Bought in parts and components
Many products make use of bought in parts or components. If you were manufacturing computers you might be buying in hard drives or processors from other companies. If you are building cabinets you will probably be buying KD fittings or dowels from other manufacturers.
Advantages
- No Space needed for making component's
- Speeds up production
- Parts quality assured by manufacturer of parts to specified tolerances
- Specialist companies providing parts have specialist knowledge and are advantaged by economies of scale
- Ability to change suppliers if quality or service drops (Price negotiation possible)
- Reduces storage costs (JIT)