Issues Involved in Contract Manufacturing
01/06/2003

Issues Involved in Contract Manufacturing
The following Q&A was conducted with several industry
executives who commented on the benefits of contract manufacturing, as well as
the issues that are involved in light of increased homeland security and the
pending federal GMPs.
What are the most common reasons your
customers choose to work with a contract manufacturer?
Gary Bennett, marketing manager, National Enzyme Co.:
There are a number of reasons to work with a contract manufacturer. Using the
services of a custom manufacturer relieves you of the great financial
responsibility of acquiring and maintaining a manufacturing facility, cost of
equipment and personnel, or large insurance premiums, not to mention the
increasing role of government and regulations being implemented. The main
benefit of using a contract manufacturer is that it allows you, the marketing
company, to do what you do best: market and sell products.
M. Amirul Karim, president, NHK Laboratories Inc.: Our
customers use a contract manufacturer because it makes operational and economic
sense. They don't want the headache of owning and operating a manufacturing
facility, so they partner with companies like us instead.
Jay Kaufman, president, Paragon Laboratories: The most
common reasons include that the customer's expertise is limited to the marketing
of dietary supplements, not the manufacturing of dietary supplements. Even if
someone does have the capability to manufacture dietary supplements, they may
not have the expertise to manufacture a particular type of supplement, or it may
not be economical for them to manufacture the supplement in question.
Robin Koon, vice president of sales and marketing, Best
Formulations: There are two primary reasons our customers choose to use a
contract manufacturer: 1) they do not manufacture any products at all and need
someone to make it; and 2) they are a manufacturer but are unable to produce
some specific item that we are able to make (i.e., softgels).
Jerry Rayman, vice president of sales and marketing, PAL
Laboratories Inc.: The most common reason is probably flexibility--the fact
that they can take advantage of our resources instead of investing themselves,
and as a result, they can be flexible in the delivery systems that they use for
their products. And, our customers can avoid going through the expense of
changing formulas--that becomes our expense.
Michael Schaeffer, president and chief operating officer,
Pacific Nutritional Inc.: The primary reason for using a contract
manufacturer to produce dietary supplements is a fixed inventory cost/price for
a wholesale/distribution/marketing company. Contract manufacturers absorb all
variable costs in the product related to material sampling, formulation
overages, production loss, and laboratory tests for stability and quality
assurance.
Tina Seals, marketing specialist, Capsugel: There are a
variety of reasons our clients choose to secure contract manufacturing services.
With traditional two-piece gelatin and vegetarian capsules, customers sometimes
encounter difficult-to-fill (sticky) compounds. In order to increase
productivity, they seek out assistance from contract fillers. Other reasons
dietary supplement companies outsource some of their manufacturing needs are
related to seasonal or unexpected spikes in demand, which do not support capital
investment in manufacturing equipment. Other clients realize they have not
optimized manufacturing operations and, stated quite simply, the overall cost of
goods is cheaper when outsourced.
Capsugel also offers in-house formulation and manufacturing
support for our Licaps product line, developed specifically for liquid and
semi-solid formulations. Clients commonly seek out our services for development
of liquid and semi-solid compounds because our technology, when compared to
other liquid technologies, frequently drives product to market much more quickly
and offers the allure of unique product positioning for the marketplace.
Greg St. Clair, vice president of sales and marketing,
Arizona Nutritional Supplements: The most common reason is customers are
marketing entities, not manufacturers. They know how to sell and market, whereas
it is our business to manufacture for them. Another reason is the seed capital
or investment to build a facility with the proper equipment and staff, and then
service and maintain with GMP status and quality always in mind.
Jeffrey A. Stallings, president, Merical Vita-Pak: Our
customers choose Merical Vita-Pak because we offer packaging expertise and
economies that they could never achieve on their own. We possess unique
equipment and human capital that our customers can't easily replicate.
Ron Udell, president, Soft Gel Technologies Inc.: Many
times, our customers are looking to create unique specialty products that can't
be bought off of shelves. Whereas many manufacturers will offer commodity code
products with standard and readily available formulas, a contract manufacturer
will give the client the opportunity to create something uniquely theirs.
