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Category: Design & Fabrication

How Outsourcing Panel Fabrication Improves Supply Chain Resilience

Posted on by Kyle Davis

In today’s global marketplace, supply chains face constant pressure from material delays, price swings, component shortages, and regulatory hold ups. For companies that build their own panels in house, these disruptions can be costly and unpredictable. Outsourcing panel fabrication provides a strong buffer against many of these risks. It is more than just shifting work off your plate. It is about building resilience so your operations keep moving when challenges arise.

Here’s how outsourcing panel fabrication strengthens supply chains and what to look for in a partner.

How Outsourcing Builds Resilience

Outsourcing isn’t just a way to cut costs or free up internal labor. It is a strategy that strengthens every layer of the supply chain. By working with a trusted fabrication partner, companies gain access to supplier networks, inventory buffers, and compliance systems that would be expensive and time consuming to build on their own. According to Deloitte, nearly 80% of supply chain executives say their organizations have experienced an adverse supply chain event within the last 12 months

1. Diverse Supplier Network and Redundancy

Established panel fabricators usually maintain relationships with multiple suppliers. They have alternative sources for switches, relays, enclosures, and connectors. If one supplier is backlogged, another can step in. That redundancy means fewer production delays. Manufacturers today are actively diversifying suppliers to reduce exposure to disruptions such as natural disasters, political conflict, or transport bottlenecks.

2. Inventory Buffer and Demand Forecasting

Outsourcing partners often keep safety stock of high risk components. They anticipate demand and maintain inventory buffers so small delays do not stall entire projects. Many use advanced forecasting tools such as ERP systems, supplier dashboards, and analytics platforms. These tools give better visibility into pricing, availability, and lead times.

3. Scale Economies and Local Options

Panel fabricators buy in larger volumes and negotiate stronger supplier terms than smaller in house teams. That scale leads to better pricing and steadier supply. Some also offer local or near shore facilities. This shortens transit times, reduces customs issues, and avoids international shipping risks. More manufacturers are now exploring near shoring as a way to build stronger and more reliable supply chains.

4. Regulatory and Compliance Expertise

Compliance is a constant challenge. Outsourcing partners typically carry UL, CE, and other certifications and maintain documented quality systems. They have calibrated test equipment and trained staff who stay current on evolving regulations. This shifts compliance risk away from your internal team and keeps projects on track.

5. Flexibility to Scale and Pivot

When demand spikes or a shipment fails, outsourced panel shops can flex capacity. They may already have skilled staff, equipment, and backup material sources in place. This agility allows them to adjust fabrication sequences, approve substitute parts, or increase output without stalling delivery schedules.

What to Look for in an Outsourcing Partner

Outsourcing improves resilience only if you choose the right partner. Consider these factors:

  • Supplier transparency. Ask about sourcing strategies and backup suppliers.
  • Certifications and quality systems. Confirm UL, CE, or industry specific compliance.
  • Inventory policies. Clarify who carries safety stock and how substitutions are handled.
  • Location. Local or near shore facilities reduce shipping risk and improve responsiveness.
  • Contract flexibility. Ensure agreements cover delays, price adjustments, and design changes.

Real World Examples

  • A manufacturer sourcing relays from a single vendor faced six week lead times when supply tightened. Their outsourced fabricator had alternate suppliers and cut that to three weeks, keeping lines running.
  • Another firm lost access to a critical enclosure provider during a production shutdown. Their outsourcing partner had stock on hand and delivered panels without interruption.

Final Thoughts

Outsourcing panel fabrication is not giving up control. It is gaining resilience. A reliable partner brings supplier diversity, compliance expertise, forecasting tools, and flexible capacity that shield your business from disruption.

If your company is weighing in house fabrication against outsourcing, consider not only today’s costs but also the risks of tomorrow. The decision that appears more expensive on paper may be the one that saves you when supply chain challenges strike.

