April 24, 2020

White Paper: Choosing the Right Contract Manufacturer

A lot of research is necessary to make the best decision on which contract manufacturer to use. Thorough research means choosing the right partner that will help make your business and process more productive and profitable.

By outsourcing to the best matched contract manufacturer for a project, substantial costs can be saved on such things as maintenance, tools, machinery, benefits, salary, inventory, and more. In addition, companies can leverage a contract manufacturers existing supply chain network and expertise which results in shorter lead times using less resources. By following the 10 steps below companies can proceed with confidence that the best contract manufacturer has been selected for their project.

1. Feasibility of Outsourcing

Assess the practicality of outsourcing both in the short and long-term. Look at all the data and information from experts to account for all elements, including timeline, budget, legal, and human- weighing the pros and cons.

2. Manufacturers Reputation

Research ratings of the contract manufacturer from the FDA, Better Business Bureau, and other reputable agencies. There are many government, commercial, and nonprofit websites that address the legal and compliance history of many manufacturers.

3. Project Experience

Focus on looking for a contract manufacturer that specializes in the types of goods and materials required for the project. In addition, a company experienced in the special application or technology needed is important.

4. Capacity

Ensure that the outsource partner has the resources, capabilities, and capacity to handle the project size and demands.

5. Additional General Expenses

As part of the initial feasibility study and other analyses, consider the other general costs that may come with outsourcing to a contract manufacturer. These can include shipping, regulations and compliance, contract fees, packaging, and more. If these costs are lower than increasing labor and utilities in-house than outsourcing is probably the best answer.

6. Communication is Key

Clear communication of planning, instructions, and initiatives is mandatory for success during every step of the process— from beginning to end. Communication should be expected to be not only verbal, but in formal, written documentation for each party.

7. Expectations & Requirements

Trust and follow-through are paramount in these types of partnerships . Therefore, project expectations and requirements need to be formally written and include such things such as objectives, product creation process, turn-around time, materials, shipping, party responsibilities, and any other scope of project details for the final deliverables.

8. Calls & Site Visits

Schedule initial introductory calls with each contract manufacturing business being considered and discuss such things as services, products, and expectations. In addition, schedule a follow-up, on-site visit.

9. Score Each Manufacturer

Review steps 1-8 above and create a numeric rating for each of their services, as well as impressions and other information.

10. Select the Best Company

The final selection of a contract manufacturer should be made based on the measurable steps above, along with things such as reputation, experience, and personal interactions with the company.

By completing the above steps, a company can be confident that they are choosing the right contract manufacturer for their project that will successfully provide improved profitability and lower operating costs with less resources in the most efficient way.

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