Finding a contract manufacturer is an essential process if you’re looking to ensure you get a quality product in the market quickly. In order to choose the perfect manufacturing partner you should know the types in contract manufacturing are out there. The problem is that manufacturers offer a wide range of products and services that are difficult to classify. There’s a lack of consensus on the definition of what contract manufacturing entails and what criteria you should look for in a trustworthy manufacturer. With so many options it’s no wonder that business owners often feel confused and overwhelmed.
Selecting a contract manufacturer shouldn’t be stressful. In this thorough guide to the various kinds of contract manufacturing, we’ll clear many common misconceptions about the process and provide all the information you’ll need to take an informed choice.
The 3 Types of Contract Manufacturing You Should Know
Although every manufacturer provides various services There are three major ways to categorize all types of contract manufacturing:
Contract structure: There are different kinds of contract manufacturing agreements to choose from. This type of contract includes private label manufacturing contracts to manufacture individual components or parts, labor or service subcontracting and service contracts that end-to end.
Services, tools and materials Tools, services and materials manufacturers both provide private label manufacturing, their production process and types of tools or the materials they use could differ greatly. This has an impact on the quality of the products and the speed at which you bring products to market which is why it’s an important factor to be aware of.
Industries supported by contract manufacturing companies specialize in certain industries. It’s important to choose a manufacturer that understands the requirements of your clients and your business’s market and regulations.
Manufacturing agreementsWhen you review a contract manufacturer based on all three of these specific areas, you’ll find the most reliable manufacturer for your business. In the three comprehensive guides below, we’ll describe the factors you need to consider in each of the categories according to your product industry, and business structure.
Types of Manufacturing Agreements
An contract manufacturing agreement specifies exactly what the manufacturer will provide. There are many kinds of contract manufacturing agreements, however the four most commonly used types are:
Private label manufacturing Private label manufacturing contract manufacturer produces a finished product based on your specifications and then delivers it to your inventory warehouse or a store you prefer. If there are several components to be manufactured, the supplier typically puts them together before shipping. This is the most efficient option for companies who wish to make products with minimal effort.
Manufacturing of individual components Individual component manufacturing contract manufacturer is responsible for only producing one component or part of a more intricate finished product. Once the components are made, it’s your responsibility to build the finished product. This is the best choice for companies who handle certain aspects of production in-house, but require assistance in the production of certain components that they lack the resources or the knowledge to create. For example, if you need a complex metal part it’s best to hire a contract manufacturer that specializes in metalworking.
Subcontracting for labor or services It is similar to manufacturing individual components in that the manufacturer takes care of one part of the process, rather than offering a range of services. General contractors will employ an expert subcontractor to perform certain tasks that the company’s internal resources or staff do not provide. This is a good option if you have an extremely complex product or your contractor realizes that it can make parts faster or for a cheaper price by outsourcing a subcontractor.
End-to-end production: This is very similar to private label manufacturing, however, it differs in one very important way The manufacturer offers greater feedback on the product’s design. The manufacturer isn’t the sole one responsible for specifying how you want your product to appear or function. Instead, the manufacturer optimizes the product design for manufacturing and makes sure that every aspect is as efficient and cost-effective as is possible. It’s the perfect option for companies who want to quickly create the highest quality products at the lowest possible cost. Everything is handled by us from the design stage to the assembly stage and even shipping.
If you have relatively little knowledge with manufacturing, an end-to end agreement is the best choice. The manufacturer will provide you with an exact estimate of the services they provide and the associated costs prior to the contract signing so you know exactly what to expect before you sign the contract.
Types of Manufacturing Services, Tools, and Materials
If you’ve made a decision on what kind of contract manufacturing agreement you’d like to sign, it is important to look at potential suppliers based on the resources in-house they have. It’s not mandatory that the manufacturer has every tool, material or specialist on staff every moment of the day. You simply need to be sure that the supplier has the equipment or resources that you require to create the best quality model of the product, without major delays or unanticipated costs. These tools are among the most modern and versatile in the industry of manufacturing:
- CAD software
- CNC Machining with CNC
- 3D printers
- Laser scanners
- Die casting
Manufacturers that use these tools can not only create high-quality products but also have more freedom to maximize the product’s creation or manufacturing process to ensure that it’s faster, more cost-effective and also less inefficient.
Materials are equally important. Some manufacturers use with only a few materials, which drastically reduces your options for manufacturing. Instead, search for an organization that is familiar with many different materials, which includes:
Silicons like elastomers, gels, and room-temperature-vulcanizing (RTV);
Polyurethanes, such as elastomers and rigid gels, foams, and viscoelastic foams.
There are many kinds of wood as well as metal;
Great manufacturers also hire a diverse and skilled team of engineers and equipment operators, highly skilled metalworkers or woodworkers, and others with expertise to develop and test their products before it hits the market. This combination of a knowledgeable workforce, a variety of raw materials and the latest manufacturing equipment gives you more manufacturing options so you can reduce costs and get your products to market fast. Look for manufacturers who offer as many types of contract manufacturing methods as possible.
Types of Industries That Manufacturers Support
There are various types of contract manufacturing companies that specialize in different sectors. Although some experienced manufacturers are able to provide products to multiple industries, it’s important to collaborate with a manufacturer that understands your needs. The manufacturer needs to show that they
Have experience designing similar products to the one you’re planning to design;
Learn to anticipate the needs of your customers;
Know your market, keep abreast of industry developments, and the newest best practices; and
Are you already well-versed with the regulations of your industry or are willing to research this in detail to ensure your product meets those standards.
This is especially important when your products are intricate or require a great deal of precision. Some of the most demanding industries include:
If you work in any of these fields, you should partner with a manufacturer that has years of experience in these areas. Begin by looking through the portfolio of the manufacturer. What kinds of contract manufacturing have they performed for other businesses in your industry? If you want to make a new piece of equipment for oceanography, it is a good idea to partner with a manufacturer who has made parts for other oceanographic vehicles before. This is because they will already know how to make the equipment and what the rules and regulations are.
How to Select the Best Contract Manufacturer
Now that you understand the three major types of contract manufacturing, you can utilize this information to research different manufacturers. The two main qualities that you must look for in the manufacturer is reliability and the ability to work with you in designing.
To be considered reliable, a contract manufacturer should provide you with full contract proposals and cost estimate from the beginning.
- -The business should be prepared to show you around their workshop.
- -The business should be prepared to describe the methods of manufacturing equipment, tools, and other materials.
- -The business should be prepared to share examples of their work.
However, the primary quality that separates a quality contract manufacturer from a great one is collaboration. When the contract manufacturer cares as much about the quality of your product as you do, you’ll create something you can both be proud of, and which is meaningful to the world.
Steven Cheng, the founder of Topworks Plastic Mold, a China injection molding company with the most complete services, from design to production. Topworks provides customers with a one-stop service for Polycarbonate injection molding and ABS injection molding. The company’s professional team has excellent product knowledge of the plastics industry, which enables it to provide customers with quick responses and high-quality service.