The Most Profitable Products Require the Best Inputs

Stevensville, Md., October 22, 2014, by Jacob Prak–Today’s competitive environment demands that producers create the best products and services in the most efficient way possible. The most profitable companies are usually market leaders and provide their customers with the best value. Apple, Boeing and Costco are just a few examples of this truism among well-known, large companies.

When a company like Apple or Boeing sets out to produce the next-generation smartphone or commercial jetliner, they assemble the best resources available for the task while making sure they invest most heavily in the work that they are uniquely competent to do. Apple, for example, recruits the very best engineers and scientists and builds the best research facilities in order to stay technically ahead of their competition. Other tasks, such as production, might be sourced to outside companies with the best preexisting abilities.

In either case, the search for the best is never limited to a single geographic area. The best is utilized wherever it might be found. Apple operates a huge research and development facility in Cupertino, California, in close proximity to where the best engineers are to be found, while producing most of their products in factories in China where the most cost-effective production facilities are located.

Most small companies do not have the resources of Apple or Boeing to apply to their product line, but neither are their tasks as complex. For these companies, the same principle applies, albeit on a smaller scale. An original equipment manufacturer (OEM) that serves a market with a simpler or more mature product will still want to create the best, highest-value product for their customers. As is the case with Apple, this producer will still need the best resources available; and also like Apple, they should not be bound by geographic limitations in their search.

A simpler or more mature product might not require the research and development spending that Apple needs to maintain its leadership position, but it is likely that a smaller producer will still require access to the best, most efficient production facilities the world has to offer. Finding these facilities, however, can be a daunting task:

1. The suppliers must be located.
2. They must be evaluated as to their suitability for the required task.
3. They must be managed so that they might become an integral part of the OEM’s production process.

For each successful supplier relationship, there will be many failures. This process is, therefore, quite wasteful.

To avoid this problem but still gain the efficiency of using the best production suppliers the world has to offer, OEMs can work with Michigan Manufacturing International (MMI). We have a ready-made supply chain that allows a manufacturer to instantly plug-in a sourcing solution. OEMs need not waste time or money searching for suppliers to match their requirements. Instead, they will be immediately ready to provide their customers with the highest-value products that naturally lead to a better market position and higher profits.

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