Part 1: Introduction - BDD can optimize your company's resources and allow it to focus on core competencies.

Global competition, labor costs, equipment upgrades - these factors and many others increasingly pressure manufacturers to find new ways to minimize costs and maximize profits. In response to these pressures, a variety of manufacturing methodologies have been developed and implemented to address various aspects of the manufacturing processes, such as improving quality, reducing waste and reducing inventory overhead.

Just in Time manufacturing, Lean manufacturing, Six Sigma - these methodologies, and others, have proven successful in practice. But all of these methodologies can have significant start-up costs, whether through an investment in new technology or training costs.

There is a relatively simple way for your enterprise to increase productivity, reduce risk, reduce time to market and lower inventory and training costs, without the investment and time required to adopt a new manufacturing methodology - Partnering with BDD, LLC.

Partnering with BDD is the "ultimate in Lean manufacturing" because it allows your enterprise to increase its production efficiency by moving the manufacture of components and subassemblies to BDD

Part 2: Define your core competency then Partner with BDD

C.K. Prahalad and Gary Hamel first defined "core competency" in a 1990 Harvard Business Review article, "The Core Competencies of the Firm." According to the authors, "Core competencies are the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technology." In other words, core competencies are those things that differentiate a company from its competitors.

According to Michael Corbett & Associates, a management education and research firm, "Core competencies are skill and knowledge sets, not products or functions. Core competencies must be flexible, long-term platforms for success. They are limited in number usually - three to five - and exist at unique sources of leverage in the value chain. They are in areas where the company can dominate the competition and they are embedded in the organization's systems."

Partnering with BDD allows your organization to focus on its core competencies. Non-core activities are part of a customized program with BDD - for example, manufacturing and quality control. Once partnered with BDD, management is free to focus on core activities, the activities that will differentiate your company from your competitors.

Technology-based manufacturers, for example, have a particular need to focus on their core competency of research and development. If technological innovation is what separates an enterprise from its competitors, then the company's resources should be predominantly directed to that area - not manufacturing.

In contrast, the core-competencies of BDD is to provide flexible, agile and reliable manufacturing services, and to produce quality products that add value to their customer's bottom line. Our focus is not on research and development, instead, we invest in production technology and workforce training.

After identifying your company's core competencies, look at the remainder of your companies activities, particularly in the manufacturing area. Of the manufacturing activities required to build and package your products, you are likely to find that few of them are unique and specialized activities that differentiate your products from the competition.

You must then evaluate whether you are really optimizing your company's time and money by undertaking manufacturing activities that are not core competencies. Are there production functions that are better served by moving them out of your facility? By Partnering with BDD for your manufacturing, you can then optimize your company's resources by committing them to your core competencies.

Part 3: How can product assembly services affect your costs?

When you manufacture in-house, the cost of goods sold (COGS) fluctuates based upon the varying speed of your production. When that same production is transferred to a contract manufacturing vendor, the COGS becomes a static price component, immune from variable production line speed. Your company gains the ability to forecast, design strategies and plan, based on controlled, predictable COGS. In addition, the fixed costs of running that portion of your production line (such as facilities, production equipment and labor) have been eliminated and the variable costs are now within your control.

Partnering with BDD also produces another positive effect, an effect that has a wide-ranging impact on many areas of your business - compressing your supply chain. When BDD takes on the manufacture of components or subassemblies, your enterprise's supply chain becomes compressed; the number of steps or procedures required to manufacture a product are reduced.

The result is a potential reduction in production costs, but additional savings will be realized throughout your enterprise. A compressed supply chain will consolidate the number of vendors required to produce the final product. Therefore, the Purchasing department will be able to consolidate multiple parts into one new component or subassembly; Accounting will have fewer vendors to maintain; Human Resources will be able to deploy the best employees effectively and better manage temporary labor; Quality Control will have fewer parts to inspect; Inventory Control will have fewer parts to count and the enterprise will realize reduced inventory costs; and Shipping and Receiving will have a reduced receiving burdens.

In short, Partnering with BDD adds value to an individual part by combining it into a component or subassembly.

Part 4: Stay home or go abroad?

Off-shore manufacturing presents an obvious and attractive benefit to manufacturers. BDD does have manufacturing partners offshore. These partners manufacture individual parts and complete products for BDD and our customers. BDD can assist your company in locating experts in your desired specialty. We are able to assist you in deciding whether your product is right for offshore production.

Building a relationship with BDD where you can easily communicate with and entrust your enterprise's proprietary processes or intellectual capital is a critical component of a successful program that BDD can customize for your specific needs and goals.

Part 5: Taking the first step

Which manufacturing activities should you consider as candidates for a program with BDD?

Evaluating existing production activities.

Manufacturers with existing production activities should examine processes with high assembly labor. Review the Bill of Materials for components and subassemblies that contain a high percentage of parts purchased from outside vendors. These components and subassemblies are ideal candidates for a customized program with BDD - the parts can be shipped directly from your preferred supplier to BDD for assembly. The finished component or subassembly is then assembled, inspected and tested, then delivered to your company, ready for integration into your final product.

An added benefit is that enterprises can take advantage of BDD's expertise in the manufacturing process - BDD frequently is able to provide insights that can improve the efficiency of the production process, improve the quality of the finished goods or reduce production costs.

Implementing new products or processes.

Starting a new production line or retooling an existing production line to produce new products is time and labor intensive and frequently involves a significant capital expenditure. BDD is an ideal solution - manufacturers can expand their product offerings or modify their production processes without investing in additional capital equipment or adding inventory or labor costs.

Start-up enterprises with technologically advanced product designs, but no manufacturing capabilities, particularly benefit from a custom program with BDD.

Whether you are modifying your production process or adding a new product, you should evaluate all aspects of your manufacturing process, looking for areas where BDD can positively impact your COGS, such as the manufacture of customized components, assemblies, cables, mechanical assemblies and accessory kits. Other activities that are candidates for BDD include facilities management, quality control inspections, sorting, rework, recovery, obsolete component replacement identification, labeling and packing/unpacking.

Keeping a production line technologically up-to-date and ensuring that it can handle all manufacturing activities, including specialty or custom manufacturing, is an expensive proposition. And if those activities range outside your company's core competencies, the investment in capital equipment, labor and training may not be a wise one.

Conclusion: Reducing time to market

Even if your existing manufacturing process is equipped to handle all of your manufacturing activities, Partnering with BDD may still be the optimal arrangement if it can reduce your time to market. BDD is skilled at ramp-up production, quickly and painlessly. Therefore, if you are implementing a project or changing an existing process, BDD can be better positioned to start production quickly, thus reducing your time to market.

In order to gain that advantage, however, you should Partner with BDD early in the process so that your company can gain all the benefits of our experience. Take advantage of our expertise to find areas in your manufacturing process that would be better handled through a customized program with BDD.

Summary

The benefits in partnering with BDD are many. We offer a single point of purchase for both simple and complex assemblies. Production costs are isolated and your company can plan on consistent and predictable COGS. Capital expenditures and overhead costs are reduced and your company has the flexibility to establish either consignment or turn-key relationships.

A customized program with BDD allows your enterprise to better serve your customers by relieving it of non-core competency activities. Your enterprise will be free to focus on technological innovation, market strategy and customer service - activities that will give your enterprise the competitive edge.