It's More Expensive Than I Can Do It For In-House
Every once in a while we hear this. The question is, is it really?
How did you arrive at your internal cost?
Did you include:
- Supervision
- Heat, Light, & Power
- Real Estate Taxes
- Insurance
- Depreciation
- Support Personnel
- Fork Lift Drivers
- Did you require this department to make a profit (Your contract packager will need to)?
- An allocated cost for the space used to do it internally
Here are the two critical questions that often aren't asked
- Is this your core competency?
- What is your opportunity cost?
Most of our customers tell us that what we do for them is far removed from their core competencies, and that the opportunity cost associated with engaging in a non-core-competency project far outweighs the cost of having us do the project. They choose to allocate their space, people, and capital to higher payoff activities... which are their core competencies.
