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Intuition, Research Required in Contract Manufacturer Search

Thomas Tierney

August 22, 2011

2 Min Read
Intuition, Research Required in Contract Manufacturer Search

Just like the search for treasures, an abundance of secrets, happy surprises, frogs, and things that go bump in the night wait to be discovered behind the title “custom nutritional manufacturer." One size does not fit all.

The sourcing adventure can be made simple if you have reasonable clarity about your formula and product fulfillment requirements. A good litmus test is to make some basic decisions about your appetite for risk. Do price, quality or formulation skills prevail?  Why not all?  (A good first test is to do a web search for actual licenses: FDA, NPA GMP certification and a specific history of any regulatory or legal issues. The absence of high-level licensure or the presence of business issues is not necessarily disqualifying, but provides a background for any future relationship. )

The rubber hits the road with capability. A firm with good experience in powders and tablets is perhaps not your choice for liquids. Similarly, a strong two-piece capsule vendor may not be skilled at powdered drink flavor technology. Ask if your candidate manufacturer also sells branded products in the sales channel you intend to use. Will this firm also be a competitor? The simple solution is to ask where strengths prevail and if client referrals are available.

A tour of manufacturing facilities, even for an inexperienced dreamer, tells a tale. Your intuition will speak to you about attitudes, professional dress, floor cleanliness, and pride. It’s amazing about intuition; it’s usually spot-on regarding relationships. Another great litmus test is to discus QA and QC procedures and the staff's professional qualifications. The presence of in-house analytical laboratory capabilities should provide some measure of security. Ask if testing for heavy metals and herbal identification is on-site. How much analytical work is done by third-party contract? This may lengthen delivery time while awaiting results. The expression “deep pockets" comes to mind in assessing product liability. Early in any discussion, you want to determine if you will be covered by product liability insurance. Ask for a copy of the insurance binder, and give this to your own agent for review.

Let’s get back to your intent. If you are a commodity buyer with established formulas, a strategic production relationship with a firm capable of the output scale you require is easily determined: ask, look, get referrals.  On the creative side, if you have a need for innovation, regulatory feedback, and R&D services, it is best to see what level of participation a candidate company will offer and what charges might be for such services. These capabilities are usually not free unless the business upside warrants an investment by the manufacturer. If you pay for R&D services, do you also want to own the formulas thus developed?  

Answers to these questions will put you on the path to being a true decision-maker in the manufacturer selection process. Business should be conducted by informed choice, not default. 

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