Contract Manufacturers (CMs) are prevalent across various industries and product categories, catering to everything from mechanical equipment to electronics to stuffed animals. However, in today’s discussion, the spotlight is on CMs specializing in mechanical products. When it comes to mechanical CMs, it is essential to note that not all are created equal. While these CMs may vary in their specialties and offerings, there are distinct commonalities shared by great contract manufacturers. For Original Equipment Manufacturers (OEMs) looking for a manufacturing partner, being aware of and understanding these commonalities can be empowering and aid in making well-informed decisions.
Finding Great Contract Manufacturers: What to Look For
Selecting the right contract manufacturer demands careful consideration as it involves a substantial amount of trust and responsibility within the partnership. Here is a brief list of attributes typically found in the best CMs.
1. Their Senior Management is Committed to Success
The senior management team must be committed to the quality, delivery and cost functions of their business and radiate this attitude through the organization. This is a very strong indicator of a great contract manufacturer.
2. They Understand Their Strengths and Weaknesses
Their understanding of their strengths and weaknesses is a fundamental aspect of a CM organization’s success. By being aware of what the organization excels in and where it falls short, CMs can strategically leverage their strengths to their advantage while actively working on improving their weaknesses. These strengths and weaknesses can stem from various factors such as industry expertise, operational capabilities, production volumes, and more.
3. They Carefully Choose Their Customers
Great contract manufacturers often prioritize exclusivity, choosing clients that align with their core competencies and have the potential to establish long-term, successful partnerships. It is essential for both parties to benefit from the collaboration. Therefore, it is wise for organizations to be cautious of contract manufacturers who are eager to take on customers that do not fit their expertise or values simply to fill a backlog.
4. They Have Deep Internal Capabilities
Some call it vertical integration. Vertical integration can enhance efficiency, quality control, and overall performance within a manufacturing operation. A manufacturer that can internally control a majority of the manufacturing will have excellent success in meeting deadlines and expectations. This internal control also minimizes the potential for finger-pointing in case of any problems, as all aspects of production are managed under one roof.
5. They Have Highly Experienced and Talented Employees
Look around at any of the great contract manufacturers and you’ll notice a remarkable dedication among the employee base, characterized by long tenure and low turnover rates. These individuals exhibit a deep passion for their work and excel in their roles. Their commitment to excellence and their unwavering dedication contributes significantly to the success and reputation of the CM.
6. They Are Financially Stable
Look for a CM that is financially robust, with ample cash reserves and zero debt. A CM in a strong financial position will have the resources needed to procure parts, materials, equipment, and real estate swiftly for your projects. This financial stability not only ensures timely project execution but also signifies a level of reliability and capability that can be crucial for the success of your manufacturing endeavors.
7. They Have a Strong Program Management Structure
Program management plays a pivotal role in the success of contract manufacturers. By establishing a structured program management framework, companies can ensure that there is a dedicated team with a strong leader working cohesively to meet the needs of OEM customers in an organized and efficient manner.
8. They Have Proven, Industry Specific Experience
When choosing a CM for your project, prioritizing experience in the relevant industry can be key to achieving successful outcomes. Whether it’s in the medical, semiconductor, defense, or any other industry sector, it is crucial that the CM possesses specific knowledge of the industries unique requirements. By selecting a CM with relevant experience, you can benefit from their established processes, best practices, and understanding of industry regulations. This expertise also minimizes the risk of errors or delays, as the CM can navigate challenges effectively without reinventing the wheel.
9. Cradle-to-Grave Manufacturing
Great contract manufacturers offer cradle-to-grave manufacturing environments that streamline the entire production process, from ordering materials to manufacturing, testing, packing, and shipping. This comprehensive approach allows the original equipment manufacturer (OEM) to oversee the project remotely, simply placing purchase orders and receiving the finished product. Often referred to as turnkey assembly, this seamless integration of services ensures efficiency and quality control throughout every stage of production.
Great contract manufacturers possess a multitude of qualities that set them apart in the industry. As you navigate the process of choosing a CM for your product, consider this list as a valuable guide to help you make an informed decision. For more information, check out our free guide to choosing a contract manufacturer.
With over 25 years of experience in contract manufacturing, PEKO stands out as a reputable and reliable partner for your manufacturing needs. If you are seeking a trusted CM that delivers excellence, do not hesitate to reach out to us today to discover what makes PEKO the ideal choice for your next project.
