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Line Transfer: An Outsourcing Alternative
August 6, 2007

The strategic focus of your company is changing. Like many organizations, the shift is to concentrate on core competencies, lower costs, and to free-up resources. The challenge is to figure out how to accomplish a timely, long-term and smooth transition, all the while maintaining or increasing profitability and quality.

A line transfer may be your solution. This unique concept is really quite simple; your machine tools, technology, and overhead are transferred to a second-party facility to produce your parts. This solution recognizes that your existing manufacturing line has value: capital, technological and consistency. Because it is your machinery and your technology, there is no need to develop or redevelop a process. You know what to expect when the parts arrive, providing continuity for the rest of the production or assembly.

According to Flinchbaugh Engineering, the best candidates for this type of manufacturing line transfer are those companies which have aging equipment and capital constraints; have excess capacity on the line; have inflexible work rules and high labor costs; don’t or can’t implement lean tools; and don’t see manufacturing as a core competency. The best product candidates include those which are difficult to produce; larger parts with lower volumes; those forecast to have reduced sales; complex or expensive parts with higher failure risks; and those that are difficult to ship long distances.

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