An insider’s guide to selecting the right contract manufacturing company

Looking for a contract manufacturing company to work with is like searching for a business partner that can make or break your business. If you find the right one, you could gain significant synergies from working together. Making the wrong choice however, could not only jeopardize your short-term operations, but can do significant damage to your reputation as well.

Selecting the right partner to work with requires patients and a methodical approach.  

What to Look For?

The more complex your manufacturing, packaging and distribution business processes are, the more discerning you need to be when selecting your manufacturing contractor of choice. Here are four critical factors that are worth considering:

Expertise

Your clients are look for experts when they shop for a product or service provider – so why shouldn’t you? When it comes to contract manufacturing expertise, look not just at the number of years but also for diversity of that expertise. A company that just has a wide range of kitting expertise may not necessarily be a good fit if you are looking for Packaging, Assembly and other value-added services as well.

Additionally, you need to evaluate other areas of expertise as well, such as Warehousing, Fulfillment, Inspection, Re-working, Labelling and more.

Experience

And that brings us to the second most important factor – Experience. Experience does not come from doing the same things repeatedly for 10 or 15 years. It is accumulated from working on a broad array of projects.

For instance, a contract manufacturing company with15 years’ experience working with electronic product manufacturers, will be far less valuable to you than someone with lesser experience (5 to 8 years) servicing clients across a broader manufacturing spectrum, such as the Sports Equipment, Consumer Goods and Toys and Gaming industries.

Certifications and Process Specialization

Each contract manufacturing company that you evaluate will have their own “methodology”. However, you must review their capabilities in terms of industry- recognized processes and practices.

Base your selection on specializations such as 6S, Lean manufacturing, and quality assurance specializations in programs such as GMP and ISO.

Facilities

If you are a forward-thinking organization, you may already have your vision set on expansion into other regions. Look for a contract manufacturer that has presences in more than just a single location, so they can support you in your vision. A partner that has a proven track-record of operating out of a broad geographic area, such as Illinois, South Carolina and Virginia, will be a more valuable partner than someone that operates just within – say, Michigan.

Other Considerations

The one mistake that most manufacturers make is picking up the phone and calling every contract manufacturer listed on a Google-search. Instead:

  • start with a self-evaluation of your needs, and rank them in terms of Must Have, Good to Have and Nice to Have
  • assess multiple contracting companies for the 4 critical factors discussed earlier, and rate them against your ranked needs
  • create your short-list based on those ratings, and enter negotiations with the final contenders

Never make pricing your first and only criteria. Companies that fail on quality, experience and specialization could easily low-ball their bids and end up partnering with you. And that’s something that quality-conscious organizations don’t need!