Finance · April 15, 2021

How To Have a Successful Business Partnership With Your Manufacturer

Learning how to have a successful business partnership with a manufacturing assembler can be a helpful way to respond to challenges and opportunities in the industry. The right relationship can deliver more cost-effective and efficient solutions compared to a short-term assembly contract. Ultimately, the collaboration works best when both parties are actively invested in cultivating a partnership that meets their specific goals.

If you collaborate with a manufacturing partner and continue to nurture the relationship, you can achieve more strategic control throughout the process. The key is to actively communicate needs and expectations, then formulate your arrangement and review processes to ensure the partnership works for everyone.


Building your partnership

Companies seeking growth or agility need to make tough decisions about how to increase critical inputs. Adding labor, space or technology can be required to meet new or volatile demand. Doing so, however, can draw heavily on the precious resources of time and cash. Partnering with a manufacturing assembler can enable companies to manage constraints while keeping an eye on the bottom line.

When conducting your search for the right manufacturing partner, keep in mind that contract manufacturing agreements can be customized to fit your specific needs. A few of the most common types include:

  • Individual component manufacturing: This arrangement, in which the partner produces just one component or part of a more complex finished product, can come in handy if the production requires specialty equipment, material or skill that is scarce.
  • Labor or service subcontracting: The partner provides labor or service, ideally faster or cheaper than in-house capabilities allow.
  • Private label agreement: A contract manufacturer produces a finished product, allowing the client company to focus on delivering their brand proposition in other ways.
  • End-to-end manufacturing: Similar to private label manufacturing, this option carries the added benefit of more support with product design and engineering and can also include shipping.

Maintaining a successful, long-term business partnership

Once you have an idea of the type of partnership agreement that fits your strategic goals, you'll want to find out which prospects offer the tools, resources and knowledge that meet your production requirements. At a minimum, you'll want a partner to deliver a high-quality version of your product without significant delays or unexpected costs. Establishing your expectations clearly during the vetting process will set the stage for continued returns over the duration of your partnership.

Ask questions and conduct your own research on each company to determine whether they can scale with your needs. Business concerns to discuss frankly may hinge upon several core competencies, including the following:

  • Track record in meeting or beating production deadlines
  • Ability to maintain quality control at higher volumes or tighter deadlines
  • Plan for handling any unavoidable delays to minimize disruption to your business
  • Keeping pace with technology and regulatory expectations for the industry
  • Supply chain visibility and logistics management

However, take care not to over-index or emphasize capabilities far beyond what you need.

Once the partnership is up and running, be sure to revisit all of the above and any additional criteria you sought out on a regular basis. Given that these items defined your vision for success, they should also inform your review process.

Ensuring partner commitment

The right manufacturer should essentially be viewed as an investor in your business, so openness about goals and objectives goes both ways. Discuss the viability of your product and how they benefit from your success. Once you pinpoint a collaborator, your contract should include language and provisions to address all of these factors as they fit into your partnership objectives and concerns.

Prospects should enthusiastically welcome you with a firsthand look around their production site and explain how they will manufacture your product. They should also be willing to share examples of their projects while respecting the privacy and intellectual property of other clients.

As you ascertain how to have a successful business partnership that meets your specific business needs, consider the bigger picture. For example, does your partnership allow you to redeploy skilled internal labor in a way that helps you focus on your core value proposition? Collaborating with existing business partners and consultants can help you establish your current business needs and create a road map for future growth.

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