Best practices for successful contract manufacturing

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The above strategies provide a solid foundation. As solid as they are, they are just the beginning. At every stage of your contract manufacturing, several things can go wrong. Here are some of the best practices that organizations follow to avoid pitfalls down the road.

Identify bottlenecks
Most contract manufacturers have bottlenecks in their process. For example, one may have the capacity to bake 100 cupcakes per minute, but if they can only package 3 per minute, their total production is only three—a bottleneck.

When evaluating suppliers, inspect the entire process and be aware of potential bottlenecks. Analyze your plans to eliminate them.

Protect your intellectual property
In contract manufacturing, you'll be sharing your proprietary knowledge in the form of requirements and specifications. To start, share only what the contract manufacturer needs.

However, if you choose a supplier for end-to-end production, the manufacturer will know your vp audit email list ingredients, your recipe, and your distribution strategy. To prevent misuse of this knowledge, draw up procurement contracts with severe penalties for non-compliance.

Create backup
Remember how manufacturing hubs around the world were forced to shut down operations almost overnight? Global supply chains were devastated as a result. One of the key reasons is that organizations had no backup manufacturers anywhere else.

To avoid risks of large-scale disruption to your supply chain management, it is prudent to have a diverse set of contract manufacturers, even if it means a little more logistical overhead.

Think ahead
All contracts have an expiration date, when they must be renewed. This is a great opportunity to review performance, renegotiate terms, resolve conflicts, etc. So think ahead about contract renewals.

Set up your contractor management software to alert you when it’s time for renewal. If you use ClickUp for contractor management, you can set up an automation to alert you 30/60/90 days before the contract expires. When the time comes, use contract renewal templates to keep track of the expiring contract. Take the time to proactively evaluate and renew the relationship.