The relationships between a company and its manufacturers are among the most important in business. As any business contracting with a third party to create a product can tell you, if you are not working with a good quality manufacturer, it will spell major problems down the line.
The variance in potential quality outcomes can be huge from manufacturer to manufacturer but spotting a good quality manufacturer isn’t always easy to do. It is easy to be fooled by shiny machinery, low prices, and flashy talk. If you know the right elements to look for when evaluating a manufacturer, though, finding a high quality one is not that difficult.
Several elements of the process and the relationship need your attention more than any of the others. If these elements are on point for a manufacturer, they will most likely be a good quality company. If any of these are off, you may be playing with fire. To help you identify the most important elements to study, here are six signs that you are working with a high quality manufacturer.
Track record of on-time delivery
One of the first factors you need to see in a good quality manufacturer is that they have a history of delivering their goods on-time. Delays in manufacturing can be a killer for businesses. Failure to consistently deliver products on schedule can lead to lost revenue, lost opportunities, and can hurt a businesses’ reputation. If a manufacturer can’t regularly deliver on time, it will hurt your business.
Circumstances will always arise and cause delays in manufacturing, but the more you can avoid these pitfalls, the better. A manufacturer may miss a delivery date once or twice but if there is a pattern of late production runs or delivery, that is a bad sign. Look at their schedule performance and you’ll start to get a sense of the quality of their processes.
Knowing How to Stay on Budget
Many businesses that work with manufacturers to produce their products work within very slim profit margins. If any of the steps along the way, from conception to retail, go over budget, it can throw these margins off and quickly turn a profitable venture into a losing one. A vendor regularly going over budget is a sign that it is not a high-quality manufacturer.
As with on-time delivery, there may be occasional exceptions to this rule, too. However, it is the track record of meeting or exceeding budget goals that you should note. You don’t necessarily want your manufacturer to constantly come in under budget, either (although it may be a nice treat occasionally). If the manufacturer isn’t regularly hitting its estimated costs, this is a sign it is not as tuned-in to its processes as it should be.
Adherence to GxP
Good practices (GxP) are a set of guidelines put forth for a manufacturer to follow to ensure quality assurance for industries that deal with sensitive products. These policies are meant to protect the health and safety of consumers who may not otherwise be able to verify the safety of a product after it has been manufactured. Industries that work in accordance with GxP include pharmaceuticals, food, medical devices, and aerospace, among others.
Not adhering to GxP can cause major problems for manufacturers, including fines and shutdowns. For the companies that hire manufacturers that don’t adhere to these standards properly, the problems can be even larger and include massive recalls or class-action lawsuits. If your industry is governed by GxP, investigating a manufacturer’s use of these practices is critical. Dickson has a thorough guide to GxP if you’re interested in learning more about the subject.
Not a lot of Overstock
Almost nothing leads to more frustration for sellers than when unsold inventory builds up in warehouses. It is expensive to store and, if it ultimately goes unsold, can lead to huge losses. This is why you want to work with a manufacturer that will get you the inventory you need, when you need it, and not leave you stuck with a ton of overstock.
The manufacturer/ seller relationship is one that needs to be based on trust. You need to know that your manufacturer has your best interests in mind and is not just trying to force a large amount of a product down your throat to pad its pockets. Look at how a manufacturer helps you responsibly manage supply. Some companies will even offer buybacks for overstock. This shouldn’t be necessary from the best manufacturers, though, because they are unlikely to stick you with a ton of overstock.
Some of the signs on this list may be harder to spot or take a little deeper investigation to uncover. One relatively obvious sign you are working with a good quality manufacturer is the overall quality of the products they supply.
If you are almost always getting high-quality products that look good to you and you receive few to no complaints from customers, that is a sign the manufacturing is spot on. It usually means the manufacturer adheres to quality assurance procedures and guidelines and that they sample and test products coming off the line so they don’t send out products with defects. Simply put, consistently high-quality products equal quality manufacturing.
Open communication between a manufacturer and its clients is the key to establishing a high quality, collaborative relationship. If the communication stops after a manufacturer takes an order and you don’t hear from them again until the next order is placed, that is a bad sign.
Regular updates and check-ins from the manufacturer are a good sign. It means they see themselves as a partner in your business, not just one vendor among many. Open communication can even relieve stress around many of the signs above if something goes wrong. If a manufacturer has to deliver late or over budget or delivers a bad product, you want a manufacturer that communicates why it happened and why it won’t happen again.
Working with a good quality manufacturer should be a huge goal for any business that uses a third party to make products for them. When a manufacturer delivers quality products on-time and on-budget, adheres to GxP when necessary, and doesn’t stick you with overstock, you are probably dealing with a high quality company. That, is worth its weight in gold.