Strategic outsourcing to gain a competitive edge

How industrial equipment and consumer electronics companies can gain a competitive edge

by Dennis Kirkpatrick
President, Lifestyle, Consumer Devices, and Core Industrial

Posted on
June 11, 2025

Blog Consumer Devices Industrial Leadership Insights

The evolution of outsourced manufacturing

Historically, outsourcing was focused on labor arbitrage and improved capital utilization. Companies, especially in telecom and consumer electronics, looked to contract manufacturers to avoid major capital investments in equipment and facilities and to relocate to countries that provide lower labor costs. In the beginning, these were transactional relationships, centered around basic assembly and fulfillment.

Over time, that model evolved. Today, businesses can outsource not just production, but also complex assembly, testing, packaging, logistics, and even supply chain management. The focus has shifted from isolated tasks to end-to-end efficiencies that span design, production, and delivery—creating value through operational agility and access to advanced capabilities.

Interestingly, different industries have adopted outsourcing at different speeds. In the consumer space, roughly 60% of production is outsourced, compared to just 20% in more regulated fields like healthcare. The key takeaway is this: while the benefits of outsourcing are universal, how and when you pursue an outsourcing strategy should align with your business priorities.

Seven key benefits of outsourcing on an increasingly complex global stage

Global markets today are volatile and complex. Companies must navigate shifting customer expectations, economic headwinds, geopolitics, regulatory changes, supply chain disruptions, and persistent labor shortages. Managing R&D and product innovation provides OEMs with true differentiation.

By outsourcing manufacturing, they can focus where it matters most while leveraging expert partners that bring scale, speed, and operational excellence.

Here are seven ways outsourcing can strengthen competitiveness:

1. Enhanced scalability and agility

Companies can rapidly scale production and improve agility by partnering with a manufacturer that presents a global network, commands deep regional knowledge, and offers a digitally enabled supply chain.

2. Access to advanced technology

Outsourcing partners invest in state-of-the-art manufacturing technologies across multiple industries, allowing businesses to leverage innovation without large capital expenditures strictly focused on their market segment.

3. Specialized manufacturing skills

Outsourcing allows companies to tap into the specialized skills needed to handle complex manufacturing processes.

4. Supply chain optimization

Global partners bring established networks that improve resilience, shorten lead times, lower cost, and reduce exposure to disruptions.

5. Variable cost structure

Strategic outsourcing enables businesses to shift from a fixed cost structure—where they must invest in and maintain their own factories—to a variable cost structure, where they can scale production up or down quickly. Instead of committing capital to building and operating a facility, companies can pay only for the manufacturing space and workforce they need.

6. Faster time to market

Speed matters. With an experienced partner, companies can get from concept to shelf more quickly and with fewer execution risks.

7. Focus on core competencies

By outsourcing production, teams can shift their attention to product innovation, customer experience, and market growth.

Manufacturing for enhanced flexibility and scale

At Flex, we look at advanced manufacturing in its broadest sense to give customers a distinct competitive advantage. Whether it’s industrial robotics or smart home devices, customers turn to us for the scale, quality, and speed needed to compete globally.

Energy technology companies offer a wide range of industrial products that support energy production, distribution, and consumption. These span renewable energy, fossil fuels, energy storage, smart grids, and energy efficiency solutions—all within a highly competitive market. Where competition is fierce, outsourcing can become a strategic advantage. This is the story of one such customer.

Case study: Accelerating time to market in new regions while improving manufacturing quality and reducing business risk

Solution:
To optimize production, Flex integrated solutions incorporating PCBA, custom plastics, custom metals, and automated product assembly and testing. We also deployed comprehensive supply chain services, including regionalized supply chains in Asia and North America, and forward logistics in the U.S., Europe, and China.

Throughout, Flex supported the customer with issues pertaining to taxes, regulatory and trade compliance, logistics, and account management to ensure long-term business success in every region.

Results:
By enhancing manufacturing flexibility and scalability with Flex, the company:

Expanded sales into 61 countries
Reduced production costs by 40%
Increased production volume by 500%
Improved quality and achieved a 99.7% product yield
Absorbed 25% quarterly demand swings with confidence
Increased its stock price by 3x

Outsourcing as a strategic lever

The decision to outsource should not be made solely on cost; it should be a strategic enabler. It’s about building resilience, scaling with precision, and accessing capabilities that would take years to build in-house.

Success depends on the right partner—one that invests in technology, prioritizes sustainability, and has the supply chain expertise to execute globally. With the right collaboration, companies can shift their focus from operations to strategy, bringing products to market faster, responding to change more easily, and unlocking new growth.

For any company evaluating outsourcing, the key takeaway is this: It’s not about giving up control—it’s about gaining strategic advantage. Learn how advanced manufacturing technologies can enhance competitiveness and drive growth today.