As great as contract manufacturing sounds, sometimes it isn’t the best fit for a company. Below are a few cons to contract manufacturing that you should keep in mind when deciding what’s best for your business.
Difficult to Find a High-Quality Provider
As with any business deal, without proper research, you could end up outsourcing to the wrong company. To find the perfect CM, you’ll need your team to conduct thorough research into a partner that fits your precise needs.
A low-quality contract manufacturer can easily disguise themselves as a high-quality, reliable partner so be sure to do comprehensive research. Unreliable providers can delay processes and deliver flawed end products.
Loss of Control
With a CM, you will have to give up control of the manufacturing process. When relinquishing this control, you risk losing critical knowledge and skills around production techniques. Without constant supervision, your company won’t be able to pinpoint any problems within production.
Make sure to check in at significant points of the project to guarantee there are no overlaying problems within the project. This will ensure the highest quality product at all critical points of production.
When using a contract manufacturing service, your company may run into a communication gap that can cause a variety of problems for the production process such as:
No set transition plan
Improper internal communication amongst your internal team
Misunderstandings of capacity qualifications
Without developing a product in-house, you won’t have direct communication with the people physically developing your product which could lead to the prior mentioned complications and more.
Intellectual Property Risks
A significant disadvantage of contract manufacturing is the risk of your intellectual property being stolen. When you outsource your manufacturing, you give dozens of workers access to your intellectual property.
You risk your intellectual property being leaked. You also risk the possibility of your intellectual property being misused meaning your supplier would use it to their own advantage with them potentially becoming your competitor.