Intelligent outsourcing of production, in the service of innovation

Creating new products usually requires a high level of scientific and technical competence; But when it comes to mass production, other considerations besides technical considerations come to the fore. Usually the expertise required to build a production line is very different from the expertise required to build a prototype. For example, for the mass production of an electronic component designed by one or more electronic engineers, other types of specialties such as industrial design, molding, control and instrumentation, packaging, etc. are required. A large place must be devoted to production. Buying and equipping the right place is a difficult task. Sometimes it is necessary to obtain all kinds of legal permits, approvals and standards. The process of obtaining these permits can in turn be time consuming and difficult. Mass production also requires a lot of financial resources and requires a good familiarity with financing methods. The list of these considerations is long.

In short, some companies that do well in creating and prototyping new products get caught up in mass production; Because they do not have the expertise, resources and experience to do so. The core of these innovations is usually formed by a team of capable and creative engineers; But they do get involved in things they are not familiar with and do not enjoy. This reduces the speed and quality of work progress and all the energy of this creative team is spent on things that are unprofessional and boring for them. Even if the team is lucky and reaches the mass production stage late and tired, it may face two other bitter scenarios: (1) Large and experienced companies in mass production, get ideas from their product and produce similar products more quickly Offer a lower price to the market, and (2) when they are in mass production problems, another company can bring the next generation of product to market and attract customers. It should not be forgotten that the main advantage of these creative teams is their technical knowledge and ability to come up with ideas, and dealing with mass production and its problems take them away from their main advantage; But what can be done to solve this problem?

Familiarity with the experience of Soot Azin Company in this field can be instructive. In 1998, Soot Azin Company was established to manufacture and sell a new music product. This product was a new tuner that could identify and display a quarter of the screens produced by Iranian musical instruments. The first example of this product, which was launched in 1378, had a wooden and rudimentary body. In the second generation, the wooden body of the device, which was very problematic, was removed and replaced with plastic boxes and was offered for sale in 2002. But the demand for this product was increasing and the managers of this company, due to the increasing production problems, decided to leave the construction of the new generation of their product to a capable and experienced foreign company. For this reason, after evaluating the capabilities of several companies, they selected a Chinese company and concluded a manufacturing contract with it. The engineering capacity and experience of the manufacturing company was such that shortly after the initial agreement, mass production of the product began and was able to cover the entire needs of the Iranian market at low cost. As a result, the third generation of this innovative product was produced in 1983 and was marketed as an industrial product with all the necessary accessories. This product had a professional look and price. By outsourcing mass production, Soot Azin Company was able to pursue its research and innovative activities with more focus. As a result, since 2004, the company has been able to improve its innovative product many times and add more features to it. This continuity in innovation has caused the market of this local product to increase day by day in Iran. Recently, the company has been able to target the large market of Turkey by designing and manufacturing special samples of this product in accordance with Turkish music, and to extend the market of its products beyond the borders of Iran. A closer look at this successful experience shows that some companies’ trump card is innovation. With its right decision to outsource production, the company gained several advantages at the same time: 1. Outsourcing production and avoiding its small and large problems caused the company to focus on its research and innovative activities and increase their depth; 2- Outsourcing the production and relying on the high power and engineering experience of the partner company caused the speed of bringing new ideas to the market to increase greatly; 3- This could reduce costs and consequently the price of the product; 4- This company was able to convert the initial heavy investment in the production line into a variable cost and in this way increase its flexibility; In such a way that whenever he wants, he orders the production of a new generation of product to the partner companies.