With fossil fuels and other non-renewable energy sources becoming increasingly depleted, we have seen demand for renewable energy skyrocket throughout the 21st century. This growing demand for environmentally friendly energy is having unforeseen consequences on the supply chains of companies in the renewable energy sector. For example, there is increasing pressure on the supply of critical materials required in the production of renewable energy infrastructure, many of which are sourced from abroad, as more companies and technologies flood the market. In addition to this, there is an increased risk of regulatory standards being compromised across a highly fragmented, cross-border supply chain like this.
These types of supply chain bottlenecks are influencing companies in the energy sector to rethink their supply chains in hope of minimizing delays and disruptions with getting their technology to market. One way to address this changing landscape is to re-shore and consolidate supply chain operations domestically in the United States, but even this option won’t be sufficient in mitigating these supply chain risks. Companies in the renewable energy sector may have to go as far as outsourcing their new renewable energy technology to a full-service contract manufacturer.
Advantages of Outsourcing to a Renewable Energy Contract Manufacturer
There are many reasons to outsource your manufacturing to a renewable energy contract manufacturer. Contract manufacturing can help your company focus on what you are best at, without the burden of purchasing expensive machinery and capital equipment, hiring production staff, or investing in specialized industry knowledge.
Focus on Core Competencies:
If you are a company in the business of renewable energy technology, we can probably assume that your core competency lies in your industry knowledge and expertise, not in your manufacturing operations. This is an important realization for a company like yours to make because it helps you understand what resources you need to put where and ensures that your energy is going into those tasks that are going to get your new product to market the quickest.
Ask yourself, do you really want your high paid engineers from MIT or Stanford chasing down parts from the machine shop around the corner? Outsourcing your manufacturing operations can help to free up your existing manpower, allowing your engineers to invest 100% of their time and talent in the most productive and profitable work, doing the stuff that your company does best, whether that be sales, marketing, or another business function.
Save Your Time & Resources:
The initial investment required for renewable power manufacturing plants is significant. Apart from this, you will also have to make considerable investments in the research and development department.
Energy contract manufacturers already possess the knowledge and expertise needed to manufacture your new renewable energy technology, in addition to having all the appropriate capital equipment to do so. Odds are, they have also built similar products in their facilities in the past, so partnering with these CMs can help you take advantage of economies of scale and cost savings.
In addition to this, full-service energy contract manufacturers often utilize the practice of DFMA, or Design for Manufacturing and Assembly, which translates into a higher quality product that is optimized so that the complete design is quicker and cheaper to manufacture and get to market.
More Manageable Supply Chain:
Many renewable energy companies find themselves having to source from multiple different suppliers based in far reaches of the globe. This results in a complex, highly fragmented supply chain, which can quickly become hard to manage.
By outsourcing to an energy contract manufacturer, you not only gain access to a network of qualified suppliers, but you also gain access to a team of program managers who handle all the leg work for you and whose main priority is leading your project to success.
What Will a Qualified Energy Contract Manufacturer Offer?
Contract manufacturing for companies in the renewable energy industry can make bringing new technology to the market much easier, less expensive, and more efficient. But outsourcing your equipment build can still fail if you are not careful about it. There are certain services and capabilities that are key in finding the right energy contract manufacturer, such as:
New Product Introduction (NPI)
Unfortunately, many energy contract manufacturers don’t have a comprehensive line-up of services that will help get your equipment to market faster. Most CMs only offer one-off parts and services that don’t really add any value to your supply chain other than making it more clunky and complicated. And then all of the sudden, you find yourself dealing with a dozen different suppliers who are all on different pages of the book. This can be devastating to the outcome of your project.
Unlike many contract manufacturers, PEKO offers a program called NPI, or New Product Introduction, that is responsible for onboarding customers who are still in the early design phase of their renewable energy project.
PEKO’s NPI department is ready to take on any design challenge to make sure that your product is feasible and repeatable in production. Beyond design assistance, PEKO’s NPI department will also make sure that your design is actually manufacturable (also known as design for manufacturability, or DFM), and that it has the proper planning in place for when the product actually goes to market.
In traditional business structures, a single project can be passed between the hands of nearly every department, making the burden of responsibility and project success a sore topic.
By joining forces with an energy contract manufacturing partner, like PEKO, you will be assigned a program manager who will become your main point of contact for all things involving the project and its success. This program manager is trained to be an extension of your very own manufacturing sequence and will serve as the designated point of contact for any questions or concerns that might arise.
With PEKO’s comprehensive program management services, you will benefit from several things, such as:
- Having a single point of contact for all quality, purchasing, and manufacturing issues
- Bridging the gap between your technical team and ours
- Getting extremely fast responses
- Removing the headache of tracking down product or making changes
- Getting personalized service from an expert you can trust
- Defining success and having a PEKO manufacturing expert to achieve it
Supply Chain Management
The energy contract manufacturer that you choose to manufacture your renewable energy project will most likely have similar renewable energy projects and experience under their belt. The benefit of this is that CMs, like PEKO, have a comprehensive supplier network that they can leverage in order to get you the best pricing, the shortest lead times, and the most reliable stocking options, all while reducing the headache of doing this on your own.
Whether it’s a single CNC machined part, or a thousand-line BOM for a complex machinery series, PEKO’s integrated supply chain can manage the task. The supply chain team at PEKO is beneficial for your renewable energy project because it:
- Reacts to material fluctuations
- Leverages material buys for lower pricing
- Identifies long lead items to ensure build schedule performance
- Relieves customer supply chain from low-level purchases tasks
- Ensures BOM items are current and available
- Expedites orders based on your fluctuating demand
PEKO’s energy contract manufacturing services and capabilities can prove beneficial to your new renewable energy project by mitigating the risks associated with complex supply chains and unpredictable disruptions and allowing your team to regain focus on its core competency.
If you’re looking for a contract manufacturer for your next renewable energy project due to supply chain disruptions, download our guide to ensure you find the right partner for your project.