How you choose the manufacturer for your product obviously depends on what sort of product you have. However, there are certain common guidelines that can be followed no matter what your product is. Let's concentrate on those general guidelines.

Why should you outsource your production?
The main reason why companies choose to outsource their production is to lower the burden of capital investment and the financial costs associated with the extra staffing that would otherwise be required.

The other equally important reason to choose to outsourced production, is to hasten the production cycle. This happens especially in the engineering industry where the final product is often obtained by assembling several components which can be manufactured independently of one another.

The third important reason for outsourcing production, is that by doing so, it gives a great deal of flexibility in the manufacturing schedule and hence makes the business more able to respond to shifting consumer preferences and demands.

Whatever your reasons for outsourcing, once the decision has been made, there are certain criteria which you must not overlook.

Seeking a reliable manufacturer
You have to know whether the manufacture you are planning to use adheres to schedules, maintains quality and understands your production needs. Unfortunately, this type of information is not readily available on any website or in any testimonial column.

You will have to do a fair amount of research, interaction and, in some cases; it may involve a certain amount of legwork too. You might have to communicate with the existing clientele of the company and you should be sure, too, of the company's financial stability.

Adding Value
If you are outsourcing your production, you can legitimately expect that the contracted manufacturer will add value to your organisation. Let us dig it a little deeper.

As a main producer you should expect that your contracted manufacturer will increase yield and bring down the cost per unit of output. In order to achieve this, they must have adequate research and developmental infrastructure and qualified manpower to get sustainable results. So, when negotiating, prior to any contracts being signed, you need to be sure that the manufacturer has all the necessary elements in place to achieve production within your specifications.

There is a potential pitfall which you should be aware of at this stage. Many sub-contracted manufacturers who effect an improvement in the production process also claim a share in the intellectual property rights. Make sure, then, that you allow for this eventuality within the contract terms. At a more advanced stage, this type of issue might become difficult to handle.

Regulatory Requirements
There are many laws and regulations regarding standards in manufacturing and production, and you need to ensure that your chosen company complies with any and all of these requirements.

One of the first, concerns environmental standards prevalent in that particular region. It is always better to choose a manufacturer who has an ISO 9000 or an ISO 14000 or similar certification.

Equally important is the restriction connected with child labour. Some South Asian manufacturers are said to have a tendency to flirt with this legal restriction. As the final marketer, you will have to face the consequences if any of your sub-contracted manufacturers fail to adhere to these regulations.

If you operate in the pharmaceutical field, and are looking out for a manufacturer for an advanced intermediary or an active ingredient, you may choose to locate one with a CGMP (Current Good Manufacturing Practices) certificate from the FDA. This certification could save you considerable time and effort later, as it is considered as an industry standard.

On-site inspections
Nothing can substitute on-site auditing of a manufacturer's production process. It not only satisfies the parent company that everything is progressing as agreed, but also keeps the contracted manufacturer on its toes regarding practices and quality of output.

Most leading firms have a standard set of checklists in this regard and they have a regular auditing team whose only job is to travel to each facility verifying whether all the requirements are being met and that all the applicable regulations are adhered to.

Newly invented products
Suppose you have invented a product and want it to be manufactured commercially. What should you do?

The best way to go about this is to obtain a patent and then sell the license to manufacture, to a large company. In that way you avoid the hassle of manufacturing and enjoy a steady royalty on your intellectual property.

The other way, is to find a collaborator who has the infrastructure in place to commercially produce the new product. While this may be a riskier option as your financial commitment might be greater, the potential rewards may be worthwhile.

The third way is to outsource the manufacturing. Most Fortune 500 companies rely, these days, on outsourcing for improved productivity and profitability

Trade exhibitions and fairs are the best places to interact with a large number of manufacturers and discuss your plans in detail. You might, however, post your ideas on the net and invite interested manufacturers to a discussion.

Conclusion
The outsourcing of the entire manufacturing process is now considered by many companies as the best way to increase productivity and profitability. It allows more time for businesses to concentrate on innovation, marketing and selling. Modern manufacturing methods are also now highly responsive to market trends and can alter production patterns in line with changing customer demand.
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