From idea generation to product launch is a long process that requires the collaboration of multiple parties that come together for the betterment of your product. As from our previous blog “Changing Contract Manufacturers - Why and How”, the manufacturing partner is quite often the party that fails to carry their weight. However, with the right due diligence followed by the selection of the right contract manufacturer, your company will immediately add new strengths and capabilities. Partnering with a CM that provides development resources will free up more of your company’s resources to focus on product sales and marketing.
Background The past has mostly revolved around companies sourcing existing products from manufacturers that have pre-existing tools for that product. This has lead to the same product flooding the market which leaves the company with low margins due to extremely high competition. For this, you can think of going to companies on Alibaba to find products that they already have and trading that product. However, strong trends are pushing towards the development and manufacturing of a product that can be sold and distributed by one company, rather than multiple companies. Deloitte has also stated that launching new products is the #1 strategic objective for product based companies. Therefore, launching innovative products faster than before is critical for product based companies.
With traditional product development there are often multiple breaks in the chain that cause both time and financial delays. Below are the most common areas that most often cause these delays:
Poor Engineering - This is the part that dictates the direction of your product. There is also a correlation as well with poor engineering and a high rejection rate, higher costs, and low customer satisfaction.
Budget & Time Management - There are financial costs with each step and sometimes certain steps are forgotten or skipped. Failing to manage time and money will lead to postponing product launch or having to kill the project.
Transfer of Documents - Forgetting to transfer the appropriate files and/or files getting lost or deleted due to poor file management practices.
Pricing - Receiving a quote that would price you out of the market. This is usually due to poor engineering which makes the product expensive to make and thus uncompetitive.
Additional Engineering - Just because you have a sample doesn’t mean it can be made. When this happens the CM must re-engineer the part which adds delays and cost.
Why CM’s Offer Development Services? The simple reason CM’s care is because the success of the CM is strongly correlated to the success of their clients. So, it’s in the best interest for the CM to provide services that are geared towards improving the development and manufacturing efficiencies of their clients. The CM’s offer services to make client products better while freeing up time for the client to focus more on sales and marketing to improve the overall satisfaction of their end customers.
The Contract Manufacturer’s Edge With speed being the most important part of bringing products to market, developers see the importance of partnering up with a contract manufacturer to expedite the development steps and to smooth the transition into production.
The reason that developers are partnering with contract manufacturers is that they are the most knowledgeable with regards to improving production processes, materials, tolerances, specifications, and the overall manufacturing process. Developers see the value of this and are starting to take advantage of the skill sets that these CM’s can provide. Most CM’s have a proven track record of collaborating with companies to guide them and work with them through the complex development steps.
Below are the development steps in which the contract manufacturers show their greatest value:
Product Engineering The company has seen an issue or problem in the market and they would like to develop a product to fill the void. A contract manufacturer is valued here because they can find solutions to the problems faced by the client. With engineering and manufacturing experience, the engineers from the CM can engineer a product that can be made efficiently and economically manufactured, plus providing valid solution to the problem.
Functional Samples Sometimes referred to as PoC (Proof of Concept), which is to check the functionality of the previous step, which is product engineering. CM’s provide value as they are able to get the design into a prototype as quickly as possible. Most CM’s also have machines that are used strictly for samples. Going this route will save the company time and high prototype fees.
Reengineering Quite often, the first sample will never be the last sample. There are engineering and design changes that occur throughout the development process that seek to continuously improve the product functionality until the goal is achieved.
Golden Sample The golden is the final sample and what production will be based on. The CM can use the golden sample to build quality requirements, build production documents, finalize costing and much more. Furthermore, since the CM has been involved throughout the development process there is no need to worry about the transfer of confidential IP documents to other parties.
Packaging Design Choosing a seasoned CM can also provide you with samples of packaging that can work within your respected industry. A CM will also have relationships with packaging suppliers that can properly design the outer cartons to keep your product safe during transportation.
Quotation During the development stage, accurate pricing plays an important role. The CM will understand your project's budget and can design/develop the product to meet the target price necessary to be competitive and profitable.
Manufacturing Documents Since the CM has been working on this project, there is no need to share extra documents and run the risk of failing to pass off important documents. The CM can compile all of this for you.
Tooling Designing tools to be fabricated can change from what the final CAD drawings look like. For plastic injection molding, there are a number of key areas to take into account when designing the tools, such as shrinkage, walls, material flow rate, cooling time, etc. Finding a CM that can also design your tools is a huge benefit in order to make sure that the final product is what you have planned it to look like.
Production The final step is to launch production. With your CM involved throughout product development, marked improvement in speed and efficiency are realized from development to production.
Conclusion Partnering with a qualified CM to collaborate on product development can provide your company with the speed and cost efficiency needed to give your company a competitive advantage. Selecting a CM that has a good reputation in your industry and also with experience developing innovative products will free up company resources to focus on the sales, marketing and distribution side of the business. Like always, it’s best to complete due diligence of multiple CM’s before making a decision on which one to engage longterm.
Other Articles and Resources:
Case Study: Saving the Company with Contract Manufacturing