How to Decide If You Should Start Manufacturing New Products In Your Business

How to Decide If You Should Start Manufacturing New Products In Your Business

Adding a new manufacturing process to a business’s existing operations can be a major commitment. From the physical space needed to setup machinery or to install an assembly line to the additional costs needed to conduct a hiring process or to take on new employees, new production capabilities often come with a hefty price tag. There are a few considerations that may need to be addressed in order to determine the optimal time to begin manufacturing a new product.

Calculating Initial Costs

When it comes to a manufacturing process, it is not uncommon for the initial purchase, installation, and setup costs to account for the bulk of operational expenses. Demand for a new product must also be considered. Products that fail to generate buzz or make an impression at launch may require businesses to maintain their costly production capabilities for an extended period of time before consumer interest and demand begin to pick up.

Staffing and Manpower

Having to maintain a larger staff can result in swelling overhead costs. Even for businesses that may already possess the employees needed to manage a new manufacturing process, employee training and education may still be an issue. The potential benefits of outsourcing key aspects of workflow or even the entire manufacturing process to a third-party may provide a more cost-effective way to approach the situation.

Physical Space

From having to procure a new warehouse or manufacturing environment to simply incorporating a new production process into an existing assembly line, producing a new product often requires more physical space than many organizations realize. Expanding storage or workspace in order to accommodate a new process is not a financial consideration that should be taken lightly.

Future Plans for Expansion

Weighing and comparing a business’s current needs and resources while ignoring future plans for expansion can only provide half the picture. Factoring in potential overhead costs and future sales projections may be necessary in order to develop a long-term picture of how a new product launch may factor into future growth. Interim steps like hiring temporary workers or working with off-site manufacturing providers like Advanced Circuits can help businesses to better manage upfront costs until they begin to see a return on their startup investment.

When it comes to launching a new product, timing is everything. Failing to account for the additional costs and other expenses that may be related to a product launch could lead to no end of problems and complications. Carefully weighing the options and resources available is essential for determining the optimal time to start up a new manufacturing process.