Simple vs. Multi-Level Products

So what’s the difference?

A Simple product is one that is manufactured completely with a single manufacturer. A Multi-Level product is one in which we must outsource one or more component parts to additional suppliers and coordinate delivery and assembly with a primary assembler. There’s a lot more work involved with that. In some cases the primary assembler is one of the main part suppliers. In other cases it may be a totally separate company.

Why would you outsource components to different suppliers instead of having a single manufacturer do it all?

Sometimes the parts available by a supplier just aren’t good enough and the supplier either 1) does not want to source a different part or 2) cannot find the part you need. Another very important reason is we often split up manufacturing to mitigate intellectual property theft. This works because it reduces the amount of information and control being all in one particular supplier’s hands.