Find a contract manufacturer that has a large supply-chain networkBy partnering with a contract manufacturer, you can benefit from their bargaining leverage with suppliers. The benefits for you are lower part costs (which can increase your profit margin and keep your retail price competitive) and shorter lead times. This is one reason many smaller OEMs opt to hand over a BOM to a contract manufacturer and let them do the sourcing and part procurement, as well as the assembly, packaging and distribution.
Evaluate the Scalability of Any Potential Contract ManufacturerYou want a factory that can deliver the scalability you need. If you’re a small niche manufacturer that may mean very small production runs of hundreds of units. For larger OEMs, you’ll require millions of units every year. When you’ve whittled down your list of potential contract manufacturers using the above criteria, visit and personally inspect the remaining top suppliers.
Scale is about a lot more than just the square footage of a shop floor. Inquire about the age, conditions, preventative maintenance and throughput of their machines. If you’ll be relying on your contract manufacturer for the warehousing of parts and finished product, consider the size of the warehouse area in addition to temperature and humidity controls. Especially if housing your product in an unregulated area could cause degradation at elevated temperatures or moisture levels.
With all of the contract manufacturing partner choices out there, I know it can be difficult to find someone that not only understands your business model, but it is suggested you are transparent with your potential suppliers from the beginning so before you begin a tech transfer you can know the viability of the partnership for the long term.