What are the Benefits of Using a Contract Manufacturing Company?

Are you prepared to present your own goods to the marketplace but don’t have the manufacturing capability or capacity? In this case, you may benefit from sourcing contract manufacturing. Companies which offer these service offer goods under brands or labels of the other businesses based on the own guidelines and formulas, otherwise known as private labeling. That means you will have full control over designs and the technical feature of the products without having to rent or purchase expensive production systems.

Organizations across many industries outsource production to private label manufacturers to save time and reduce labor costs while ensuring their products meet industry standards. These business models are widely used for the chemical packaging industries worldwide.

The Companies for Immediate Options

Contract manufacturing companies can offer a couple of options:

– Supplying pre-made, in-house formulations which can be labeled under the outsourcer’s brand

–  Creating a new formulation for your industry and application’s needs

–  Matching a customer’s specifications for their current formulation to produce goods meeting the customer’s formulation standards

In each option, a contract manufacturer can source raw materials and package directly from their suppliers. A contract manufacturer can also receive raw materials and packaging from the customer, maintain inventories of these items, and produce goods as needed by the customer.

A contract manufacturer’s main goal should be maintaining the high standards of its customer’s valued brand at competitive, stable prices. To achieve this, a contract manufacturer will assign a project manager for each client, which will have a comprehensive understanding of the customer’s formulation, packaging, palletization, and fulfillment deadline requirements. This will result in a finished good which meets the customer’s standards.

The process of Contract manufacturing is a beneficial outsourcing process because utilizing this service can result in keeping business costs and company overhead low. Please see additional benefits associated with the contract manufacturing companies below:

The Process of Cost Savings

Private label/contract manufacturing companies can offer important cost benefits over a customer’s in-house production. How can this be so? Important factors which can reduce costs – bulk purchasing, skilled labor, automatic equipment/infrastructure, permits, reduced production errors – are readily provided by a reputable contract manufacturer.

The Operational Advantages

Private label /contract manufacturing can offer agile production capacities which can satisfy unique customer scenarios such as a sharp surge in short-term demand. The customer will not be required to shift their in-house operations or use resources and money investing in personal facilities for meeting the demand. Additionally, customers wishing to develop new products may use the contract manufacturing companies for formulation development and pilot runs in testing the markets prior to implementing the full-scale manufacturing facilities for a new product.

Professional Expertise

Private label / Contract manufacturers can offer vast experience in production processes to maintain production quality and efficiency for the customer’s valued brand. Their involvement and know-how will safeguard against critical errors that cost time and money. Additionally, this expertise can play an important role in next-generation products, due to contract manufacturers often having formulation labs and important relationships with raw material suppliers.

Increased Output

Using an experienced contract manufacturing company can assure your manufacturing rate grows, allowing an increased capacity. This is a situation where “been there, done that” completely aids your trade. Expertise in formulation and fulfillment of goods allows for customers to have your products reach the market quickly while maintaining product quality.

The Required Flexibility

The greatest asset a contract manufacturer offers is flexible options. The contract manufacturer’s whole business model is to have the ability to offer customers the exact product that they need. This means they often provide multiple production lines for unique volumes and package/label options, and a friendly willingness to take care of the customer’s requirements.

Here at Allied International Specialty Chemicals, we have two principles we adhere to as a private label/contract manufacturer:

1. Understanding our customer’s specific needs

2. Commitment to fulfill those needs with superior products and services at the best available value

Please feel free to reach out to us for any private label/contract manufacturing services you require.