Fred Wehling, president, Amerilab Technologies Inc.:
Typical customers for a contract manufacturer are broken into four categories:
1) the customer who does not manufacture finished products at all, and only is
interested in the marketing of a given product; 2) the customer has capabilities
of manufacturing several dosage forms but lacks the technology for a specific
type of product, and is unwilling to invest the time, equipment and opportunity
costs associated with learning a technology that is currently not part of their
internal expertise; 3) the customer simply does not have the capacity to produce
the quantities of product needed for ongoing sales, or wants a second source as
a buffer for increased capacity; and 4) the customer is interested in a product
that is only available through a license, due to patents or trade secret
technology that the contract manufacturer holds.
Greg Williford, vice president of sales and client services,
Vita Tech: I think probably just bullet points: quality, price, reliability.
In this evolving regulatory environment, you simply have to have confidence in
the people you work with as far as their ability to keep you safe, to be a layer
of protection between you and people who want to get you. So, at least as far as
we're concerned, that is a very important point with our clients: They simply
have to have confidence in our ability to make a product that is going to be as
we say it is.
Rezaur R. Yousuf, director of business operations, Kabco
Pharmaceuticals Inc.: The customer can avoid the high cost of capital
expense involved in setting up a manufacturing facility, gains access to custom
formulation and has access to a quality finished product supported by all
technical documentation.
What are the benefits of hiring a contract
manufacturer?
Karim: There are several benefits to outsourcing
manufacturing. To construct and operate a GMP-compliant manufacturing plant
costs several million dollars. In addition to the capital expense of buildings
and equipment, you must employ qualified personnel, which becomes a costly
operational cost. By hiring a contract manufacturer, you get all the benefits of
a manufacturing plant but pay a fraction of these costs.
Kaufman: It allows the marketers the benefit of
concentrating their limited resources on marketing finished products to
consumers. These resources include both time and money. Additionally, the
contract manufacturers' vast experience with developing different finished
products may allow for a quicker start-up of introducing a new product to
market.
Mitchell M. May, Ph.D., chief executive officer, Synergy
Production Laboratories: When you hire a contract manufacturer, you are
hiring expertise and equipment. The contract manufacturer has already made the
investment in training and equipment, and focused its resources on the
production process. This allows contract manufacturers to have a greater level
of expertise than most manufacturers.
Rayman: Gaining the expertise without having to hire it
yourself. Expertise in formulation, expertise in manufacturing.
Schaeffer: For brand-new companies, the advantages
include utilizing the expertise of the contract manufacturer for product
development and packaging design. For companies that are two to three years old,
the advantages include assistance in refining formulations to improve product
integrity. For older companies, the advantages include the coordination of
contractual deliveries of products.
The secondary advantage of using a contract manufacturer is to
utilize the volume purchasing power of the manufacturer. Since the contract
manufacturer produces products for numerous companies, the manufacturer's
ability to receive lower material costs is greater than what most companies can
receive if purchased directly.
Seals: To increase productivity, to support seasonal or
unexpected spikes in market demand and to reduce investment in capital equipment
investment for companies that may not have optimized manufacturing operations
internally.
Josh Seow, sales representative, Tradimex Equipment &
Supply Inc.: A customer can benefit from using a contract manufacturer if
the contract manufacturer has a clean, organized and well-managed facility, uses
GMPs in each department, and is willing comply with all FDA rules. This gives
customers a chance to focus on selling their product. When their sales are up
and money is coming in, customers can then look to buy a few pieces of equipment
and slowly start into manufacturing while still using a contract manufacturer to
keep the product moving.
St. Clair: When you hire a contract manufacturer, you
eliminate your concern about overhead and all the business aspects of
production. Those aspects can become quite expensive and cumbersome.
Stallings: Customers are better able to focus their time
and resources on marketing their products, while Merical Vita-Pak can engineer a
filling or packaging system that makes the best economic sense. It creates a
win-win situation where both organizations can work to their strengths.
Udell: The ability to work in concert with the marketer
to come up with something special. With such a crowded field of supplement
re-sellers, the company that sets itself apart is the company that creates new
marketing avenues and new growth opportunities.
Wehling: Typically, a contract manufacturer should
provide: 1) shorter lead times; 2) an extension of capacities; and 3) expertise
in quickly developing a product and placing it into production. In addition, the
customer does not have to invest in equipment, personnel, warehousing or raw
material inventories.
Yousuf: Customers can selectively choose products based
upon their marketing needs without incurring R&D cost. Most contract
manufacturers do R&D for reliable and steady customers. The responsibility
of the product's quality lies on the contract manufacturer and, therefore, the
customer has the ease of mind. A good manufacturer will only choose quality
ingredients to make the products and, therefore, not compromise on quality.
What are some common misconceptions regarding
a contract manufacturer's capabilities?
