Effects that Product Assembly Have on Production Costs

One of the many challenges associated with manufacturing a new product is finding cost-effective methods of managing production. As demand for a product increases, businesses often explore alternative ways of getting products out the door fast, efficiently, and error-free.

Factors Affecting Production Costs
-Direct Materials
Maybe the most obvious component of manufacturing a product, direct materials includes all raw materials needed to make the finished product.

-Direct Labor
Direct labor costs include the cost to pay your workers who are responsible for each unit of production. Assembly workers are a good example of direct labor costs.

-Manufacturing Overhead
This includes any manufacturing cost that is neither materials nor labor costs. These can include indirect labor such as management and maintenance staff, indirect materials such as factory supplies, or other indirect manufacturing costs like rent, utilities, property tax.

Benefits of Product Assembly
-Specialization of Labor
The product assembly process employs an assembly line in which a sequence of workers and machines each perform a specific task that moves the product toward its finished form. This allows assembly workers and engineers to optimize each task within the sequence and as a result, overall production becomes more efficient and cost-effective.

-Lower Cost Per Unit
With production increases, a 3PL product assembly team reduces the direct labor cost of production. By reducing labor costs, the total cost of production goes down, thus, reducing the total cost per unit.

-Uniform Product
One additional benefit of assembly-line production is that the regimented process creates a very uniform finished product. These products are less likely to vary from each other and ensure all customers are getting the same high-quality products as expected.

Companies That Assemble Products for You
When looking to reduce the cost of production, it’s important to consider the services offered by an outsourced product assembly partner like QTC. QTC does not just source or manufacture parts. They have set up one assembly factory(32000ft²) in Ningbo City, China. QTC can source/manufacture part components from different suppliers, and then assemble your products in-house. That’s why they can ensure your project to be successful. In addition, the company’s sourcing team has more than 10 years of experience in metal, plastic, electronic parts. They can remove almost all shipping delays and reduce costs a lot.

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