It’s not uncommon for companies large and small to turn to third parties for help with their production line. Like any resource, though, making effective use of a contract manufacturer depends on your circumstances and your capacity for building a strong relationship. When looking for a potential manufacturing partner, keep the following in mind.
Establish What You Need
Do you need another business to mass fabricate components for your product? Are you in need of replacement parts milling on demand? Do you intend to pass the entire manufacturing process off to someone else while you focus on marketing and sales? The extent of manufacturing that you need is a major deciding factor in who you should partner with. A high-volume plant likely does not have the capacity to make bespoke components that aren’t common in the industry, and a small machine shop won’t be able to supply you for a global market.
Consider Costs
Many businesses outsource manufacturing, either domestic or overseas, to save on labor costs, as well as the costs of purchasing and maintaining the necessary equipment and facilities. However, outsourcing is not without its own costs, and these costs don’t always manifest financially. Shipping logistics for materials and parts must be considered, as well as the fact that you’re ceding some control over the production line. If you outsource to a manufacturer overseas, you need to know relevant legislation in that nation and how it may impact your business.
Keep Communication Open
Maintaining visibility and transparency with your supply chain is always important, and it becomes especially so when the facility isn’t under your management. This entails both contacting the manufacturer with questions, concerns and new orders and listening to feedback and suggestions regarding the partnership. When sudden changes emerge—spikes in demand, product recalls, etc.—you need to be ready to work with your manufacturing partners to address it.
