The nutritional industry is one of the fastest growing market segments in the world, and myriad dietary supplement products are available to today's consumer. Because of the technical specialization, high up-front capital requirements and stringent regulatory environment, most companies choose to outsource the manufacturing of their products to an experienced contract manufacturer (CM). However, the high number of manufacturers in the industry makes it essential to perform due diligence in selecting a strategic partner and valued vendor.
Contract manufacturing can be defined as a manufacturing company generating products or goods under the brand name of a different company. Contract manufacturing is sometimes called private label manufacturing. While CMs are often considered suppliers, there is an essential point of differentiation between being simply a supplier and contract manufacturer: a CM delivers a finished product while a supplier delivers components that will be assembled into a product elsewhere. As such, CMs are an integral part of the supply chain, so it is important to interview and examine them and feel comfortable when choosing a company that fits your needs.
Key Points to look for:
- Ethics and Trust
- It’s important in today’s business world for a company to align itself with business partners it can trust. An organization’s culture sets the guidelines and standards of decision making and applies to all aspects of business conduct and the conduct of the individuals in that organization. CMs have access to products and formulations from a number of companies, and it’s important they have high ethical standards of confidentiality, otherwise you may see your product with a competitor's label on it. One thing to look for is whether the CM easily drops the names of its customers or products it makes, which may indicate that it doesn't follow its confidentiality agreements.
- Customer/Sales Service
- Good customer service is the lifeblood of any business. The essence of good customer service is forming a relationship that a customer trusts and can depend on. It's been said that customers don't buy products or services; rather, they buy good feelings and solutions. Additionally, it is important the CM has good communication and is responsive. These are keys to achieving customer support and satisfaction.
- Knowledge and Experience
- Albert Einstein said, “The only source of knowledge is experience." Seemingly, a no-brainer, but knowledge is really a company's greatest asset. New industry regulations (GMPs [good manufacturing practices], lab testing, etc.) present significant challenges, and experienced CMs are in the best situations to help brand owners navigate these changes and achieve success with their products. A qualified company is familiar with the most-common mistakes nutraceutical companies can make—and can competently avoid them. They can offer solutions that surround the development and manufacture of a dietary supplement.
- R&D/Formulation
- A research and development department (R&D) is where new products are created, and is responsible for creating innovative new products and technologies to keep companies a step ahead of the competition. Many companies also rely on the R&D department to improve existing consumer products, and to explore new technologies and ways of producing them.
It is critical the staff has the knowledge and experience of nutritional, biological and manufacturing science so they can support a company from conducting formulation services, sourcing raw materials, providing technical consultation, creating new products, facilitating pilot runs and supporting manufacturing.
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