but both can benefit from reduced cycle times with bundled services. From coordinating short, complex runs, to introducing new products – the communications of special needs and new specifications can be streamlined more effectively in one organization. This isn’t a cure all for the challenges that low volume or special order products present but it can be a better way to manage them.
Simply put if the costs of coordinating a handful of vendors and providers and the logistics of moving products or components is equal or less than the cost to perform this internally it’s worth taking a look. That being said internal costs can be deceiving because of standard costing systems and the inability to measure soft costs so the real value of bundled services is sometimes difficult to measure. If that’s the case check with project managers or buyer planners who once managed multiple vendors they’ll tell you all you need to know.