Contract Manufacturing:  Choosing The Right Way To Go

Finding the right manufacturer for your contract work is key to running a successful business. However, without knowing what to look for, selecting the best vendor can be challenging. You might think it would be easier if you knew all about manufacturing or if you could interview companies until you found the one that was perfect for your needs – but not so fast! That’s not always possible and sometimes companies will only talk about themselves and their successes, instead of investigating why they were unsuccessful in their other partnerships.

This post will explore different contract manufacturing options and how to find a great fit for your company. It will highlight the benefits and challenges of each type of contract manufacturing and give you tips on how to select the right manufacturer for your needs.

Contract Manufacturing: A Short Description

Contract manufacturing is a type of outsourced or direct manufacturing that is involved in agreements between a company and a manufacturer (located in Bangladesh, China, India, or other country). The company has already decided what they need from their vendor – such as products that have already been produced or components being made. The contract manufacturer then performs the order for the company without prior contact with them. This is often done through an EDI (Electronic Data Interchange) process where data can be submitted using an online system like QuickBooks or eForms.

There are different types of contract manufacturing options available to companies. You might even decide on a mix of them for your particular niche. This includes:

Just-In-Time Contract Manufacturing : Instead of having your product series made in bulk and ordering a large quantity, you might consider only ordering when the product is needed. This way, you don’t have to pay for products that will sit on the shelf, gathering dust. Just-in-Time production provides efficiency by creating only as many parts as needed when they are needed – and that can be done based on past sales data, sales forecasts or other production criteria.

: Instead of having your product series made in bulk and ordering a large quantity, you might consider only ordering when the product is needed. This way, you don’t have to pay for products that will sit on the shelf, gathering dust. Just-in-Time production provides efficiency by creating only as many parts as needed when they are needed – and that can be done based on past sales data, sales forecasts or other production criteria. Build-to-Order : With this option, your company decides what product series they want to create and what components make up those products. This gives them control over the process from start to finish with an ability to customize orders instead of simply producing what was requested by a client.

: With this option, your company decides what product series they want to create and what components make up those products. This gives them control over the process from start to finish with an ability to customize orders instead of simply producing what was requested by a client. Design-to-Order : This is similar to Build-to-Order except that the company already has a product design complete for its parts and accessories. They can make any necessary adjustments before production and then go ahead with manufacturing based on their needs as determined by their design requirements.

: This is similar to Build-to-Order except that the company already has a product design complete for its parts and accessories. They can make any necessary adjustments before production and then go ahead with manufacturing based on their needs as determined by their design requirements. Production Process: With this option, you have a set of guidelines for the quality of your products and production time frame that you expect. You will then have a specific vendor to follow through with making that product and/or component for your business – which can provide a structured approach to quality control, cost and schedule.

Contract Manufacturing Options Benefits

You already know what you need from your contract manufacturer — they just need to do it! They are very familiar with the process, they know the equipment they want to use and they already have the equipment all set up. This is a way for them to grow their business and for you to get the best possible product for your company.

There are many steps in the process that contract manufacturers can take over, which allows you to focus on running your business. Whether it’s marketing, sales, customer service or something else, you have more time to put into areas that are related to your core business.

It helps with quality control because if you let the manufacturing team handle all of the production steps – they will make sure that each part is of optimal quality and meets your requirements before moving onto the next stage of production. Their development engineers will also double check everything before sending it through final assembly and then shipping it out to customers. This streamlining of the process will help you deliver your product to market faster.

You can also save money by having a contract manufacturer handle production, because they know how to run their equipment at a maximum efficiency setting and they know where to cut corners when it comes to cost savings. You can then add those savings into additional services or products that will sell better or offer more value for your customers. This is called a win-win situation!

Contract Manufacturing Options Challenges

The biggest challenge of contract manufacturing is that you really have no control over the outcome of the process (unless you go with build-to-order). You are essentially handing over your production process to someone else, which can be a little frightening because you don’t really know what they are doing with your product. However, the process is usually automated and there are quality management solutions in place.

If you don’t have enough information to create a design or engineering files (like CAD data) – this will probably cause you some problems with the manufacturing team. This is because they would need to create something from scratch, which is not always an easy task. Therefore, it is important that you provide high quality products and detailed instructions for them to follow, so things don’t get held up.

Another challenge is that you must be wary of possible suppliers that may not provide exactly what you want. You might want a certain color, which will cost more money – or something similar to the one they offer in their catalog. However, they might have something different just to throw you off and get more money out of you. This can be very risky because it is your company’s reputation on the line. Instead of offering the best price – they may try to use other means (like better quality control) to get more money from you.

The bottom line is that contract manufacturing options can save you time and money while also providing better quality products as compared with relying on someone else to do your production for you.

Conclusion

The decision to use a contract manufacturer depends on how involved you want to be with the process. You may want to hold your cards close to your chest and do it all yourself (which is a great way to stay in control), or you can outsource the entire process of making your product or component. There are several different options, so you need to do some research and make sure that the contract manufacturer you choose can actually meet your needs and deliver a quality product on time.

More Resources:

Contract Manufacturing Contracts in Minutes Overview Video showcases how some of the world’s largest companies are using BigCommerce’s online contract manufacturing platform.