Wood Outsourcing

Filed in archive Best Practice on September 13, 2006

The wood industry recognizes the need for outsourcing. This was the result of a research study done by the Wood Component Manufacturers Association. The research is done periodically thus analyzing the "make vs. buy" trend which would help in measuring the real status of wood outsourcing.

Most of the respondents in the said research were subscribers of the Wood & Wood Products or Custom Woodworking Business. There were 304 companies which participated ranging from different major wood categories like cabinets, furniture, millwork, etc

One interesting result in the research were the top 10 reasons why 36% of these companies outsource. Here are the top 10 reasons mentioned:

Top 10 Reasons for Outsourcing Components
-Outsourced components cost less
-Do not have the manufacturing capabilities or space
-Take advantage of others' expertise
-Increase productivity and efficiency
-Save time to focus on more important things
-Reduce capital expenditures
-Better quality
-Reduce inventory and overhead
-Concentrate on product development
-Expand variety of products

As you can see, the reasons shown by the study is almost the same as the reasons given out by companies from different industries. Though that is the case, most of the outsourcing contracts were successfully executed. This just shows that good management in outsourcing really makes a difference.