How to Overcome the Challenges of Contract Manufacturing?

How to Overcome the Challenges of Contract Manufacturing?

Laura Davis, Manufacturing Technology Insights | Thursday, August 26, 2021

The Coronavirus outbreak and external factors can disrupt business processes and interrupt supply chains. Although a pandemic is unforeseeable and rare, one can and should prepare for annual work slowdowns and hindrances to cultural events.

Fremont, CA: The benefits of contract manufacturing, also known as outsourcing, are diverse and significant. When a company doesn't have to develop and maintain its own facilities or train and hire its own employees, it saves money. The organization can relocate production to a country where raw materials and labor are less expensive and where competition for contracts within that country helps cut down costs. However, contract manufacturing has its own set of challenges that, if not handled properly, can completely destroy the purpose completely. As a result, before committing to an outsourcing strategy, one can first assess the risks and devise methods to mitigate them.

Let us look at some challenges of contract manufacturing and how to overcome them:

Supply chain — The Coronavirus outbreak and external factors can disrupt business processes and interrupt supply chains. Although a pandemic is unforeseeable and rare, one can and should prepare for annual work slowdowns and hindrances to cultural events. It is also vital to be mindful of any possible political or labor conflicts in the country one has chosen. Finally, one should consider whether raw materials will be available, whether the nation has the infrastructure to transport materials from point A to point B, and whether a facility will be able to fulfill one's order. Having a backup plan in the event of an interruption is imperative.

Quality Control Is Important— Everyone needs to reduce manufacturing costs, but not to the detriment of quality. To produce a finished product one is proud to sell, they will need high-quality products, well-trained and capable labor, and efficient manufacturing processes. It is critical to choose a facility that has effective controls in place at all stages of production. When launching a new product, quality control is particularly important.

Distance from Production Site — When one is an ocean or a world away from the production site, they don't have real-time access to what is going on at the site. One might only have a rudimentary understanding of how things are made. It's important to have faith in the managers in charge of production.

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