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Selecting a Contract Manufacturing Partner

man welding metal
Your selection of—and ensuing relationship with—a contract manufacturing vendor for your business is one of the most critical choices you will make. Choosing the right contract manufacturing partner will be integral to your company’s efficiency, productivity, flexibility, and profitability—so choose wisely.

Following these recommendations will help ensure that you are approaching this decision strategically and setting the stage for your company to produce a high quality product that quickly garners high marks and a good reputation within the industry.

Get an Overview

Start by reviewing a directory of contract manufacturing partners. While these resources typically contain hundreds of partner listings—usually sorted by size, location, specialties, and industry experience—consulting them can give you an overview of what’s available. Use this resource to create a list of possibilities.

Capability

Create your short list of possible partners by comparing the capabilities of each. Pay particular attention to the services you know you will need and rank your short list accordingly.

Experience & Qualifications

Here’s where your evaluation gets critical. Begin to highlight the contract manufacturer by their experience and expertise in your industry. Are they certified to work in your industry? How well will each potential contract manufacturer be able to partner with you to determine the best path to market? Experience counts.

Compliance

Determine what each of your potential contract manufacturing partners does to ensure their regulatory compliance. Regulations vary by country and jurisdiction, so if your supply chain crosses borders, be sure you choose a manufacturing partner that knows and meets international compliance standards.

Capacity

How will your potential workload fit within the potential manufacturing partner’s client base? Will you be their largest or smallest client, or right in their wheelhouse? Being at either end of the spectrum presents different challenges and considerations. Ensure your manufacturing partner is equipped to handle either extreme.

Personnel

Manufacturing may rely on the processes of machining, forming, and assembling, but the foundation of a good operation is always the people. How well does leadership communicate? Does your team mesh well with theirs? What about the teams on the floor?

Equipment & Technology

Having the right tools for the job is key. Do your potential contract manufacturing partners have modern equipment and leading-edge technology? Be especially vigilant if the partner must purchase new equipment to complete a specialized manufacturing process for you. Who is responsible for paying for it and maintaining it, and who will pay to train its operators?

Location

Your partner might produce components in various locations, but be sure to ask where final assembly will take place. Is this location convenient to you and your team? Understand early on if the low price your potential partner is offering you results from outsourced assembly in Asia or Mexico.

Financial Stability

Do a risk assessment analysis to determine the financial solvency of any contract manufacturing partner. Analyze any factors that might lead to possible future disruptions.

Due Diligence

Choosing your contract manufacturing partner is so critical that you should leave nothing to chance. The final questions you need to ask before you make a selection vary by industry, but some examples of good questions to ask a potential contract manufacturing partner include:

• Can you demonstrate fair program renewals with past clients?
• Are the prices you’ve provided transparent, or are there any hidden costs or fees?
• Will we have a specific point of contact handling our project, and who will that be?
• What protections do you extend to our intellectual property?

When selecting a contract manufacturing partner, be thorough, be strategic, and assume nothing. However, once you have crafted a good relationship with a qualified contract manufacturing provider, give them a fair chance to become a key part of your company’s success. That means’ giving them the feedback they need to excel and grow your bottom line, but empowering them to do what they do best. If you’ve done your homework and chosen carefully, you will have built a solid foundation for a mutually beneficial relationship.