When we get on the phone with our manufacturing marketing clients, we talk about more than manufacturing marketing strategy. As partners with our clients, we’re interested in the whole business. That’s why we’re focusing on working with contract manufacturers in this manufacturing business strategy post.
Of the manufacturers polled during the “Build Better 2022” virtual conference segment on product development, 80% reported that they rely on contract manufacturers. Only 20% indicated that they do all manufacturing in house.
Companies launching new products and technologies often lack the capability to manufacture in house. Using a CM allows them to scale their business up over time.
So, it makes sense that such a high percentage of the conference attendees would be using contract manufacturers. But what are some other use cases for working with CMs?
According to Businesswire, Milo Werner oversaw industrializing technology and new product introduction for Tesla’s Roadster; Model S powertrain, battery, and dual motor; the first iteration of Tesla’s autopilot; and the Model X. Werner previously held senior roles across engineering, manufacturing, and product development for multiple companies.
Here’s a summary of what Werner said about contract manufacturing (CM) during the Build Better 2022 session as aired on the Manufacturing Happy Hour podcast.
If you’re a smaller company and you choose a large, multi-national CM then you will not be a priority for them. CMs operate on razor thin margins. So, they will give the most attention to the companies with higher contracts.
CMs work with numerous projects and have a broader perspective. For example, they may be able recommend new and innovative type of surface for plastic injection molded pieces.
Any changes post contract drive costs up and delay delivery. “You think you’re improving your product, but in changing the design or materials you’re driving costs up,” said Werner. They will pass those costs along to you so talk with them as you make those decisions.
Although you lose some control over the manufacturing process, you need to maintain open communication and check in about deadlines. Someone within your company must track and follow up on all important stages.
For example, don’t assume that the CM ordered the materials just because you told them to order the materials. Follow up and make sure that it got done.
Also, don’t assume that they are running Material Requirements Planning (MRP) and keeping up minimum order quantities. Check on it.
If you want to have an automated line for your product, then you may need to take responsibility for making that happen. Werner recommends that you communicate that to the CM right from the beginning.
Tell them, “We’ve designed this product for automation, and we want to automate it.”
Your company may want to select the automation vendor. Some CMs might have the capability on staff to automate a line, but that will not be true for all CMs.
For more on new product introduction, listen to the entire Manufacturing Happy Hour podcast with guest Milo Werner.
What tips do you have about the pros and cons of working with CMs? How do you vet CMs you choose? Share your thoughts with us! We’d love to hear from your experience. Get in touch through this website, or connect with us on LinkedIn or Tweet us.
—parin
Managing Partner
Image source: Businesswire
With over two decades of experience, Parin leads an expert demand-generation agency, StratMg, that helps industrial manufacturing clients achieve unambiguous and quantified organic sales growth across the US, EMEA & APAC.
Parin has built & positioned StratMg to be a value-added marketing services provider that strives to create a culture of quantified sales-driven marketing initiatives leading to sustained business growth through channel management, diversification, new customer acquisition and retention strategies and tactical execution.
