As an entrepreneur exploring the possibilities for manufacturing your new product, you may run into unfamiliar phrases from time to time, and “turnkey manufacturing” might be one of them. That nomenclature hasn’t really crossed over into the non-manufacturing world, so you may be wondering what it’s all about. So what is turnkey manufacturing?
Essentially, turnkey manufacturing means having every step of the full manufacturing process carried out by one supplier — meaning design, the actual manufacturing process and fulfillment, including delivery and setup. The “turnkey” of the process refers to your role: simply turning the proverbial “key” that gets your product up and running (in the case of manufacturing a new product, the “turnkey” aspect is more of a metaphor than for, say, new machinery).
It’s helpful for entrepreneurs to understand turnkey manufacturing, because the service can provide many benefits as you seek a supplier for your products.
All processes carried out by one supplier
Working with a turnkey manufacturer means that every single step of your product’s creation will occur under one roof. This covers aspects of manufacturing beyond just the actual product fabrication itself. With turnkey manufacturing, one supplier works on:
- • Design for manufacturability
- • Material selection
- • Tooling design and manufacture
- • Prototyping
- • The actual fabrication of your product
- • Secondary/finishing services
- • Assembly
- • Delivery
- • On-site setup, if needed
The value added by dealing with one main point of contact for all of these processes is not insignificant. While you may not have otherwise been dealing with nine vendors for each of those 10 bullet points, it’s likely that you’d be working with a minimum of three or four, and perhaps even more. That means more schedules to coordinate, more communication to enable, (probably) more personalities to manage, and just more moving parts in general. Turnkey manufacturing brings all of those pieces together to help things run much more smoothly — and frees time and resources for you to focus on managing your business.
Only one supplier to research and vet
It’s important to know as much as you can about potential suppliers and vendors:
- • What are their capabilities
- • What are their specialties?
- • How satisfied have past customers been?
- • Can they provide what they’re telling you they can provide?
- • Are they reputable?
With a turnkey manufacturer, you have more aspects of an individual supplier to look into – but you’re not multiplying that research across a number of different companies, each with unique ways of providing information. With a turnkey manufacturer, you need only look into one company, and it’s likely that the time you’ll save by doing so will enable you to do better research. That means greater peace of mind and the increased likelihood that you’re making the right choice.
No disconnect between design, prototyping and manufacturing
No one understands a company’s manufacturing capabilities, specialties, limitations and optimal usage than the company itself. Design engineers at a firm that also provides manufacturing services are expert in that company’s particular nuances, and will be able to design your product for the best quality and most efficient manufacturing process possible (even if you already have a design for your product — it’s likely that these engineers will need to modify it for the practicalities of the manufacturing process). Working with a separate design and/or prototyping firm means that you get a generic product design not specialized for any particular manufacturing facility — which means either more work and time spent by the manufacturer to optimize the product, or a potential decrease in quality and efficiency.
Less time spent on preliminary steps like material selection and sourcing
As an entrepreneur and product designer, it’s likely to be more difficult for you to locate production grade and quantity materials in a strategically beneficial way. It’s also likely not how you’d prefer to spend your time. Manufacturers offering turnkey service give you the benefit of their knowledge in this area: relationships with suppliers, expertise in material selection, and the ability to efficiently procure the materials you need through their existing supply chain. It’s much easier for you to gain the benefits of quantity discounts these ways, and you’ll also save on shipping costs since materials will be delivered directly to your manufacturer (or the manufacturer may even already have them on hand) — not to you or to a third-party vendor.
Less logistical work on your part
Coordinating materials, products and communication among a number of disparate parties can be a lot of work, and with a non-turnkey manufacturer, a lot of that responsibility will fall to you. You’ll need to worry about:
- • Scheduling and capacity differences for each facility you work with
- • Different material capabilities
- • The moving parts involved in shipping and shuttling materials, components, assembled pieces and finished products
- • Managing personalities
And so on. The more “movement” involved in your manufacturing process, the longer it will take — and the more expensive it will be. Turnkey manufacturing minimizes movement by keeping all of these processes under one roof, and either eliminating the above concerns, or handling them for you.
Potential cost savings
It bears repeating: time is money in manufacturing, and the core benefit of many of the points above is, at the end of the day, a lower overall cost in manufacturing your products. Lower shipping costs and lower material costs have been mentioned, and you’ll also need to worry less about:
- • Managing raw material inventory
- • Managing product inventory if the turnkey manufacturer handles that aspect – which many do
- • An easier path to volume discount (on overall work in addition to on raw materials) – package deals like turnkey manufacturing are often more desirable for the manufacturer than piecemeal work orders and jobs, so you may see cost benefits passed to you.
- • Devoting your own time – which could be spent on product development, sales or other tasks – to managing all the different aspects of the manufacturing process, aspects with which you are likely unfamiliar.
What’s more, turnkey manufacturers need to have expertise in each and every area of the manufacturing process — they would not offer full, end-to-end service if they didn’t. When you work with turnkey manufacturers, you can be confident that they worked hard in developing their company to be able to effectively provide those services.