Bennett: That all contract manufacturers are the same,
and that they all operate and offer the same service. Also, that all contract
manufacturers are cGMP-certified and have the same level of quality control.
Kaufman: One issue that comes to mind is: What is the
extent of their quality control capabilities? Do they have an in-house
laboratory that provides analysis to confirm the quality of raw materials and
the content of the finished product, or do they just accept the raw material as
it is labeled and compound the product from there, hoping the finished product
turns out right?
Koon: They are too expensive; they use the cheapest raw
materials; they don't have R&D; they don't test products; you can't trust
them. These, of course, are not really accurate. There are all kinds of
manufacturers.
Rayman: I don't know that there are any misconceptions,
not for a quality contract manufacturer. We should be able to do everything for
our customer. We try, personally, to be a turnkey operation for our customers.
Schaeffer: The most common misconception is the amount of
time required to produce a product. It is often overlooked that contract
manufacturers need time to acquire components, process quality control
analytical data (i.e., microbiological results, potency, purity), and process
and inspect the product. Other misconceptions include: it is often thought that
if one facility can produce the product, all facilities can produce the product,
and that the marketing companies' technical department can always produce
formula specifications that can be manufactured and/or taste to their
satisfaction.
Seow: Taking a customer's formulas or not being able to
provide all the services that their customer may need. For example, if the
contract manufacturer is filling just capsules for the customer and now the
customer has a formula they want put into a tablet. Customers should first see
if the contract manufacturer they are using want to buy a tablet press and
continue to work with the customers. The contract manufacturer wants to grow and
increase their production volume like any other business.
St. Clair: The biggest misconception surrounding a
contract manufacturer's capabilities is that most customers assume we carry or
have our own line of products, which we do not.
Stallings: Most customers believe that the only advantage
contract packagers have is in their equipment. This is not true--a contract
packagers' real value is in its experience and efficiencies in packaging a
variety of products.
Udell: A common misconception is that because a product
may look the same and come from the same facility, that it is in fact an equal
product. The truth is that the added value of manufacturing something special
with novel ingredients and/or delivery systems can overcome the shortcomings
that a client may not see in a commodity product.
Also, in our business of manufacturing softgels, the most common
misconception we come up against is that anything can be encapsulated into a
soft gelatin capsule. The fact of the matter is that some things are just not
do-able in a softgel format. Our job as a manufacturer is to research and advise
our clients on whether or not a softgel is the right delivery method for their
product.
Wehling: Some misconceptions I have experienced with
companies include: 1) that we have much less knowledge and expertise than we
actually have; 2) that we will copy a product that has been developed
specifically for one of our customers, and sell it to them directly; 3) that we
have the ability to do very small production runs on products for a very
inexpensive price; and 4) that we have unlimited amounts of time for development
of new products specifically for them.
Williford: I think some misconceptions surround lead
times. Some customers think you can build these things in a couple of weeks and
have it out the door as a custom product. Most manufacturers have a couple of
areas of expertise; there aren't too many of them that do softgels, powders,
liquids, ointments and all the packaging. So, sometimes we get calls from people
who believe we do everything under the sun, but that is not normally the case.
Yousuf: Many think that it is very easy to set up a
manufacturing facility and that manufacturing tablets and capsules is an easy
job. There is a whole process to it that involves the best of coordination
between several departments. There are several stages involved in the
manufacturing of a product, and the whole chain has to be extremely well linked.
The simplest of mistakes can lead to a disaster. Most customers do not
understand the various steps involved in the operation.
Are you currently operating under GMPs, and
how do you think the impending federal GMPs will affect your business?
Bennett: Yes we are, and have been for the past 20 years.
In November, National Enzyme Co. received its NSF GMP status. The federal GMPs
will help the industry.
Karim: NHK Laboratories has been NNFA GMP certified since
2001. In addition, we have just completed construction on our new
state-of-the-art packaging and laboratory facility, which was designed to be a
drug establishment. Finally, in early 2003, we will begin renovations on our
manufacturing facility. We are renovating our manufacturing plant to meet drug
standards, which should be complete in mid to late 2003. With pharmaceutical
guidelines in mind, we don't believe the impending GMPs will have a significant
impact on our business.
Kaufman: We are currently operating under the NNFA's
proposed GMPs for dietary supplements, which are much more stringent than the
ones currently in place and parallel food GMPs. We feel confident that we can
respond quickly to the new GMPs once they are finalized.
