25 February 2021

The advantages of industrial subcontracting

Smart business leaders are always looking for innovative ways to streamline operations and improve performance. While manufacturing needs can often be met with in-house capacity, outsourcing certain processes can have benefits far beyond lowering direct costs.

Production Capacity

Growing companies are often faced with a lack of equipment, a shortage of skilled labour and space limitations, hindering their ability to take advantage of urgent or unexpected market opportunities.  Customers simply won’t wait for a supplier to add capacity and they will quickly look elsewhere to meet their demand.  For companies with seasonal products or unanticipated spikes in demand, outsourcing can provide an efficient solution without adding overhead or tying up resources that could be better deployed elsewhere.

QTG can augment existing in-house manufacturing capacity, making it easy to capitalize on opportunities when they arise, and reduce the risk of idle capacity when markets are slow.

Hiring, training and retaining skilled employees is extremely challenging.  Bringing on a new employee can take months and cost thousands of dollars.  With over 92 years of experience in the steel industry, we have built an impressive team capable of delivering challenging projects with short lead times.  With decades of experience, we are also able to share our manufacturing expertise with our partners, leading to innovative improvements in product design and process efficiency.

Specialized Equipment

QTG has invested in state-of-the-art equipment dedicated to tubular fabrication, allowing our partners to take advantage of cutting-edge manufacturing processes without major capital expenses.

Tubular components are often small but important parts of larger finished products. It may be more cost-effective for QTG to produce your parts in an environment dedicated to tubular fabrication than with in-house manufacturing capacity that could be better used for other activities.  Efficient laser cutting, bending, painting, welding and assembly of tubular products requires large and expensive equipment that is only justified by significant volume.  When done in small batches or on inefficient equipment, costs per part skyrocket and can cause bottlenecks in the production chain. Outsourcing these products can have a positive effect on the efficiency of other in-house manufacturing activities by reducing both costs and delays.

Cash and Inventory Management

Reducing finished inventory and work-in-progress with just-in-time delivery of finished or semi-finished parts can have enormous benefits to a company’s cashflow.  Inventory reductions free up cash for reinvestment in growth, improve financial ratios and increase profitability.  When manufacturing in-house, the clock starts ticking on accounts payable the moment raw materials are delivered.  By outsourcing fabrication, raw materials can be purchased and transformed by the manufacturer, reducing the operating cash cycle by days or weeks.  QTG offers stocking programs to further reduce the WIP our clients must keep on hand.  The cash that would have been tied up in inventory is now available to invest in marketing, R&D, operating expenses, or other growth-focused projects.

Each company must determine which services and activities add the most value for their clients focus on delivering industry leading results.  At QTG, our focus on tubular fabrication allows us to service the needs of a diverse array of clients across various industries, allowing them to do what they do best.  With partners specializing in everything from distribution, product development, and marketing to franchising, mass manufacturing or custom manufacturing of large and complex finished products, our clients are as unique as our solutions.  Our core mission is to help our communities grow and prosper.  Its why we exist and it is at the heart of everything we do.  We believe that by providing our partners with a reliable and cost-effective manufacturing partner we can support their continued success and contribute to sustaining a healthy North American manufacturing sector.  With industry expertise and state-of the-art equipment available for your next project, you don’t need to look overseas to find manufacturing solutions for all your tubular components.

Thanks to our expertise in the industrial sector and our state-of-the-art equipment, you won’t have to look far to find manufacturing solutions for all your tubular components.