Pros & cons of using a contract manufacturer or contract packer
The pros and cons of using a contract manufacturer or contract packer
A contract manufacturer (CM) or contract packer (CP) specialises in the manufacture or packaging of products for clients to their specific criteria.
The facility of the CM or OP therefore also needs to comply accordingly to the standards as set by the authorities for these industries before it should be allowed to present its services to potential clients, explains Dr HG du Plessis, CEO of both Bioearth Manufacturing and Easypack Packaging.
This is a very costly exercise for the CM/OP but, in turn, assures the client that his product will be manufactured and packaged according to the rules and regulations as prescribed by the regulating bodies, while also allowing the client his inputs to his specific needs.
‘This can be a one-stop service for the client where companies like BioEarth Laboratories and its sister company Easypack Packaging (who are both ISO 22716 accredited and, together with Prime Products, are the only facilities in South Africa with this accreditation) assist with formulation, samples, manufacturing, packaging material, packaging of the product — whether tubes, bottles, tubs, sachets, pouches etc, packed into display-, inner- and outer boxes ready for dispatch to the clients warehouse.
‘The above activities by the CM/OP therefore allow the client to focus on his core business like marketing, distribution and building the brand name. In addition, it saves the client the cost of upgrading his facility to comply to OMP standards, operational expenses and also the worries of downtime due to equipment failure, shifts in raw material costs, product delivery in time, labour- related problems and, for new products, the headache of sourcing quality raw materials and reliable suppliers,’ says Du Plessis.
‘Since manufacturing and packaging is the core business of the CM or OP, they usually have a good overview and relationship with most reliable suppliers of quality products. This is also to the benefit of the client, since orders for certain raw materials from different clients can coincide, which leads to bulk purchases by the CM/OP that can be passed on to the client, and thus lower cost to the client. This allows the client to sell the goods at more competitive prices, which can result in growth for both companies. A further positive for the client is that he receives a quality finished product without the negatives of possible production problems and/or non compliance of batches that are for the cost of the manufacturer’.
It could be said that the CM or OP can take full control of the client, but this should not be seen as a problem when teaming up with your ‘partner’, and by having sufficient contracts in place, your ‘partner’ will have peace of mind. A healthy relationship, built on trust and integrity, should exist between the CM/OP and the client to always have a win-win situation to ensure growth for both companies.