10 Things To Look For When Selecting A Contract Manufacturer
1. How Long Have They Been In Business – Longevity is a sign of strength. While their competitors have come in gone, the company that has managed to endure the test of time will most likely be a strong business partner.
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2. Where Is The Work Completed – Some companies are sending work overseas to be completed where labor is cheaper, thus they can charge a less expensive rate to the customer. If there is a problem with the print or if the supplier needs to substitute a part, transportation lead-time can cause your project delivery to be longer than you expect. Another issue that may occur is damage during the transport of the product due to moisture and vibration.
3. Does The Company Have High Turnover – If you are looking for a contract manufacturer, you are more than likely looking for a partner for both present and future business. Companies with low turnover tend to have seasoned technicians that have steep learning curves. Their error rates are dramatically low in comparison to newer technicians and they are able to complete the job with a quicker turnaround period, thus lowering the cost for your company.
4. Is There Engineering Support On Staff – You are a start up company working with emerging technology and you need a partner that will assist bringing a drawing or prototype into a workable or sellable product. An on-staff engineer will have the ability to reverse engineer, interpret and/or adapt your product where it falls short. In many cases, contract manufacturing firms are only able to build to print. This additional support is invaluable.
5. Is The Company Fiscally Healthy – Your start up company just got its first contract. Your contract manufacturer needs to have the ability to access cash or lines of credit in order to purchase raw material to meet the needs of your company. A company that has its money tied up is unable to do this.
6. Location Location Location – Are you able to drive to where the manufacturer is located? If so, can you stop by whenever you wish? The location is important because the facility should be looked upon as an extension of your supply chain. Nothing should be hidden from you and the ability to see what is going on with your project should never be an issue.
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7. Certifications – Is the company UL certified? Are the MIL-I-45208 certified? ISO9001:2008? Does your end client have specifications that the product have certain certifications? Is it a Federal contract that mandates MBE or Veteran Owned-Business participation?
8. Flexibility – Can the manufacturer work with customer supplied components? Do they have the ability to source components? Can they work with a combination? You may think that you will save money by buying the parts yourself rather than having the manufacturer mark them up on the back-end, however most established contract manufacturers are able to purchase components at a discount. Even with mark up, the final cost to the customer is usually less than the MSRP. By allowing the contract manufacturer to take care of this detail you free yourself of the time, money and frustration of doing all yourself.
9. Nimble – Is the contract manufacturer able to quickly respond to changes in production demand and/or design changes? Does their system allow for ECN control and implementation? Avoid costly mistakes by checking into the systems that are in place at the manufacturer.
10. Capacity – Does the contract manufacturer have sufficient floor space and staff to accommodate dramatic increases in production? If your product line suddenly takes off in the marketplace, your contract manufacturer must have the ability to meet the demand.
James T. Wallace, SR is the President and CEO of Electro Soft, Incorporated, an ISO 9001:2000 Certified Electrical and Mechanical Contract Manufacturer. He has over 35 years experience in Engineering and Manufacturing and is a retired Chief of the United States Air Force Reserve.
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