Why Buying Washers Is a Cost-Effective Option
Why Washers are Cost Effective
The classic manufacturing question, “Should we make or buy?” has no clear answer at first, but when you dig deeper, you can come to realize that there are many costs associated with custom specialty part manufacturing. Amid limited capital, thinned labor resources due to downsizing, and burgeoning operational costs, most executives are revisiting the issue of whether it is more cost-effective to manufacture materials in house or to outsource the job to outside vendors.
When the same question is posed about specialty washers, the answer is crystal clear: Buying washers from outside vendors is definitely more cost-effective in the long run and more affordable than manufacturing them in house. So, how did we come to this conclusion? We’ve served many industries for more than 100 years, and we know that manufacturing washers, shims, and metal stampings can’t be done just anywhere.
Buying Washers Keeps Your In-House Costs Down
Specialty washers are required in a number of industries, some of which include aerospace, aviation, mechanical appliance, car manufacturing, and various others. In this ever-growing competitive era where companies are forced to take drastic actions to save on costs, a number of companies are thinking about manufacturing specialty washers in house.
However, we strongly advise you against making this decision because it will drive up the costs of your washers, rather than decreasing them. Manufacturing washers has its own set of unique challenges. You have to comply with stringent part and component regulations regarding workplace safety and security. The manufacturing process has to be conducted in a way that limits FOD (Foreign Object Damage) occurrences.
Manufacturing specialty washers, unlike other small parts used in the assembly process, generates hidden costs. Sometimes these hidden costs can add up to 80% of the cost of the final product. Hidden costs can be present in all types of parts manufacturing. Usually, specialized manufacturers play on the economies of scale to cover those hidden costs.
Since manufacturing companies like Phoenix Specialty Manufacturing specialize in dealing with large number of unique products, the markup covers any additional charges incurred during production. Producing specialty parts on a limited basis is not feasible for many smaller companies because it results in paying a much higher in-house cost for the final product.
Hidden Costs that Affect the Final Price
Now that we’ve covered how producing specialty parts in house can increase the final price of the product, we can dive deeper into the topic. Below are some specific costs that you may not have thought about before.
Supply chain management costs: Manufacturing washers in house requires a number of supply chain-related costs that contribute to the price of the final product. Some of the tasks include planning, scheduling, counting, ordering, tallying, and quality control. It takes skilled and qualified people in each of these stages to ensure that quality standards and guidelines are met. Hiring and retaining this talent takes time and money. It all contributes to the final cost of the manufactured product, which is greater than buying the product from outside vendors.
Inventory-related costs: Inventory-related costs include storing, moving, and stocking the parts. To avoid wasting money, companies will usually be in production for a certain amount of time—and sometimes this produces more product than is actually needed or used. Since it is not cost-effective to stop production, this extra manufacturing cost is tacked on to the produced units and is counted as excess inventory. Excess inventory requires space, labor, and hikes up overall cost of product.
Save Money by Buying Specialty Washers
In this article, we discussed the many hidden and obvious costs associated with manufacturing specialty parts. It is not something every company can do efficiently. This is why many companies rely on us to provide the quality, custom parts needed for important jobs.
Phoenix Specialty Manufacturing has been providing specialty washers to original equipment manufacturers (OEMs) for over 100 years. Whether you need specialty washers for racing or sports cars, aircrafts, or mechanical appliances, we can create the exact washers your design demands. We use the very latest in processing and quality control to drive down the cost of washers to help you stay within your budget.
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