Every company wants to improve their bottom line and share holder value. Outsourcing is a hot topic nowadays to achieve this goal. Main reasons to start outsourcing are focus on the core business, hiring expertise and operating more cost efficiently. This can be perfectly achieved when choosing for toll manufacturing/ custom manufacturing. In this article you read how.
You could start early in the product lifecycle with involving a toll manufacturer. A skilled toll manufacturer is capable to take a project from piloting phase and scale-up to full production level.
5 reasons why companies choose for toll manufacturing:
• “We have a knowledge gap in expertise necessary to scale-up productions”
• “We do not have the specialized equipment required and do not wat to invest in it”
• “We want a short time to market”
• “We do not have enough production capacity or storage”
• “We know meeting regulatory requirements is hard and costly for this product”
Continue reading to discover how it can profit your bottom line.
Next to the cost efficiency argument, there are a lot of other advantages to start toll manufacturing. For example; at this moment you ship your chemical products overseas, a costly thing, probably producing locally at a toller is more cost efficient. Other example; the demand for your product is decreasing, this makes it less efficient to dedicate your own production plant to it, but you still have an acceptable demand for the product. This is mostly the last phase in the product lifecycle. Instead of making the decision to stop or continue with inefficient production levels at your own production plant, toll manufacturing could be your solution to improve the bottom line. In the start up phase of a new product the same reasoning could apply, when volumes are still relatively low it could be interesting to use a toll manufacturer, in the mid section of the product lifecycle when volumes increase you could do it at your own plant.
Other advantages is that because of the experience a toller is able to produce at a much higher quality and consistency.
Market for Toll Manufacturing
The market for toll manufacturing continues to grow, key segments with growth are the fine and specialty chemical industry. Market research of AD International indicates that a short time to market, financial advantages (less capital costs and more efficient production) and focus on the core business are top drivers for outsourcing to a contract manufacturer.
To summarize, toll & custom manufacturing and repackaging services can provide your company with the opportunity to decrease costs, increase profits and offer better products to your customers to improve long-term business relationships. Using it strategically in your product lifecycle it can definitely improve your bottom line.
One last side note to mention. When considering toll manufacturing, it is important to see it as a partnership. The toll manufacturer should offer you confidentiality, reliability, regulatory expertise and timely production deliverables. Signing a non-disclosure-agreement (NDA) is common practice.
AD Productions B.V.
Interested in to know more about how toll manufacturing could improve your bottom line? AD Productions, based in the Netherlands, is a strategically located toll services company close to the port of Rotterdam and Antwerp. Contact AD Productions today via contact , by phone at +31 (0) 167 526 900 or visit our tolling and blending services page.