An effective way for any startup company to control production costs is to use a contract manufacturer. These are specialized companies that assume the role of manufacturer for parts, components, or entire systems.
When choosing contract manufacturing services, it is critical for a startup company to think both immediate needs as well as potential growth and production volume requirements. Matching the current and future needs with the capacity of the contract manufacturer is important not only for production but also to ensure your company gets the best cost per unit for production.
Not all contract manufacturers are designed to offer services for small startup companies. While the large volume order contract manufacturers typically offer the lowest cost per unit for production, they are simply not set up to work with small volume orders.
In addition, working with a contract manufacturing services that cater to high volume orders may mean your smaller volume order is a lower priority. This could mean a higher risk of delays in order delivery or greater challenges with supply chain issues.
Specialized Industry Expertise
Most of the best contract manufacturing services specialize in industrial sectors. This may include medical device manufacturing, devices for the telecom and energy industries, or even specialized production for military and defense.
Other contract manufacturers work across multiple industries, with specialized teams and services offered within those industries. This is often the best option for a startup, as it provides a contract manufacturer with experience and expertise to work through potential problems and challenges by tapping into past experience and projects for industry leaders.
In addition to the actual service required in the form of manufacturing of the part or component, think about value-added or secondary services. Engineering services specialize wiring harness design and production, assembly and other factors can all be effective options to outsource to a contract manufacturer.