Contract manufacturing is often called private label manufacturing and refers to an agreement where a firm hires a third-party contract manufacturer to produce products components or a final product.
The Purpose of Contract Manufacturing
Contract manufacturing is a form of outsourcing that allows firms to have their products produced by specialist manufacturers. Third-party contract manufacturers typically specialize in one of the following:
Product assembly
Product design
Product distribution
Product component manufacturing
Contract marketing is a business model that is implemented by many industries over the world, including the technology, medical, pharmaceutical, food, and cosmetics industry.
Benefits of Contract Manufacturing
There are several benefits to contract manufacturing including:
Lower Input Costs per Unit
Since the hiring firm doesn’t produce their products, they don’t need factories and the necessary production equipment. Labour costs are also typically lower, especially if the contract manufacturer operates in a low-cost country like China.
Contract manufacturers are also better suited to benefit from economies of scale, especially if they purchase large quantities of raw materials for several clients. As a rule, the cost per unit decreases as the number of units in once shipment increases.
Mutual Long-term Benefits
Contracts between hiring companies and contract manufacturers that last for years are beneficial to contract manufacturers in that they represent a steady flow of business.
Long-term benefits are also beneficial to the hiring company since the contract manufacturers eventually gain extensive knowledge about the hiring company’s product requirements.
Quality
Established contract manufacturers have extensive quality control policies in place to detect defects or poor quality at an early stage.
Skills and Expertise
The hiring company may not necessarily have the skills and equipment to produce high-quality products from raw materials in a cost-effective manner. One of the most prominent benefits of a relationship with a contract manufacturer is that it allows the hiring firm to take advantage of these skills.
Emphasis on Core Competencies
By leaving production to specialists, hiring firms free their resources to focus on their core competencies and strengths.
Risks of Contract Manufacturing
Lack of Control
By entering into a contract manufacturing agreement, the hiring company forgoes a high degree of control over the production process. High-end contract manufacturers will, however, work with the hiring company to meet their requirements.
Inherent Risks
Outsourcing production or assembly can be risky, especially if the contract manufacturer is in another country. Working with local contract manufacturers may mitigate risks such as long lead times, language barriers, and cultural differences.
Lacking Flexibility
If a hiring company outsources the production of their goods, responding to fluctuations in demand can be a challenge. Lacking flexibility can be particularly problematic if the hiring firm does not constitute a large portion of the contract manufacturer’s business.
In Conclusion
Contract manufacturing is a valuable model for role players in the food industry. If you’re in the food industry, and you want to build on the strengths of your business and need a partner to take care of the production end, head over to Dure Foods to learn more.
https://durefoods.com/wp-content/uploads/2019/02/What-is-Contract-Manufacturing.jpg7201280Dure Foodshttps://durefoods.com/wp-content/uploads/2013/04/logo-2.pngDure Foods2019-02-05 15:15:362019-02-05 15:15:36What is Contract Manufacturing?
Making Those Critical Decisions on Branding and Packaging
As a business owner, one of your primary objectives is to keep your running costs as low as possible. When it comes to package design, you may be tempted to cut corners, especially if the customer will simply discard the packaging after receiving your product.
One of the simplest ways to save packaging costs is to design the packaging yourself. However, depending on your in-house team’s design skills, designing packaging yourself may not be the best idea.
Your product’s packaging is significant, and it can have a real effect on the way your customer views your brand and the quality of your product.
Some of the benefits of hiring a professional to design your packaging include:
Save Time
If you don’t have the necessary skills and experience, designing your packaging yourself can take a lot of valuable time, especially if you have to do research beforehand and if you want to try out different packaging designs.
Handing the project over to a professional will not only free up you up to spend more time on other aspects your business, but a professional designer will typically only needs a couple of days to put an effective design together.
Save Money
Saving money may seem like an unlikely benefit of hiring a professional, but if your product is on the market for several years, getting the package design right the first time will ensure that you won’t have to change it again.
Optimal Value
Something that many business owners tend to forget is that they can pile on the product value with their packaging which, in turn, will allow them to stand out from the competition. Coffee, for example, that is packaged in a decorative tin can, delivers higher value to the buyer than disposable coffee packaging.
Professional packaging designers are usually familiar with the best ways to maximize the product’s functionality with packaging. By designing your packaging yourself, you run the risk of losing out on the opportunity to differentiate your product effectively.
First Impression
Product packaging communicates an expectation in terms of quality and durability. Poorly designed packaging may tell the customer that they may be dealing with a product that is substandard.
A professional package design, on the other hand, will ensure that your customer views your product in a favourable light from the moment they receive it.
Consistency
A high-quality package design will contribute to branding uniformity across every customer-facing aspect of your business. A designer will take existing fonts, colour pallets, and textures into account when designing your product packaging.
Product packaging that is in sync with the rest of your business branding will ensure that your business appears more trustworthy, professional, and memorable.
Some Final Words
If you sell products in the food industry, you really should have a package designer with extensive experience in custom food formulation and private labelling to look professional, and be professional.
