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When acquiring a firm that has a manufacturing component, a critical success factor is deciding what to continue to produce internally and what to outsource.
Access current status: Sometimes the manufacturing firm being acquired is not aware of the competitive status of their manufacturing unit. CMN can work with your team to provide an assessment of current manufacturing and quality processes and review strengths and weaknesses.
Start an outsourcing program: Usually improving cash flow is a priority after an acquisitions. CMN can help choose components and products to outsource saving an average of 20-30% of the manufacturing costs. The program begins with some components or products that are chosen for both their return on investment and for their educational value. It is important that the manufacturing unit have success with initial outsourcing projects. These projects help build confidence and trust, and they help the organization develop new business processes to facilitate outsourcing.
Improve Internal Processes: Competitive advantage can be built by choosing what to outsource and what to continue manufacture locally. CMN can work with your team on this evolutionary process. CMN has identified targeted business strategies where outsourcing can play a significant role.
Continuous improvement: Outsourcing is an important tool for continuous improvement. Even if your team focuses on factory automation as a strategy to increase productivity, CMN can play a role by packaging parts for automated assembly. In addition to factor automation, a significant increase in productivity comes through outsourcing. Since there is often internal resistance to outsourcing, it often occurs in fits and starts until effective and efficient business processes are in place. Once in place, these systems and processes improve and expand over time. CMN can play
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