Most modern machine shops have the same goal: provide manufacturing solutions to their customers. Each time your shop solves a customer’s problem, you earn credibility and trust. But there will be times when your shop doesn’t have the resources or capabilities to quote an entire project.
At NTMA, we understand the challenge of wanting to be a one-stop shop but not always having the capabilities to complete a project in-house. That’s why we want to propose a solution: outsourcing to trusted partners.
Why Trusted Partners Are the Answer for Small Shops
When a customer comes to your shop in need of capabilities that you can’t provide in-house, you have three options: no-quote the project, buy a new machine to do the work yourself, or outsource part of the project to a trusted partner. The optimal choice for most shops is outsourcing.
This idea is contrary to trends toward niching down, which might lead modern machine shop owners to believe that their best course of action is no-quoting. But outsourcing work to a trusted partner can ultimately help you strengthen customer relationships—and there’s significant value in that. Here’s how you’ll benefit from this solution:
Expand your network
You don’t gain anything by viewing neighboring shops as competitors. That mentality weakens the manufacturing industry as a whole. When you focus on building strategicpartnerships with shops you trust, you and your partners reap the benefits of more revenue and a larger network to lean on for advice, referrals, and more. Teaming up with a reliable shop is a win-win-win solution for you, your partner, and your customers.
Avoid adding capabilities
The decision to expand your services requires foresight and strategic thinking. Significant resources are needed to invest in a new capability. Wouldn’t you rather spend your money on an updated machine for a service you already provide and then outsource the other capability to a shop you trust? Initiating a strategic partnership allows you to conserve resources and bring in more revenue instead of spending thousands on a capability you don’t need to offer.
Test the waters
If you are interested in adding capabilities, outsourcing is a great way to test the viability of expansion. Modern technology evolves quickly, and it would be a shame to add a capability that doesn’t have the longevity to validate your investment. Outsourcing to a partner allows you to assess customer demand for the service to determine if it makes sense to bring it in-house.
How to Mitigate Risk in Manufacturing Partnerships
Outsourcing manufacturing work to a partner isn’t a risk-free endeavor. Your partner’s performance will reflect on your shop, so if they make a mistake or are late to deliver, it impacts your relationship with the customer–not theirs.
The key to managing these risks is being strategic in your selection process. Ideally, you should identify a partner well before you need them so that you can build the relationship and develop mutual trust before outsourcing any work.
Ideally, you should partner with shops that don’t directly compete with you. A shop that views your partnership as mutually advantageous will put their best foot forward for you—and ultimately, your customers.
At NTMA, we recognize the value of leveraging strategic partnerships to solve customer problems. It’s why we have a robust network of partners ourselves. Join NTMA today for more tips and information on how to run a machine shop!