What Do I Need to Know If I’m Looking for a Contract Manufacturing Partner?
Key Questions to Ask a Design and Contract Manufacturing Partner
It’s time to find a design or contract manufacturing partner. It might be the first time you’ve engaged a 3rd party contractor or you may have tried it once before and it didn’t go well. Many companies can find it challenging to understand what they need out of a design or manufacturing partnership. There are companies of all sizes and specialties, so how do you choose the right one for your needs? Here are some of the key questions to ask a potential partner from the experts at E4D Technologies:
Successful Partnerships Are Based on a Good Financial and Capacity Match
The first step to finding a contract manufacturing partner should always be finding one that aligns with your financial size and volume requirements. Many times we see companies that are early in the product life cycle with lower volumes and revenues trying to align with very large companies that excel at high volume and high revenue accounts without great success– especially in medical device manufacturing. Your company and your future partner are looking at cash management and both parties will benefit when expected revenues and volumes are more aligned.
When you are researching the right partner, ask your potential partner about their sweet spot for the size of a customer. They should provide you with a range that aligns with your anticipated needs. If they don’t have an answer or their answer is significantly different than your companies revenues and capacity needs; they may not be your best fit for a design or contract manufacturing partner.
Matching Capabilities is Key for Design and Manufacturing
A second key part of finding the perfect contract manufacturing or design partner is matching their capabilities to your production or design needs. Some high-level things to consider:
- Do they have the required certifications you require?
- Do they have experience in products similar to yours?
- Do they have experience in global procurement?
- Do they have the necessary quality systems in place?
- Do you need support with Design? If so, they should have in-house engineering?
- Where do they manufacture and does it align with your needs logistically?
For example, if you have a high regulatory product like a medical device, it is much easier and effective to partner with someone who has already built medical devices and understands the regulations in the various countries you want to sell your device.
If you need design support, what types of engineering skills do they have in-house? What will they have to outsource?
Just like most relationships, the more you have in common the easier the partnership will be over the long term. The goal in this step is to try and understand how your future partner best aligns with all the elements you require to help you bring your product to market, scale it, and improve it.
Assess if This Manufacturing Partnership Will Provide Value
The first two steps help you narrow down the list to those partners who can best support you and your product. While there are many different factors to consider when determining a manufacturing or design partner, finding the one who will provide the most value to your business is essential. The most crucial factor is that you need someone who is able to ask the right questions and give the right answers. You need someone with the experience to be your coach in the process. The partner will help you, based on their experience, on how to reduce costs, improve efficiencies, refine designs, determine the right logistics for your products and, most importantly, tell you upfront if they don’t have the capabilities to help you.
If you are looking to engage design service from this partner, they should bring value not only to the design but around the management of the Intellectual Property (IP). Conversations over intellectual property are made during the contract negotiations and it should be clear if they own the IP or if you own the IP when the design work is completed. They should also be able to demonstrate that they have a track record of protecting IP. At E4D Technologies, it is always our goal to let our partners own their IP. We work with our partners to make sure that they understand the controls and contract agreements that protect their intellectual property. Because at the end of the day, a healthy partnership is built on trust and transparency.
Lastly, consider proximity. Depending on your needs, it might be important to have a partner who is located within easy travel distance so that you can go and see the process and products. This can be important in the early days of a product or relationship. Perhaps proximity is more important when you consider logistics and your end market. Depending on the product size and weight, it might be more important to find a manufacturing partner that is in relatively close proximity to your end market to mitigate logistic costs. Your choice between two manufacturing partners might come down to their time zones and how important it is to you to communicate quickly with them during your working hours. These are all important considerations in determining the value of potential design and manufacturing companies.
Ask for a Tour of Their Manufacturing Facility if Possible
One of the key factors in choosing a manufacturing contract partner is transparency. You want a partner who will open the doors of their facility to you, so you can see for yourself the site, the processes, products, and the quality they have currently in place. Keep in mind that this will likely require you to sign a nondisclosure agreement for your protection and for their other customers.
If you’re in the market for a new manufacturing or design partner, E4D Technologies would love to see how we can help your business grow. Our team works together under one roof, each with a unique specialty covering all major technological disciplines. We have a deep understanding of what it takes for a powerful product introduction into markets across the entire globe, especially in highly regulated industries.
Want to learn more about what E4D Technologies has to offer your business? Contact us today!