When it comes time to choose a contract manufacturer to help take your company to the next level, most people tend to choose one of three options – hire a local company, hire a company known to a friend or colleague, or hire the first company to pop up on a web search. Before diving into the world of contract manufacturing, we want to help you be a little more deliberate with your choice since it can be easy to choose a company that might not be the best match for your goals. Years of experience have allowed us to put together this list of Do’s and Don’ts that will help you select and work with a manufacturing partner who will not only build your product for you but will also give you peace of mind and allow you to focus on other things, like sales.
Do #1: Do I even need a contract manufacturer (CM)?
In many situations you may decide that to keep costs down you want to assemble everything "in-house", meaning that your product will be assembled in your own facility and by your own staff. This can be really helpful during early product development when things move quickly and can be difficult to do any other way. There’s nothing wrong with starting out as a “kitchen table” manufacturer but once you’ve outgrown that stage and find that most of your time is spent building products, you might want to consider the hidden opportunity costs of building in-house, namely what are you not able to accomplish while performing relatively menial work? A CM can help free your time and give you some room to breathe. Since labour is usually the highest cost in manufacturing a product, if you continue to build in-house you might have to hire help and that might not be feasible for your budget. A CM can give you a unit price with no hidden costs and no additional payroll to manage. Quotes are generally free so it doesn’t cost you anything to find out if a CM would be right for you. Ask yourself: Do I need to free my time?
Do #2: Ask around
Some new entrepreneurs may have experience with contract manufacturing because of their prior employment and would be able to hire a CM based on personal experience. Other entrepreneurs might have to start at ground zero. In either case, it's worth reaching out to people you know: prior work colleagues, prior customers, friends, family, neighbors, people at church, etc. Word of mouth is still one of the most reliable ways of finding help. Even if the people you ask have no direct knowledge of a CM, they may know someone who does. This kind of research can be slow but can provide honest reviews that you likely won't find by just searching for a company on the web. If you do have to hire a CM that is unknown to you, look for testimonials from other entrepreneurs that you can contact. Ask yourself: Do I know of anyone that has hired a CM before?
Do #3: Be specific with your needs
When communicating with someone regarding a topic we're intimately familiar with (like our product or industry), it's easy to subconsciously assume that the other person has that same degree of familiarity. Don’t let the other person fill in the blanks like a game of MadLibs. When it comes to your expectations of a CM, make sure everything is spelled out so everyone has a realistic expectation of the work needing to be done. For example, if you make underwater wireless speakers and you need a CM to fit the electrical components but not assemble the entire speaker, you need to be specific with what you need. Are you going to supply the materials and just need the CM for labor? Do you want the CM to purchase materials for you? Do you need help with engineering drawings? Do you need technical support to help you redesign your product to meet industry standards? Maybe you just need someone to print interesting labels and you can do everything else. Whatever you need from the CM, you need to be the one to communicate that clearly. Vague instructions leads to mistakes and mistakes can lead to costly re-works and even the severing of that relationship. Ask yourself: What exactly do I want a CM to do for me?
Do #4: Communicate!
When working with a contract manufacturer, communication is extremely important. Unfortunately, because of the workloads many CMs have, some just aren't great at communicating with their clients. It's really common for CMs to 'build-to-print' (building exactly what is shown on an engineering drawing), which is fine if your design is complete and you simply need your product at a high volume and a low cost, but don’t expect a lot of communication and support from a CM with this type of service. What if you have a new product, one whose design might change frequently? You'll need good communication from a CM who has experience in helping entrepreneurs make a quality product. After initially contacting a CM, look to see if they replied to you in a timely manner. Did they answer all of your questions, give you feedback or suggestions, and were they personable? Willingness on the part of the CM to visit your location and see your product in its native environment also shows willingness to become a part of your team and a desire to develop a lasting relationship with you. Ask yourself: Do I need lots of communication with a CM?
Do #5: Take care of the details
Getting the details down can be a chaotic process with the potential of many small changes that sometimes happen at the spur of the moment. When working with a CM who is helping you with changes to your design, there might be a large volume of communication between you that can be difficult for everyone to process. Take the time to STOP, THINK, and then TAKE ACTION. Don’t leave communications regarding small details for later. Not answering clarifying questions as they arise can be disastrous, leading to repeating the same problems, reworks, and delays. It's tempting to let these things pile up and see them as adding little value or to tell yourself you'll take care of them once the important stuff is done. These little things, however, soon add up! Look for a CM that is as concerned about the details as you are and you’ll find the CM that is right for you. Ask yourself: Do I have the details down?
