When it comes to order fulfillment, online sellers are always looking for new ways to improve speed and cut costs. One option that can help many online sellers save money on overhead costs is the outsourcing of Hand Assembly to an Order Fulfillment Center.
Why? Occasionally, it is possible for online sellers to work directly with manufacturers to assemble products. However, depending on the products you sell and the number of manufacturers you use, assembling products at the manufacturing stage is not always an option. Hand assembly production is often best done after your fulfillment center has received all the individual items from your suppliers.
Some of the reasons why companies outsource hand assembly production to their order fulfillment provider:
- Faster Assembly
Hand assembly is best done in bulk as opposed to each time an order comes in. Therefore, it becomes more of a linear operation, meaning items can be assembled more quickly. This should also save you money because pick n pack costs will be less as each hand assembly will be counted as one SKU, as opposed to paying for the pick n pack of each individual item. - Space Allocation
Another way in which hand assembly can help reduce your costs is in stock control and space allocation. Companies spend on average around 20% of the value of their inventory on storage and handling. - Fewer Shipping Mistakes
When items are shipped as an assembled unit, it reduces the chance of order fulfillment errors. It also allows your fulfillment center to pre-print shipping labels as well as eliminate the need for weighing and labelling individual items. - Better Packaging
Hand assembled units can also lead to postal savings with more efficient and cost-effective packaging. For example, rather than packing individual items into a standard-sized box, developing a custom box for hand assembled units can reduce the size and/or weight of your packages. - Cost Factor
A major benefit in outsourcing hand assembly production is that your company only needs to pay a cost per unit. This allows for easy budgeting thus giving you a clear picture of your financial expenditure. Cost becomes a more important factor when you manufacture your own products. You may have to deal with all the expenses of manufacturing as well as dealing with increasing costs of raw materials. Outsourcing to a fulfillment center will eliminate the need for warehousing, reduce the number of employees you require and increase your overall efficiency and productivity. - Quality of Products
Outsourcing hand assembly production helps improve the quality of your products. Your company can dedicate all its infrastructure and workforce to fulfill your core objective. - Volume Flexibility
As your company grows, the demand for your products will also grow. A company that is dedicated in these services can cope with fluctuating demands; whereas, if your company was doing all the work in-house, a sudden increase in required output may cause issues due to the lack of workforce management. - Sub-Assembly Capability
If you were to carry out everything from manufacturing to packaging, it would require you to set up hand assembly capabilities which could be a huge financial burden. Outsourcing these services, could lift the burden and provide initial costs savings.
In conclusion, working with an order fulfillment centers that provides hand assembly production services can help you run leaner, become more profitable as well as provide better customer service and shipping times to your customers.
