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How Contract Manufacturers Can Surpass Expectations in Challenging Times

by Sean Sennott
US Microsoft Dynamics 365 Head of Architects, Columbus Global

The past couple of years have been a rollercoaster for all manufacturers, including contract manufacturers. The industry experienced a downturn at the beginning of the pandemic and then began to grow again as manufacturing increased.

But disruptions continue, even as demand spikes for certain commodities in hard-to-anticipate ways. This ongoing instability is driven by consumers' changing life and work patterns and exacerbated by pandemic-related restrictions, surging coronavirus cases, congested ports, and worker shortages.

The good news for contract manufacturers is that demand for their services is likely to continue growing. They are positioned to provide solutions that address the challenges facing their clients today as demand for finished goods remains strong.

They also provide three distinctly valuable benefits: efficiency, security, and expertise.

  • Efficiency: Contract partners help companies do more with less, freeing up resources so client companies can focus on other concerns like branding and marketing. Contract manufacturers help their clients stay lean and agile, reducing stock and overhead.  The client can then respond more quickly to fluctuations in the market, allowing them to ramp up and down as needed.
  • Security: Clients need to know their intellectual property, especially trade secrets, will be carefully safeguarded and that sensitive communications will be kept confidential.
  • Expertise: Seasoned contract manufacturers supply hard-won expertise and experience as a value-add along with the speed, convenience, and streamlining of operations. The key is to demonstrate that products will be produced on time with close attention to quality and the reputation of the brand or label.

In a market roiled by uncertainty, these qualities make a reliable contract manufacturing partner indispensable to the companies that hire them. And having the right technological solutions in place can help you surpass expectations in all three categories.

The challenge for today's contract manufacturer is delivering consistent results that live up to the hiring company's demands and expectations, which may not always be flexible or realistic considering the disruptions and pressures of the current manufacturing environment.

Rise to the occasion: How contract manufacturers can earn clients' trust

The three values mentioned above — efficiency, security, and expertise — are ultimately variations on the theme of trust. Successful contract manufacturers understand that trust is one of their most valuable assets. In exchange for the speed and convenience that contract manufacturers deliver, the client must surrender a portion of control. The minute details of systems and operations are no longer directly in their hands.

Think of it like this: A friend has allowed you to take the wheel of their expensive new car. It's a great act of trust. Your job is to demonstrate you're up to the challenge, so they can relax and enjoy the ride.

Of course, detailed and carefully negotiated Manufacturing Agreements are the cornerstone of good relationships between contract manufacturers and clients. But beyond what's written in black and white, the unwritten ways you demonstrate that you respect your clients’ interests will ultimately cement the business bonds between you.

Let's look at the challenges contract manufacturers face — and how best practices and the right technology can help you rise to the occasion and surpass expectations.

1. Ensuring product quality and consistency

As part of the deal, contract manufacturing clients can’t monitor product quality closely and continuously in the production stage. They need assurance that the quality of their products — and by extension, the reputation of their brands — won't suffer when they hand production over to you, the contract manufacturer.

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About Sean Sennott

Sean Sennott is US Microsoft Dynamics 365 Head of Architects with 12 years’ experience with Dynamics AX 2012/D365. He has implemented Microsoft Solutions for many multi-national companies in manufacturing, sales and distribution.

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