11 Ways OEM’s Ensure The Right Contract Manufacturer Partnership

Posted by Craig Zoberis

May 27, 2014 5:16:00 PM

contract manufacturer partnership Finding the best contract manufacturer for your business is one of the most important decisions when it comes to successfully bringing your products to market.

Choosing the right contract manufacturing service for your business is also one of the most challenging decisions you must make.

The following 11 questions (and answers) act as your comprehensive checklist to determine what type of contract manufacturer suits the unique needs of your business.

  1. Is the contract manufacturer operating with an open book?
    When researching contract-manufacturing companies, they should provide you with everything you need, upfront. Right from the start, the contract manufacturer should have no problem providing you with production processes, materials cost, direct labor costs, overhead costs and profits promptly and with confidence.
  2. Does the contract manufacturer have a quality program?
    Be sure the contract manufacturer you’re considering has a quality program in place, such as an ISO9001: 2008. Look for records that demonstrate the program’s robust abilities to provide accurate documentation, high-level reports and detailed test data.
  3. Is the contract manufacturer’s facility as organized as your plant?
    This might sound like your mother talking, but the organization of a contract manufacturer’s facility says a lot about their dedication to quality control measures. A clean, well-lit and well-organized facility also exemplifies the CM’s general capacity to handle the work in the professional manner you are paying for and deserve.
  4. Do you know if the contract manufacturer is in a sound financial situation?
    You want to ensure that your contract manufacturer is going to be in business for many years to come. Conduct an evaluation of a CM’s financial stability by getting a bank reference check, checking for UCC filings or even attaining their Dunn and Bradstreet Report.

    Don’t shy away from asking some hard questions, like how much they have reinvested in new equipment and workforce training over the past three years. Also, be sure they are diversified in many industries, in case one sector takes a nosedive.
  5. How vertical is the contract manufacturer?
    Evaluate all of the contract manufacturer’s in-house processes. Do they have in-house engineering? Do they provide final packaging and logistics? Do they offer VMI (Vendor Managed Inventory) services?

    Look at all of your businesses needs and ask if the contract manufacturing companies you are considering provide the services that meet your needs, while also tying them together in a cohesive, streamlined manner.
  6. Is the contract manufacturer’s corporate culture thriving?
    Evaluate the corporate culture of the contract manufacturer you are considering. Do you feel their employee relations are as good as or even better than your company’s? Do their employees look engaged? A facility that focuses on employee happiness and growth creates long tenures, which go hand-in-hand with expertly trained individuals.
  7. What is the right-sized contract manufacturer for your business?
    If you’re a small- to medium-sized OEM, you don’t want to use a contract manufacturer that’s too big. Larger contract manufacturing companies often have a difficult time servicing smaller accounts. This is true of most all businesses, but it’s nonetheless costly when you discover you aren’t getting what you need, when you need it.
  8. Does the contract manufacturer take steps to protect your IP?
    Your intellectual property is an extremely valuable asset to your business. You must ensure your contract manufacturer has secure data systems that are capable of protecting your IP from possible infringers.
  9. Does the CM have regular lean-manufacturing events on the production floor and in the front office?
    If your contract manufacturer is holding regular Kaizan events for both the workers on the factory floor and the managers in the front office, you are ensured they’re dedicated to continuous improvement of their process.
  10. Does the contract manufacturer dedicate a value stream manager to handle your account?
    To get the best service from your contract manufacturer, you need a dedicated point of contact other than the owner or a salesperson. You should be given an account manager to contact anytime you have questions or concerns.
  11. Does the contract manufacturer offer historical program renewals with other clients?
    If so, did prices increase year after year? If the prices increased, what was the cause?

There are a variety of aspects to outsourced manufacturing that have the potential to greatly affect your business OEM – both positively and (if they’re not providing all the services you need) negatively.

That's why you need to carefully consider of all the important factors dictating which contract manufacturer is the right fit for your business.

Ready to learn more about finding the right contract manufacturer for your business? Call me, Craig Zoberis, at 630-323-4115 or click on the button below to speak with a contract-manufacturing expert at Fusion OEM.

Learn About Legacy Product Manufacturing

Subscribe To Blog By Email


Latest Blog Posts