Don’t #1: Don't undervalue yourself
When starting out in a new business, it’s too easy to fall into a sense of self doubt and devalue your own thoughts and concerns. When looking into manufacturing partners, do not put your concerns aside by thinking that, as a customer, your lack of experience is not worthy of good service. If something doesn't sit right, trust that instinct and ask questions. Get your concerns answered to your satisfaction. If your CM is just too busy to help you understand the process and answer your questions, take your business elsewhere. An issue with a CM early on could translate into not being able to meet your deadlines later, which could be disastrous. You're worth it, and so are your products, so ask those questions! Ask yourself: Does my CM make me feel like I can ask questions, no matter how silly they might seem?
Don’t #2: Don't put too many irons in the fire
When starting anything new, even just a simple household project, it's easy to underestimate how much time, resources, and stress the project can demand of you. When working with a CM you may be tempted to put forward too many projects, thinking you’re being efficient and taking care of everything at once but the truth is that too many irons in the fire can lead to confusion, feelings of being overwhelmed, and ultimately, might make you feel like giving up. Start with one or two projects and build from that. Handing off a large package to a CM, especially with designs that need lots of tweaking, can cause problems with both the CM processing your request and you efficiently evaluating that output. Working with smaller chunks of a larger project works better and cost less for both you and your CM. Ask yourself: How can I break up my larger project into more manageable smaller ones?
Don’t #3: Don't leave 'em hanging
When looking for a CM to partner with it’s important that you communicate your final decision with everyone you contacted. If you've selected a path forward with the CM of your choice, be sure to give feedback to all the CMs you contacted. A simple explanation of why you did or did not choose them is helpful. Maybe they responded to all your questions with enthusiasm and assurance. Maybe they were unwilling to work with your drawings. Maybe you loved the promotional materials they sent you. Maybe you emailed them 3 months ago and they never got back to you. Feedback helps everyone: the CM you selected will have a good idea of how they’re doing, and those who were not selected will have solid reasons why they weren’t chosen, providing them opportunities to do better in the future. Ask yourself: What are the CMs I’ve contacted doing right and what can they be doing better?
Don’t #4: Don’t walk away without something to do
Working with a CM is a partnership where both parties agree to work together to accomplish a common goal. Don’t leave any meeting or phone call without some kind of action item for you to do and deadline for when to get it done by, even if it’s just “I’ll call you back on Monday”. Without establishing things for you to do (and when they need to be done by) it’s possible that you or your new CM will allow those things to fall by the wayside. Failing to force yourself forward (or sometimes your CM, for that matter) can stall the process and leave you back where you started. We always want to be moving forward and keeping a running to-do list with deadlines helps to keep everyone focused and on the same page. Ask yourself: What tasks can I do after each meeting and phone call to help keep the process moving forward?
Don’t #5: Don't be “extraordinarily preoccupied with efficiency”
Pope St. John Paul II discussed this problematic approach to work in his 1995 encyclical “Evangelium Vitae”. He said that sometimes we become so preoccupied with efficiency that we forget about people. Without actually getting to know the people behind the emails and phone calls, we could easily dismiss a company because it doesn’t meet our ideal price, our ideal lead time, our ideal qualification or certification, etc. At the end of the day, working with a manufacturing partner is about building a relationship. When we take the relationship out of the equation, we miss out on the support, encouragement, and even possible friendships that might come our way because of the business relationship formed. When assessing your options, don’t use price as your only guide. You’ll always get outliers, such as prices significantly higher or lower than the average quote, but leave the prices there on the table and focus on other aspects of the company you might like. Remember, cheap and fast becomes meaningless if your overall experience is bad. You want a CM that believes in your product, in your company, and ultimately, in you. Ask yourself: Other than price, what am I looking for in a CM?
We have spent years working with entrepreneurs, helping them take their products to the next level. We’ve helped with everything from engineer drawings to locating suppliers, from giving feedback on designs and materials to building thousands of products. We love working with everyone from one-man operations to large corporations. We believe in relationships and communication. We really hope that our Do’s And Dont's of Hiring a Contract Manufacturer has helped give you a better idea of how to proceed into the world of contract manufacturing. Please email us with your feedback, questions, comments, or even to request a quote. Let’s build something together!