Start Building Resilience

The Hidden Cost of Running an In-House Panel Shop

Posted on by Kyle Davis

On the surface, building your own control panels inside your facility feels like a smart move. You get direct oversight, you keep schedules tight, and you reduce dependency on outside vendors. For some companies, that looks like savings. But when you dig into the details, the reality is more complex. Running an in-house panel shop carries a range of hidden costs that can quickly erase any advantage if they are not carefully managed.

Let’s break down where these costs come from and what they mean for your business.

Engineering and Design Time

One of the first costs that companies underestimate is engineering time. Each panel requires detailed schematics, layouts, bills of material, wire schedules, and compliance checks. If requirements shift during the build, you are dealing with engineering change orders that add more hours and more frustration.

Another issue is standardization. If every panel is treated like a unique design, engineers are repeating the same work again and again. Without a library of standard layouts and components, the workload grows quickly and efficiency disappears.

Compliance and Certification

Keeping up with regulations is no small task. UL 508A, NEC, CE, and other standards require specific components, certified wiring, and documented testing. An in-house shop must invest in calibrated testing tools, inspection equipment, and ongoing certification fees. On top of that, detailed documentation has to be maintained for traceability. That is time consuming and often overlooked when people assume in-house work is cheaper.

Material and Component Challenges

High quality panels need industrial grade parts. Enclosures must handle heat, dust, or moisture. PLCs, relays, breakers, and terminals are not inexpensive. And suppliers often have long lead times or minimum order requirements that tie up capital in inventory.

There is also the problem of waste and scrap. Miswired assemblies, poorly routed cables, or damaged components can lead to costly rework. The cost of poor quality includes not only materials but also downtime, service calls, and reputational risk.

Labor and Skills

Building panels is labor intensive and requires highly skilled technicians. Precision wiring, labeling, torqueing, and device integration all demand expertise. If you do not have enough qualified staff, you face overtime costs or expensive contractors. If you rush inexperienced employees into panel builds, you invite mistakes that show up later in the field.

Testing and debugging are another major cost. Panels need to be powered, cycled, and verified before shipment. That requires specialized equipment, bench space, and trained staff who can identify problems quickly.

Overhead Costs

The shop itself carries ongoing costs. Floor space, lighting, HVAC, compressed air, and tool maintenance all add up. Wire crimpers, label printers, and test gear need calibration and eventual replacement. These costs are rarely calculated up front, but they are real and constant.

Inventory is another overhead. Stocking a wide variety of connectors, relays, and enclosures ties up cash. Parts may become obsolete before they are used. Tracking and managing all of that inventory requires systems and staff time.

Long Term Maintenance

The cost of a panel doesn’t end when it leaves the shop. Over time, panels require upgrades, firmware updates, and replacement components. If the design left no room for future expansion, an upgrade may require tearing out and replacing entire sections. Without consistent standards, each panel becomes a one-off project with its own set of headaches.

Opportunity Costs

One of the least visible but most important costs is opportunity. Every hour your engineering team spends reworking schematics or testing enclosures is an hour they are not spending on higher value projects. Internal resources devoted to panel building cannot focus on process improvements, system integration, or customer solutions that grow the business.

Why Outsourcing Can Save Money

This is why many companies turn to specialized panel builders. Outsourcing provides access to economies of scale, established supplier relationships, and certified processes. These shops already have UL certifications, quality systems, and standardized designs that reduce cost and risk. Outsourcing also provides flexible capacity so you are not maintaining full time staff and equipment during slower periods.

Making In-House Work

To be fair, there are times when an in-house panel shop makes sense. If your volumes are high, your demand is predictable, and your designs are core to your intellectual property, internal control can be a strategic advantage. But even in those situations, success depends on strong standardization, investment in quality tools, and highly trained staff. Without those, hidden costs will continue to erode the benefits.

Final Thoughts

Running an in-house panel shop is not just about the price of parts and labor. It is about the full lifecycle of design, compliance, testing, documentation, inventory, and maintenance. When companies fail to account for those hidden costs, the in-house option often turns out to be more expensive than outsourcing.

The smart move is to evaluate the total cost of ownership before making a decision. If your business is considering the balance between in-house and outsourced panel building, weigh the unseen costs carefully. The lowest cost option is not always the one that looks cheapest on paper.

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