Koon: We are FDA drug licensed, NNFA cGMP-certified and
kosher-certified, and have TGA certification pending. For us, any kind of FDA
certifications have already been met. However, I still think it will be quite a
while before FDA mandates or enforces GMPs for most nutritional manufacturers.
May: Yes, we are already operating under GMPs and have
been for some time.
Rayman: Yes. As a company, we look forward to the
implementation of federal GMPs. We think it's important that the industry have
GMPs, and get rid of some of the less-than-reputable contract manufacturers that
are out there.
Schaeffer: We currently operate using GMPs and have no
worries about the impending FDA GMPs. We do not foresee the FDA imposing
stricter GMPs for dietary supplements as compared to OTC facilities.
Seals: Capsugel is cGMP-certified and manufactures all
products in pharmaceutical-grade facilities.
Seow: I think all manufacturers should use GMPs and try
to comply with all FDA regulations. It is the customer's responsibility to visit
the contract manufacturer's facility to make sure they have GMPs in place.
St. Clair: Yes, we have two GMP certifications: NNFA and
NSF. We have been working very closely with these two institutions to ensure
that if--and when--FDA issues final regulations, we will be in a good position
to make small changes.
Stallings: Merical Vita-Pak maintains drug licenses with
the state of California and FDA, and was the first contract packager to receive
NNFA's GMP certification. We encourage FDA to adopt a set of GMP guidelines for
the nutritional industry because Merical Vita-Pak is already operating under
strict FDA standards, and we feel this will greatly increase our sales volume.
Udell: Yes, we are, and have been since our plant opened
in 1995. I think the impending FDA GMPs will better level the playing field, as
well as raise the bar for all participants in our industry by establishing
minimums that all companies will be required to operate by. Likewise, it will
challenge us to stay one step ahead of the competition because we already abide
by the pending FDA GMPs and look forward to improving our quality systems and
processes even further.
Wehling: We are currently operating under GMPs, as we
grew out of a pharmaceutical business into the nutritional products area. We do
not think the impending GMPs will affect our operations at all, unless the
proposed regulations are a significant departure from GMP regulations outlined
in CFR 21, Part 211. Currently, the concept of GMPs for the majority of
nutritional manufacturers is somewhat of a misnomer. There is not a recognized,
regulated agency that has the ability, or the desire, to inspect nutritional
product manufacturers. The current GMP label is very loosely interpreted, with
all companies claiming to operate under GMPs. This is a fairly simple statement
to make, since FDA has no jurisdiction over inspection of production facilities.
Williford: Oh yes, absolutely. We have state and federal
drug manufacturing licenses, the NNFA GMP certification, and we've been audited
by USP and Shuster. As a practical matter, most of the large clients in the
industry have an audit team. So even though you may not have regulatory
licenses, sometimes the toughest scrutiny comes from your client's audit team
and QC people as opposed to state or federal regulatory agencies. It will not
affect us because we actually comply with all of those right now. But I can tell
you that it will probably force some people out of business or make them change
the way they do things. It's quite clear the evolution of this industry is
toward pharmaceutical standard manufacturing; eventually it will be one and the
same. We saw that coming about six years ago and have responded accordingly.
But, for people who have not done that, it's going to be very tough to catch up.
Yousuf: Kabco is currently operating under strict GMP
guidelines. The implementation of FDA's GMPs, while they shall be adhered to,
might induce a rise in cost that may eventually reflect on the product cost.
What challenges have you faced in light of
increased homeland security measures?
Karim: Despite the increased government involvement in
import/export issues, our international business remains healthy.
Kaufman: The only issue that we have come across was a
request for confirmation regarding what the application was for one of the
ingredients we were dealing with. Other than that, the only issue that
temporarily held up the flow of goods was the dock workers' strike on the West
Coast.
Koon: There has been a slight increase in the time it
takes to import and export items.
Schaeffer: We have reviewed our material supply
requirements and, when necessary, have entered into contractual agreements to
secure and maintain a steady flow of materials.
Seals: Capsugel has taken extra steps to help ensure
product security for our customers and their consumers. We have made our
customers aware of the security enhancements made in the last year and a half.
St. Clair: We have implemented many security measures in
our facility and how we do business. One item of concern was receiving outside
materials from other countries; therefore, we will not receive any material
unless it has a wire tag that has not been broken or tampered with, and we send
out all products with security tape as an added measure.
