Contract manufacturing provides numerous benefits. Utilizing the help of an experienced contract manufacturer allows businesses to produce high quality products faster and at a lower price than producing them in-house. Contract manufacturing also helps large organizations fulfill periods of high demand.
While contract manufacturing provides many benefits, it’s not without risk. Certain issues can arise during the manufacturing process. It’s important that OEMs understand these issues and learn how to effectively minimize their impact or avoid them altogether.
Supply Chain Issues
Many organizations experience supply chain issues when working with a contract manufacturer. While OEMs have complete control over the types of parts used when producing products in-house, they give up this control when they enlist the help of a CM.
Business owners can eliminate supply chain issues by working with a reputable and experienced contract manufacturer. It’s important that leaders discuss their needs and requirements during the initial call with the CM. This can help avoid problems in the future.
Quality Controls
Another issue, outsourcing reduces the amount of control OEMs have over quality. Working with an inexperienced CM can have dire consequences to the finished product. It’s crucial that OEMs locate an experienced CM with solid quality control practices in place. It’s also advised that leaders work with a CM with experience producing products for their industry. This is especially true for industries with strict regulations and requirements like aerospace and defense.
Intellectual Property Risks
Enlisting the help of a contract manufacturer gives them access to the business’s intellectual property. It’s important that OEMs and inventors patent their idea before speaking with a contract manufacturer. Once the appropriate patents are in place, the inventor should explain the conditions and details of how the CM can use the patented information. It’s also important to have the contract manufacturer sign a licensing agreement prior to starting any work on the project.
Communication
Many OEMs experience issues with communication. This is especially true when outsourcing production to another country. It’s crucial that OEMs have a clear and open line of communication throughout the entire project.
During the interview process, OEMs should ensure the CM fully understands the project. Providing detailed schematics, blueprints, and other supporting documents can help the CM better understand what is needed.
Means Engineering provides contract manufacturing services to inventors, entrepreneurs, small businesses, and large organizations. Please contact us for information about our services.
2020 brought massive change for businesses in almost every industry. For manufacturers, the global pandemic had serious consequences for those that relied on parts and components produced overseas. As many businesses around the world halted operations, manufacturers in the U.S. found it difficult to continue their normal operations. Several OEMs utilized the help of U.S. based contract manufacturers to fulfill orders and keep up with demand.
It’s not uncommon for American companies and OEMs to enlist the help of electronic contract manufacturers. Depending on the needs of the company that hires them, ECMs assist with design, production, and testing of a wide range of products. Larger companies often hire electronic contract manufacturers to help fulfill periods of high demand. Small companies, start-ups, and entrepreneurs may utilize an ECM for all parts of production or to launch a new product.
Despite the differences, many people believe that Private Label and Contract Manufacturing are the same. Both forms of manufacturing are prevalent in numerous industries. Each has its own benefits. When looking to outsource, organizations must decide which solution works better for their situation and business.
Entrepreneurs and inventors come up with new ideas all the time. Although many of these ideas could potentially improve quality of life for people around the world, most never make it off the drawing board.

