Small businesses, entrepreneurs and startups haven’t had an easy time of it since the pandemic first hit back in 2020. Despite contributing to half of total business turnover and 60% of private sector employment, many of these enterprises have felt the full force of recent economic shockwaves, from economic difficulties to supply chain challenges.
On a brighter note, however, recent analysis from PwC reveals encouraging signs of resilience, with start-up failure rates now at their lowest level in a decade despite record company formations.
This has been achieved in part through clever adaptations, with many smaller businesses embracing flexible operational models and advanced technologies to navigate economic pressures. For manufacturing ventures specifically, the barriers remain substantial – manufacturers often require over £100,000 just to launch, with equipment costs alone reaching £125,000 depending on their complexity.
Against this backdrop, the option to subcontract plastic injection moulding is becoming even more viable, not least because it enables smaller companies to access world-class manufacturing capabilities without the overbearing capital requirements. And with 70% to 80% of all manufactured products now outsourced and outsourcing able to boost efficiency by up to 25%, SMEs and start-ups are increasingly discovering how such solutions can provide practical pathways to market entry.
Understanding subcontracted injection moulding
Subcontracted injection moulding means outsourcing your plastic component production to specialist manufacturers rather than doing it in-house. Instead of buying and setting up expensive machinery, tooling equipment and facilities, you pay for the production on a project-by-project basis.
Going in-house also means investing large sums in skilled personnel. Subcontracting, on the contrary, simply involves tapping into the skills and knowledge of expert partners while retaining design freedoms, production input, and – critically – product ownership.
What are the major merits for start-ups and SMEs?
Lower capital investment
Setting up a manufacturing operation is expensive, with more comprehensive facilities easily costing upwards of £200,000, depending on the processes required.
As discussed above, subcontracting is a financially viable alternative. By partnering with proven specialists in the plastic injection moulding field, firms can tap into state-of-the-art equipment, tools, technologies and facilities all managed by a wealth of knowledge without having to stomach the incredible costs that would come with purchasing these assets for in-house use. In this sense, it’s a way in which companies can keep their capital while still enhancing key product development activities.
The other benefits are that subcontracted manufacturing typically works on a per-project pricing basis, meaning that total costs will only increase as production volumes go up. It’s a flexible arrangement which can help provide that financial certainty to smaller companies that might have strict cashflows.
Access to expertise and technology
Plastic injection moulding needs to be overseen by technicians who have a deep understanding of materials science, process engineering and quality management. Here, subcontractors house decades of accumulated expertise which spans across multiple industries and applications which can be invaluable.
These supportive partners can help steer you away from common pitfalls and mistakes and towards proven methods and materials to ensure your success. Furthermore, they are also companies that will be keeping a keen finger on the pulse of industry innovations. If a new technology becomes available, chances are they’ll know about it – and, crucially, how to make use of it effectively. Some moulders even aid in the development of innovations or pioneer innovations themselves.
Faster product rollouts
Speed is also critical. Given that 42% of start-ups fail because they aren’t meeting a specific market need with their solutions, it’s important for small companies to be able to be adaptable, pivoting quickly to capture opportunities as and when they arise.
Here, partnering with experienced plastic injection moulders can again pay dividends. These are companies that have mastered the art of streamlined workflows and optimised production schedules. For their customers, that translates into incredibly short lead times compared to setting up and manufacturing products in house.
Rather than building the right relationships with the right suppliers from the ground up – a process that can take months, if not years – subcontractors already have these critical foundations in place, ready for you to leverage as you work to accelerate your product launches. In fast-moving spaces such as tech, where the first-mover advantage is clear, this is even more valuable.
Greater scalability
For many startups, the idea of predictable production patterns and demands is foreign. These are companies that are building their businesses, reacting to orders big and small, with major fluctuations month on month, week on week.
Market testing might need small batches to be created. Then, if those products gain traction, huge volumes of production may need to follow at speed, only for this to be scaled down again at a moments notice. It’s a fluctuation that many small firms are unable to manage by themselves.
Those SMEs and start-ups that decide to subcontract plastic injection moulding operations benefit from inherent scalability – this allows production volumes to fluctuate based on actual demand rather than be constrained by a facility’s fixed capacity. During growth phases, plastic injection moulders can rapidly increase output, while slower periods don’t leave expensive equipment underutilised.
This flexibility also applies to product variations and customisation requirements. Established providers can typically accommodate material specifications and finishing requirements without requiring new capital investment from their clients.
Focus on core business
Small businesses and startups typically also have limited personnel tasked with managing a variety of aspects of running the company. Here, outsourcing can be transformative. Without the burden of extensive plastic injection moulding operations to manage, firms and their employees are freed up to focus on higher value tasks that can effectively drive additional business development, value creation and improve efficiencies.
Regulatory alignment and compliance
At the same time, outsourcing also reduces compliance-related burdens, with partners tasked with delivering high quality products that meet the necessary requirements. Industries such as medical devices and electronics impose stringent quality requirements that demand sophisticated quality management systems and extensive documentation.
This is where OEM plastic parts production specialists come into their own. They’re businesses that have the necessary quality certifications, testing capabilities and well-established and continually refined frameworks that have been developed over decades. By subcontracting, small businesses can tap into these benefits without needing to navigate complex regulations on their own, which frequently require costly audits.
Selecting the right subcontractor for your business
Outsourcing partnerships hinge on several factors. SMEs and start-ups need partners which can demonstrate relevant industry experience, appropriate certifications and flexibility in working with smaller clients.
When choosing who to work with, consider criteria such as ISO quality certifications, technical support capabilities and responsiveness of communications.
Leveraging OGM’s expertise for sustainable growth
With over six decades of experience serving diverse industrial sectors, OGM provides subcontracted manufacturing solutions designed for growing businesses. Our facilities in Oxford and Wales house sophisticated injection moulding systems which are capable of handling a full range of projects – from initial prototypes through to high-volume production.
Our services include everything from designs support to guidance on materials and production scheduling that meet evolving requirements – something that’s naturally associated with emerging companies.
If you’re interested in outsourcing your plastic injection moulding activities to a reliable and proven subcontractor, contact OGM to explore how we can support your unique growth ambitions.