Udell: The biggest hurdle we have run into in light of
the increased homeland security measures is sometimes clearing raw materials
through customs. Many times, what used to take days now sometimes will take
weeks, and that increases the challenge to deliver finished goods in a timely
manner.
Williford: There have been three or four specific
instances. In some cases, there have been delays in getting some raw materials
through customs. Certainly, many clients did not previously ask for specifics on
security, access to the production site or computer security--those questions
are now being asked. They're also asking for contingency plans in the event of
transportation systems being disrupted or power plants blown up or something
like this. Raw materials is one area, and plant security and computer security
are others. They want to see written SOPs [standard operating procedures] as far
as the contract manufacturer's security procedures. Most larger clients have now
specifically requested SOPs addressing those areas.
Are there any particularly hot ingredients or
categories at the moment?
Karim: The year 2002 was full of hot ingredients,
including Relora, Phaseolamin 2250 and coral calcium. In addition, due to
the controversy surrounding ma huang/ephedra, many of our customers have
switched to synephrine-based products, which have the same thermogenic
properties as ma huang/ephedra formulas.
Koon: Non-stimulant weight loss raw materials and
products--specifically CLA (conjugated linoleic acid).
May: Camu camu berries from the Amazon rainforest are
very hot. These berries are the richest known source of natural vitamin C. Camu
concentrate makes it possible for a manufacturer to offer substantial amounts of
vitamin C in just about any product without adding ascorbic acid.
Whole food nutrition is also growing rapidly. Natural products
customers want whole, natural products--not fractionated or synthesized
compounds. We are seeing this in an increased demand for phytonutrient-rich
superfoods such as wheatgrass, beet and carrot juices, sprout powders, algae,
freeze-dried berry powders, whole herbs and medicinal mushrooms.
Rayman: Nothing much has changed. It's still weight loss.
But we're doing more in sports nutrition than we've ever done before. That seems
to be the growing area. People are beginning to shy away from ephedra, but we
still do some manufacturing with ephedra products. For the most part, most of
our customers are asking for alternatives.
Schaeffer: Since the report that multivitamin/mineral
supplements are beneficial for all adults, our production levels for these types
of product have dramatically increased.
Seals: Reformulation requirements for weight-loss
products is one "hot" category presently. For our Licaps line of
products, fish oil derivatives are becoming increasingly popular.
Stallings: As a contract packager, we have seen a
tremendous increase in the packaging of powders as a delivery system for
vitamins and other supplements. Sizes can range from a simple 1-gram packet to a
2-ounce meal replacement pouch. Also, we have seen great growth in the need for
secondary packaging (i.e., shrinkwrapping, bundling, cartoning, clamshelling) as
marketers work to differentiate their products in the various retail
distribution channels.
Wehling: I really tend to try to look toward categories
rather than ingredients. Categories generally encompass a broader market base
than do individual ingredients, and individual ingredients are sometimes
difficult to judge with regard to benefits because very few, if any, raw
material companies perform double blind, controlled studies with the ingredients
they sell. A double blind, controlled study performed by an FDA-regulated
clinical laboratory currently costs between $150,000 and $250,000. Most
companies are not capable of, or willing to, spend this kind of money on
clinical studies for a raw material for the nutritional product market.
Categories, on the other hand, are identifiable and trends do
exist. One category that continues to perform well, and is growing every year,
is the market catering to that portion of the population entering the retirement
years. Physicians in the mainstream recognize the importance and benefits of
calcium, magnesium and vitamin D for improving bone density, and more and more,
they are recognizing the benefits of joint supplementation, typically with
chondroitin and glucosamine.
Another segment of the market that is growing and is somewhat
gaining credibility is the "anti-aging" segment. There is particular
interest in growth factors, growth hormones, glandular extracts, and amino acids
and herbal ingredients that are designed to stimulate brain or other organ
activity.
There are always companies looking to differentiate their
product lines with new dosage forms. Three of these seem to be most prominent in
the last year or so: 1) concentrated liquids that only require a very small
dose, often using a dropper; 2) fast dissolving, or "quick dissolve,"
tablets that can be placed in the mouth and will disintegrate within 20 or 30
seconds so the consumer does not have to swallow water to take the desired
product; and 3) effervescent powders and tablets, which can deliver to the
bloodstream a large amount of active ingredient dissolved in a small amount of
water. These are all highly portable dosage forms, and seem to fit well with
consumers' desires for fast action and convenience of use.
Yousuf: Weight loss still seems to be popular and new
ingredients to replace ma huang (ephedra) seem to be coming up.
