September 8, 2021

When searching for a contract manufacturer, is cost the only piece of the puzzle you’re looking at? While it certainly is an important part of your relationship, the wrong part at the right price is still the wrong part.

Like a marriage, compatibility should be a top priority when searching for a contract manufacturer. This vendor should be looked at as a partner in your relationship, not as a means to an end.

Because of this, you cannot simply hire the manufacturer who does the job for the lowest price. You must find a company that knows your business, knows your industry, and can make products for the market where you are working.

The Role Of Contract Manufacturers

Contract manufacturers specialize in large batches or multiple runs of the same part. Their business is in CNC Machining, so they have the technology and know-how to produce even the most complex parts consistently.

Contract manufacturing facilities usually have many machines in their facility, allowing the same part to be made on multiple machines simultaneously, significantly reducing the lead time for your parts. Better yet, most contract manufacturers have a prototyping department in-house, so they can machine small batches of your part for testing purposes before you commit to a full run.

The Role Of Brokers In Contract Manufacturing

Brokers will outsource the production of your parts to another company on your behalf. For those that don’t want to search for the right contract manufacturing partner, brokers can use their connections and time to outsource parts to quality machine centers. Brokers can cost more, but will generally result in a quality product. The unfortunate truth of brokers is this: brokers eliminate the direct relationship of the customer with the supplier who made the parts. You must rely on the middleman: the broker.

Also, since brokers are connected to a number of machine shops, they might use different shops to create the same part, which can result in some inconsistencies between multiple batches or orders of the same part.

5 Options for Choosing a Manufacturing Supplier

Service Bureaus

Service bureaus use a wide array of technologies to service their customers. A service bureau can move quickly, and they can make just about anything you want thanks to their full suite of services. They also usually provide automated online quoting for a quick and easy quoting process. However, these companies have large minimum orders you must place because they have many clients they must keep happy.

You can have your products made quickly with very good quality. Service bureaus can usually offer fair pricing since they deal in high-volumes.

Brokers

A broker will search for a company to machine products for your company. The broker will ask multiple contract manufacturers for bids on your job, and it can take time to review the bids to find a winner. Even though the bidding process often finds the most cost-effective option and can help you save money, the broker’s commission will be an additional cost. Most companies who use brokers break even budget-wise, but don’t have to take the time to source and validate multiple options.

Small Machine Shops

Small machine shops usually have a wide range of capabilities and high level of experience using unique and specialized materials that high-volume shops don’t. Smaller shops can machine intricate and complex parts, but usually at a higher cost-per-part than a high-volume business model. Smaller machine shops tend to have better customer service and a more personal understanding of your goals than a larger shop.

High-Volume Contract Manufacturing Plant

High-volume contract manufacturing plants can machine a lot of parts very quickly, but don’t expect the same personal customer service experience you get with a smaller shop. High-volume companies tend to be more transactional and less relational since they work with many different customers every day.

High-volume companies may be hesitant to work with exotic materials, and they might not have the capacity to do more intricate parts because they rely on assembly lines to complete many projects. With simpler parts, expect a higher-quality product and short lead times.

Also, high-volume businesses can slash costs because they are dealing in such large quantities, but might require a minimum order that’s larger than you need.

In-House

In-house shops are probably the most convenient option, but also can come at an extreme cost. In-house shops must be equipped with all the machines and accessories needed to produce high-quality parts. You’ll need to hire a complete staff for this purpose (which can be challenging – many established machine shops are struggling to staff their machines with qualified workers) and managers who will manage the production process. You will be responsible for ordering raw materials and keeping up with your production timelines. Some companies can handle this setup, but others do not have the resources to devote to a production facility.

Your contract manufacturing needs can be met by a partner or through your own facility. Using the tips above ensures that you can get the best parts and build a relationship with a company that will serve you faithfully.

The Problem with In-House CNC Centers

Simple parts can be machined fairly easily in-house, but issues will arise when you start working on more complex parts. You can hire a staff, get a small workshop, buy CNC machines, and set yourself up for as much success as possible. However, there will still be gaps where the parts are too complicated to be machined using your technology and processes. In-house departments, while convenient, often have a limited capacity, selection of materials, and capability.

Contract Manufacturer Characteristics to Consider

Look at what your volume will be when it is time to buy parts and get to work on manufacturing. You need time to assemble all your parts, and you must find a company that can do the job quickly. A small machine shop can produce tiny batches of parts for your smallest project, but a machine shop cannot help you if you need to order thousands of parts at a time. You must narrow down your list based on the volume that your partner can provide, and you should ask them for references or read reviews to find out how much volume they can actually handle.
Questions To Ask Potential Contract Manufacturing Partners
When you are looking at suppliers, you must have a proper meeting with them to learn what they can do. You have every right to ask questions that will reveal what the company is capable of, and you must get the right answers before you sign a contract with these companies.

Here are some questions you should consider before hiring your contract manufacturing partner:

  • Does the company actually have the capacity to make the number of parts that you need?
  • Can the supplier move at the speed that you prefer (if not, you might not stay on schedule)?
  • Does the company require you to place a minimum order? If they require a minimum order that is too high for your budget, you should move on to other options.
  • Do they have quality control that lives up to your standards? If you cannot see the level of quality control that the company offers, ask them to show you.
  • Does the company use the materials that you want? Do not allow the supplier to force you to use substandard materials.
  • Does the company help you with designs? You might need to see a sketch or get help making these parts if you are not an expert.
  • Does the company have a track record of working with businesses in your industry?
  • Can you see a portfolio of their work?
  • Can you take a tour of their facilities?
  • Can you see prototypes of the parts you want to make?
  • Will you receive progress reports for your project?