The “Do we manufacture in-house or outsource to a 3rd party” question is an age-old business decision that is certainly not specific to the custom closet industry. Just do a Google search on “in-house manufacturing vs. outsourcing” and you will get an ocean of great advice from leading publications like the Wall Street Journal. In today’s global economy, more and more companies, both small and large, are faced with the “in-house manufacturing vs. outsourcing” dilemma. There are simply more options available to corporate policy makers these days which is a good thing.
For Closet Tec, the “in-house or outsource” decision primarily boils down to these two prevailing questions:
- First, if we manufacture in-house, can we be world-class at it?
- Second, can it be done profitably?
If the answers to both those questions are “YES,” then we make the financial investment to manufacture in-house. Otherwise, Closet Tec structures alliances with strategic partners that are world-class at what they do. Many have told us that’s an overly simplistic approach to the problem. They are correct, it is simple. But, it is one that has served us well over the course of the past ten years.
Today, Closet Tec is one of the few custom closet companies in the Gulf Coast area that manufactures the majority of our product in-house. We have made a large investment not only in capital equipment, but also in personnel and real estate. Manufacturing in-house is not an inexpensive proposition. However, it does provide a tremendous amount of value to both the company and most importantly to our customers. More on that in my next post.
About the Author
Vice President of Manufacturing, Closet Tec