What are the primary issues involved in
working with a contract manufacturer?
Bennett: Quality is the most important element of a
product. But quality comes in different levels. You have the high quality that
everybody is looking for, expects and actually demands today in the marketplace.
Then, there are the companies that make products with a "just getting
by" quality. And, there are the plants with the "don't ask don't
tell" policy. These products are never checked, and the seller could be
unsure of quality. Today, the customer assumes that the highest quality is used
in dietary supplements.
Karim: It is best to contact contract manufacturers early
in the product launch cycle, and it is important to notify the contract
manufacturer of your marketing and distribution plans. Several
ingredients/products are not legal in certain states and/or countries, and may
require different labeling. By presenting this information to the contract
manufacturer early, customers can help in the label design and marketing
process.
Kaufman: The primary issues include production capacity,
quality control systems, overall finished product quality, reliability (as far
as turn-around time is concerned), pricing and customer service.
Koon: Honestly? Being paid on time. Late payments affect
cash flow. Seriously, I think the primary issues are related to quality and
timely performance.
May: Experience, quality, integrity and communication. It
is important to select a manufacturer that has experience with a variety of
materials. In this way, the customer won't need to spend a lot of time learning
processes to complete a project or make costly errors when dealing with an
unfamiliar material. The success of a final project depends upon the contract
manufacturer's personnel being experienced and properly trained. For purposes of
quality control, it is important that a contract manufacturer have a
climate-controlled facility--low humidity discourages the growth of microbes, as
does proper air filtration. The contract manufacturer's equipment must also be
compatible with the processes required to produce a product.
It is also very important to choose a contract manufacturer that
shares the customer's commitment to quality. To ascertain this, the customer
must ask questions about the protocols and procedures the contract manufacturer
implements to ensure the safety and efficacy of a product. Solid two-way
communication affects reliability and the success of a production run. There is
much to coordinate in a contract production run to ensure its success. Not only
should contract manufacturers share information about themselves with the
customer, but the customer must be timely and responsive to the manufacturer's
requests. It is not uncommon for companies to delay returning calls or providing
pertinent information, samples or materials to their contract manufacturer. This
can disrupt an entire production schedule and lead to frustrating delays.
Rayman: Clarity of desire. If a customer can give us a
clear, concise picture of what they want, then that's exactly what they'll get.
Seals: When working with a contract manufacturer, one
must take great care to make certain that all of the raw materials used in
manufacture of the product are equal or superior to the quality of the active
ingredient.
Seow: Again, the customer needs to visit the contract
manufacturer's facility--often--to ensure products are being manufactured
accurately and ethically, the way the customer would like. The customer that
sells the products has to know what's in the bottle, and that what is printed on
the label is accurate and is safe for consumption. It's the customer's name on
the line!
Stallings: The biggest challenge for any customer is to
identify with the packager what service the customer requires. This involves not
only the look of the finished product, but the quality, pricing and delivery
schedules.
Udell: Knowing up front what your expectations are and
making that clear to the manufacturer. At SoftGel Technologies, we take a
special pride in being a hands-on, full service manufacturer of custom softgel
formulations. As with every relationship, however, it is important for all
parties to communicate clearly what their goals and expectations are, so as to
avoid unnecessary conflicts or missed deadlines.
Wehling: Issues that customers of contract manufacturers
face are: 1) Does the contract manufacturer have the proven development
capability that is needed? 2) Is the company really capable of delivering the
product desired in the quantities and of the quality expected? 3) Does the
contract manufacturer have a good reputation in the industry? 4) Does the
company have personnel that can fully support the customer? and 5) To what level
of service can the contract manufacturer deliver to the customer (i.e.,
development, quality control, package design, production, packaging, shipping,
etc.) ?
It is much more efficient for the contract manufacturer to work
with one or two designated individuals within the customer's company, provided
those individuals have the responsibility and authority to fully control the
project that is undertaken.
Williford: From the client's perspective, I would think
some of those items that we touched upon briefly to begin with. That would be
their QC procedures, their track record, do they have a drug license or not,
actually going to see the facility--it's amazing how many people will just call
up and order something and never take the time to see if you're actually working
out of a post office box or not. Customers need to take some time, do some
homework and investigate the manufacturer.
Yousuf: Some customers want the best quality product at a
cheap price. This combination is sometimes not possible to provide.
There are times when customers do not understand the entire
manufacturing process and, therefore, expect their orders to be filled within
five days of issuing a purchase order. This can be an unreasonable demand at
times.
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