Many companies — especially small ones — look to contract manufacturers to help complete a niche product which requires specific skills or tools or involves complex processes or materials. There are a lot of benefits to hiring a contract manufacturer to help develop your product or complete specialized processes for both one-off and recurring projects. For most companies who require ongoing services it’s often much more efficient to offload this part of the business.
Here’s some of the top contract manufacturing advantages:
Effective for Startups and Small Businesses
Small businesses and startups tend to glean the greatest advantages of contract manufacturing because often, the smaller guys just don’t have the extra resources to cover the material costs (such as raw materials), labor costs, and engineering expertise to handle the production process. Contract manufacturers allow smaller companies to remain competitive while staying within their budget.
Lower Costs & Maximize Profits
Because hiring a contract manufacturing company cuts overhead costs across several categories, companies often see a higher return on investment. Often, once a prototype has been developed finished prototype, all that company needs to do is find a good contract manufacturing partner to turn that prototype into a final product that can be produced again and again on a contract basis.
Many companies worry about intellectual property risks, but with a good contract manufacturing agreement in place, you can allay some of those fears… and depending on the type of product you need developed, this could mean a savings of hundreds of thousands of dollars.
No matter what industry you’re in, remaining agile means staying on top of the most recent development in technology and product offerings…which can be expensive and time-consuming to research and implement.
By hiring a leading contract manufacturer you get all the benefits of the latest in industry technology, without having to invest yourself. For example, rapid prototyping tools and CNC machining make the production process much faster than traditional manufacturing techniques, so products can hit the market faster.
High Quality Products
When you hire a contract manufacturer you’re adding an arsenal of contract producers who not only have the tools, but the core competencies to produce high quality products. With a skilled team on your side and advanced manufacturing tools your end product will undoubtedly be more functional and consistent to better meet customer’s demands.
Quickly Scale Production (Without Playing Middle Man)
For years, scaling quickly and efficiently has meant outsourcing producers overseas to low cost countries. This often means headaches when it comes to managing trade barriers, language barriers, market conditions, and demand fluctuation with an offshore partner.
Contract manufacturing partners can help bridge the gap when it comes to international suppliers because a good contract manufacturer will handle the quality control and international supply chain issues when it comes to outsourcing manufacturers overseas. As a result, you save time (and money) trying to vet and manage vendors by leveraging the relationships your contract manufacturer has already established.
Many delivery contract manufacturers offer end-to-end services, which means they’ll not only produce the part or product you need, but they’ll also complete other tasks, such as:
- Product design
- Material purchasing of specific components
- The manufacturing process (production)
- Assembly and packaging, and
- Shipping products
Depending on your industry and the product you need developed, keeping the entire process under one roof greatly reduces costs, coordination, and complexity.
By working with a contract manufacturing company you trust, you can rely on them to create a finished product while maintaining quality control, communication, and quality. A good contract manufacturing partner will have internal production oversight and QC teams in order to better oversee production activities. For example, if your product must satisfy ISO 9001 and CE regulations, a contract manufacturer can better help you meet these requirements. Additionally, the right partner will help manage unexpected costs by scaling production to meet seasonal decrease and tough competition throughout the year.
Keep in mind, with the right manufacturing company, your contract manufacturing agreement will also include clauses to guarantee levels consistency, accuracy and the quality of products over time… so you can contractually reduce potential risks from the get-go, enjoy direct control over the contractual line items as needed, and spend more time (and more focus) on other elements of your business.
About AP Precision
Founded in 1998, AP Precision was created to fill a need for metal products in order to meet the demands of their growing robotics company. Twenty-three years later, AP Precision has progressed to offer an array of contract manufacturing services in San Diego. Their founding principle is quite simple: to provide stable, long-term, precision metal fabrication for businesses of all sizes and shapes throughout Southern California.