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Red flags, pitfalls when selecting a contract manufacturing partner

It’s up to brand owners to find the right contract manufacturing partner that will supplement its business, not cripple it.

Staying apprised of potential red flags can help brand owners navigate the process of choosing a contract manufacturing partner.

According to Heather Fairman, independent contractor at EAS Consulting Group, “previous FDA 483s and warning letters are the biggest red flags.”

Per Kurt Schneider, president at Tech Bridge West, an absent quality department is a no-go. “When I ask, ‘Who’s your quality department?’ ‘Well, our production manager oversees quality.’ ‘OK, what about a quality person?’ ‘No, that’s the production manager.’ If you don’t even have that baseline, that’s a stop. That’s a red flag.”

Brand owners also need be wary of contract manufacturers that can’t provide cost figures up-front, he said. “Obviously for a smaller start-up or a ‘solo-preneur,’ maybe even a $10 million or less company that’s looking for contract manufacturing, cost is going to be a huge consideration. But one of the red flags is that there’s no discussion of cost right up-front.”

A good contract manufacturer, he said, should be able to provide the cost structure for a product similar to the product at hand. “They should be able to lay that out for you,” he said. “And actually, before you even get going, they should be able to give you a firm quote on the business. Now that can be done through pilot trials they do at their facility that they do at their discretion. They can do that. Never, ever, ever let them cost a product based on the first production run. That’s a recipe for paying more than you need to for your product.”

In some cases, a contract manufacturer could offer to source raw materials for the product to procure them at a cheaper cost, Schneider explained. “They might be able to do that, but it might not be the quality you’re looking for, especially if it’s a critical raw material…Having control over your raw materials supply is very important. You dictate where they should buy their raw materials.”

This is an excerpt from the article “Selecting a contract manufacturing partner.” To read the complete article, download INSIDER’s contract manufacturing digital magazine.

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