What is Contract Manufacturing?

Contract manufacturing is an outsourcing strategy where one provider will construct goods for multiple firms. The design of these products can come from the provider or the client. When someone is looking for a manufacturing agreement, they will approach various contract manufacturers. Then, the providers will quote bids on the costs based on labor, tooling, and material costs.

After the bidding process, the client selects their contract manufacturer or CM. The CM will produce and ship products in the place of the hiring firm. This process is performed across many different industries, including medical, technology, automotive, and defense fields. Remington Medical is a medical device CM.

 

Advantages of Contract Manufacturing

  • Cost-Effective: Companies that use this type of outsourcing can benefit from working with a partner that already has expertise. Knowledge of the manufacturing process and the right equipment means that the provider can produce products faster and with lower overhead.

 

  • A Closer Focus: The client or company that hires these services will have more time to put towards their core competencies. They will have more time for the marketing and selling of their products. Freeing up these resources will allow you to reach out to new markets and people you might not have reached otherwise. Some might say that giving up manufacturer control is a risk. However, that is not true if you hire the right partner. When you are working with a quality provider, you will not have to worry about the details of the design process. With a partner like Remington Medical, your job will only get more comfortable.

 

  • Distribution: If you find a provider that can directly ship to your customers, then you’ve gained a whole new edge. This cost saving benefits will allow for more freedom in your own supply chain. Your provider might even offer connections to new customers for your business.

 

  • Scalability: Every business is looking for ways to grow. With contract manufacturing, you have access to services that can be scaled up or down to fit your needs. You won’t miss out on opportunities because of a lack of supply to meet demand. Outsourcing this part of your business opens up venues to an all new labor force.

 

What to Look for in a Contract Manufacturer

There are many different types of contract manufacturing. Before making a selection, you need to make sure that they share your goals and your dedication to quality. There are several things to look for in a CM provider and many questions to ask.

  • Is their facility clean and well-managed?
  • Is their manufacturing standard ISO-certified?
  • Do they have the ability to be flexible with the changes in the marketplace?
  • Can their supply chain management keep up with your demand?
  • Do they have precautions in place for confidential information?
  • Do they have a strong history of performance?
  • Do they have innovative solutions that will carry your company into the future?

 

Working with a contract manufacturing company has many advantages that can benefit small or large companies. You should look into all of these aspects before entering into a contract with any manufacturing facility. The quality of the finished goods must always be weighed against the profit margin. In the best case, you will find a provider that can deliver complete solutions at competitive prices.