McHone Industries Blog

9 Contract Metal Manufacturing Considerations for Your OEM Project


Contract metal manufacturing is more than a business deal - it's a partnership. It may be tempting to assess contract vendors based on face value alone, but that can cause more problems than it solves. 

Because contract manufacturing is a long-term commitment, vendors need to be vetted carefully. Here are 9 things to think about (besides cost).

9 Considerations for Choosing Contract Metal Manufacturing

1.  Geographic Location

What benefits do you get by choosing a local supplier? Just these.

2.  Technical Capabilities

Some contract manufacturers specialize in one or two services. Some offer a full spectrum of services from design assistance to fabrication to finishing and packaging. 

There are pros and cons to single sourcing your OEM manufacturing. It can majorly streamline your supply chain, but you have to choose your vendor wisely.

3.  INVENTORY Management

How does the manufacturer handle material inventory and product stock? Do they have experience in vendor inventory management? Would this help your supply chain?

4.  Quality Control

Depending on the industry, quality control falls on a spectrum of acceptable tolerances.

Some manufacturers are rigorous in their quality control standards and expectations. Others are more lax since the products/applications allow for looser standards (which translates into lower costs for you).

5.  Company Culture

Contract manufacturing is a long-term relationship. Communications are easier when you get along with your vendor, share views on business practices, and have similar values. 

For instance, if your company is all about environmentally friendly production, your best bet is to find a manufacturer who shares those values. Otherwise, conflict can put pressure on your supply chain.

6.  Internal Approval

No matter how much you like a vendor, they'll need to be approved by other stakeholders in your company. Are there any dealbreakers for your peers and superiors?

7.  Mutual Benefits

Obviously, you're getting a high-quality product, and they're getting a valuable client. What else can you offer each other?

Do they have other connections that can improve your supply chain (for this product or another)? Are they interested in expanding their offerings or adding new services that you can benefit from? Are there co-branding or ownership opportunities? Networking opportunities?

8.  Scalability

If you're going to be locked in with one supplier, they need to be able to meet your increasing demand. A vendor that can't keep up will only hold you back.

9.  Long-Term Planning

Your relationship on day one will look a lot different from your relationship in year two.

What sacrifices can be made (on both sides) to ensure solid long-term growth and profit? What building blocks can you lay down now to support long-term success?

Contract Metal Manufacturing Is a Commitment

That's why it's important to find a vendor who fits your company's vision. Think about all of these things, not just upfront production costs.

That's how you'll find long-term success with your contract manufacturer.

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