What is a Contract Manufacturer and Do I Need One?
You might have heard the term “contract manufacturer” in discussing supply chains and manufacturing. But what is a contract manufacturer exactly, and which businesses can get the most out of contract manufacturing services?
Contract manufacturers are among the most important elements in many business’ supply chains. These manufacturers provide production capacity on demand to all kinds of businesses. In the following guide, we’ll talk about how contract manufacturing works and if it’s right for you.
What is a Contract Manufacturer?
A contract manufacturer is a type of manufacturer that provides their services to other businesses. Rather than selling products that it makes, a contract manufacturer accepts contracts to manufacture goods for other businesses.
Contract manufacturers are useful because they take on the burden of the capital investments required for complex manufacturing processes. It’s often not practical for every manufacturer to buy their own slitting machine, laminating machine, or adhesive coater. Instead, one manufacturer can buy the equipment and provide the operators and space to produce goods on behalf of its clients.
Most contract manufacturers employ experts who know how to use specialty equipment safely and efficiently. These experts help businesses understand the process and determine the most effective solutions for their requirements. If needed, they can also often help businesses source materials for their manufacturing processes.
Benefits of Working with a Contract Manufacturer
Good contract manufacturers provide many benefits for the businesses that work with them, including:
- Reducing or eliminating the need for pricey in-house manufacturing
- Specialized expertise in unique types of manufacturing processes
- Scalable production capacity that can accommodate swings in demand
- Helping in-house employees focus on their own responsibilities
- Versatility in manufacturing processes
- Ability to engage in iterative design and prototyping processes
- Research and development capabilities available to clients – saving them the cost of creating such a facility in-house
These benefits are why contract manufacturing is the backbone of so many supply chains. To help them allocate labor and capital more efficiently, businesses of all kinds turn to contract manufacturers.
Who Should Use a Contract Manufacturer?
Many different kinds of businesses use contract manufacturing services. These are some of the industries that most commonly contract out their manufacturing operations:
- Household products
- Consumer electronics
- Personal care
- Medical devices
- Building materials
However, any business can reap the benefits of contract manufacturing, including businesses that are:
- Developing and market-testing new products
- Struggling to meet demand using existing capacity
- Expanding into new industries or markets
- Seeking to streamline and improve supply chain efficiency
- Creating contingency plans for demand spikes
You might also hear the term “toll manufacturer” used in discussions about contract manufacturing. Toll manufacturing is simply contract manufacturing without the added service of materials sourcing. If your business already sources its own materials, toll manufacturing might be a better fit than true contract manufacturing. CTI offers both types of services.
Contract Manufacturing Services from CTI
We’ve invested in building up our manufacturing capacity to place ourselves among the industry’s very best. Our facilities offer full-service adhesive coating, laminating, and die cutting solutions. Thanks to our robust capacities, we’ve had the honor of working with many of the biggest names in American industry. Our clients range from small start-ups to many Fortune 500 companies. They all benefit by the cost-savings we offer.
Moreover, CTI also offers strong opportunities for research and product design. We have extensive experience in creating innovative custom designs for our clients and solving tough challenges. Our combination of knowledge from industry pros and cutting edge technologies will get your business the results it needs.
Every client benefits from our 5-step process, which provides an efficient and budget-conscious plan to move the project smoothly from inception to finished product.
Our free consultation involves a discussion of a potential client’s requirements and goals to ensure that we are a perfect fit to fulfill those needs.
RESEARCH & DEVELOPMENT:
Our state-of-the-art facilities and equipment are specifically designed to provide flexible, meaningful services to bring a successful product to market. This may involve improving an existing product to meet new competition or creating a completely new product from a client’s idea or blueprint. Every company cannot build a fully functional lab or research facility, with all of the necessary equipment and technicians, if they do not need to use it every day of the year.
LAB TESTING & SAMPLES:
Our extensive resources allow us to produce samples along the way during any stage of the process. This allows us to test and evaluate products early in the production cycle, when it is more efficient and less costly to make necessary changes.
PILOT TRIAL RUN:
After the previous steps have been taken, we find it adds to the efficiency of the project to produce a smaller version of the final production run. This allows us to discover production flaws or bottlenecks to make the final production run as smooth as possible.
The final production run is successful because we have carefully followed a well-thought-out plan. By utilizing our production facility and our experienced technicians, your company can be certain of a successful outcome. Since we have served major companies in industries as diverse as construction materials, automotive and consumer products and even Steinway Pianos, your products will benefit from that expertise and save on cost in some major areas.
CTI’s conversion manufacturing pros will be happy to begin assisting you today. Reach out by phone at 419-924-5566, or contact us online to request a free quote.