Dure Foods offers assistance with high-quality packaging options. Contact us here to find out more about our wide range of services.
https://durefoods.com/wp-content/uploads/2019/01/Should-You-Design-Packaging-Yourself-or-Have-it-Done-for-You.jpg7201280Dure Foodshttps://durefoods.com/wp-content/uploads/2013/04/logo-2.pngDure Foods2019-01-23 11:54:522019-01-23 11:54:52Should You Design Packaging Yourself or Have it Done for You?
What is Contract Manufacturing?
in Business Matters/by Dure FoodsContract manufacturing is often called private label manufacturing and refers to an agreement where a firm hires a third-party contract manufacturer to produce products components or a final product.
The Purpose of Contract Manufacturing
Contract manufacturing is a form of outsourcing that allows firms to have their products produced by specialist manufacturers. Third-party contract manufacturers typically specialize in one of the following:
Contract marketing is a business model that is implemented by many industries over the world, including the technology, medical, pharmaceutical, food, and cosmetics industry.
Benefits of Contract Manufacturing
There are several benefits to contract manufacturing including:
Lower Input Costs per Unit
Since the hiring firm doesn’t produce their products, they don’t need factories and the necessary production equipment. Labour costs are also typically lower, especially if the contract manufacturer operates in a low-cost country like China.
Contract manufacturers are also better suited to benefit from economies of scale, especially if they purchase large quantities of raw materials for several clients. As a rule, the cost per unit decreases as the number of units in once shipment increases.
Mutual Long-term Benefits
Contracts between hiring companies and contract manufacturers that last for years are beneficial to contract manufacturers in that they represent a steady flow of business.
Long-term benefits are also beneficial to the hiring company since the contract manufacturers eventually gain extensive knowledge about the hiring company’s product requirements.
Quality
Established contract manufacturers have extensive quality control policies in place to detect defects or poor quality at an early stage.
Skills and Expertise
The hiring company may not necessarily have the skills and equipment to produce high-quality products from raw materials in a cost-effective manner. One of the most prominent benefits of a relationship with a contract manufacturer is that it allows the hiring firm to take advantage of these skills.
Emphasis on Core Competencies
By leaving production to specialists, hiring firms free their resources to focus on their core competencies and strengths.
Risks of Contract Manufacturing
Lack of Control
By entering into a contract manufacturing agreement, the hiring company forgoes a high degree of control over the production process. High-end contract manufacturers will, however, work with the hiring company to meet their requirements.
Inherent Risks
Outsourcing production or assembly can be risky, especially if the contract manufacturer is in another country. Working with local contract manufacturers may mitigate risks such as long lead times, language barriers, and cultural differences.
Lacking Flexibility
If a hiring company outsources the production of their goods, responding to fluctuations in demand can be a challenge. Lacking flexibility can be particularly problematic if the hiring firm does not constitute a large portion of the contract manufacturer’s business.
In Conclusion
Contract manufacturing is a valuable model for role players in the food industry. If you’re in the food industry, and you want to build on the strengths of your business and need a partner to take care of the production end, head over to Dure Foods to learn more.
Should You Design Packaging Yourself or Have it Done for You?
in Packaging/by Dure FoodsMaking Those Critical Decisions on Branding and Packaging
As a business owner, one of your primary objectives is to keep your running costs as low as possible. When it comes to package design, you may be tempted to cut corners, especially if the customer will simply discard the packaging after receiving your product.
One of the simplest ways to save packaging costs is to design the packaging yourself. However, depending on your in-house team’s design skills, designing packaging yourself may not be the best idea.
Your product’s packaging is significant, and it can have a real effect on the way your customer views your brand and the quality of your product.
Some of the benefits of hiring a professional to design your packaging include:
Save Time
If you don’t have the necessary skills and experience, designing your packaging yourself can take a lot of valuable time, especially if you have to do research beforehand and if you want to try out different packaging designs.
Handing the project over to a professional will not only free up you up to spend more time on other aspects your business, but a professional designer will typically only needs a couple of days to put an effective design together.
Save Money
Saving money may seem like an unlikely benefit of hiring a professional, but if your product is on the market for several years, getting the package design right the first time will ensure that you won’t have to change it again.
Optimal Value
Something that many business owners tend to forget is that they can pile on the product value with their packaging which, in turn, will allow them to stand out from the competition. Coffee, for example, that is packaged in a decorative tin can, delivers higher value to the buyer than disposable coffee packaging.
Professional packaging designers are usually familiar with the best ways to maximize the product’s functionality with packaging. By designing your packaging yourself, you run the risk of losing out on the opportunity to differentiate your product effectively.
First Impression
Product packaging communicates an expectation in terms of quality and durability. Poorly designed packaging may tell the customer that they may be dealing with a product that is substandard.
A professional package design, on the other hand, will ensure that your customer views your product in a favourable light from the moment they receive it.
Consistency
A high-quality package design will contribute to branding uniformity across every customer-facing aspect of your business. A designer will take existing fonts, colour pallets, and textures into account when designing your product packaging.
Product packaging that is in sync with the rest of your business branding will ensure that your business appears more trustworthy, professional, and memorable.
Some Final Words
If you sell products in the food industry, you really should have a package designer with extensive experience in custom food formulation and private labelling to look professional, and be professional.
Dure Foods offers assistance with high-quality packaging options. Contact us here to find out more about our wide range of services.