contract manufacturing is gaining importance

Do You Know How to Get the Most Out of Your Contract Manufacturer?

If your idea of extracting the most value out of your contract manufacturer is unleashing the purchasing department, you may want to rethink your approach.

By Michaela Neilson

The right contract manufacturer can be an invaluable business partner—building a good relationship can deliver value in many ways, from solving challenging technical problems to delivering rapid innovation. Evaluating your contract manufacturer on both being able to meet short-term needs and long-term needs may change your value equation.

Think about hiring a contract manufacturer the way you would think about hiring an employee. A good hire can do the current job but will also have the potential to grow with your business—you can think about your contract manufacturer the same way. What depth of knowledge and experience do they have that you currently don’t have internally?

Of course, the first step is to identify the right contract manufacturer. When interviewing a contract manufacturer, take a broad team for a site visit. Although this may involve more travel cost, if you are thinking long-term, it will worth the investment.  After all, you wouldn’t leave hiring an important employee to one person. Ideally, these are the team members who will be working with the contract manufacturer on a daily basis. After the site visit, poll your team. Does everyone have a sense of confidence that this company has the capabilities and will be easy to work with? If a problem arises, will you get the service you need? 

Think about your longer-term strategic product development needs. Does this contract manufacturer have any skills, capabilities or knowledge that could fit with these needs? Ideally, a good contract manufacturer will have a broad set of capabilities and expertise; this goes beyond having the right equipment. You may want to ask about which categories of products the current team has experience in producing. Do they have experience in adjacent categories that could also benefit your company? You might need blending today but if you need spray drying or granulating six months from now, can this contract manufacturer do it? How flexible are their packaging lines? Can they provide you with pilot sample quantities or short runs for a beta site test?  

As with any good interview, find out how they conceptualise the business partnership. How long have they worked with their longest clients? Do they perceive themselves as business partners? Ask them to discuss how they have helped other customers. How have they helped their customers? How have they solved a challenging problem for a customer? Have they provided proactive suggestions on how to improve a customer’s product or process? This information is invaluable in determining the right relationship for your business.

 

TAGS: Services
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