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Should Your Company Consider Toll Manufacturing?

Should Your Company Consider Toll Manufacturing?

Manufacturing can be so expensive, such that if your business is trying to venture into a new product, you will need some very pricey equipment for production. Toll manufacturing is a good way to get into product manufacturing without the expensive capital outlay. This is especially applicable for such operations as chemical products manufacturing.
Because of the complex business systems and aggressive competitiveness in the market right now, there now are companies that focus solely on toll manufacturing. These companies deal only with distributors of the products and not the consumers. Toll manufacturing is highly ideal for businesses such as cleaning chemicals, wherein the manufacturer only handles the bulk production of the products, and the contracted distributor handles everything from the distribution to the marketing of the cleaning products. This relationship is ideal for the distributing company as it saves time and money in setting up a production facility with all the needed equipment and machines. The toll manufacturer, for its part, gets to focus all its efforts on improving product quality and in producing new innovative product lines.
Toll manufacturing is very good for companies that are testing the reception of a new chemical product in the market. This also works well if the company has to deal with small orders from customers and they do not have the proper equipment and facilities. Chemical manufacturing normally involves heavy capital investments for items such as reactors, centrifuges and driers. The production also involves tedious research and development to produce high quality products as well as obtaining ISO certification, which is very difficult to achieve. With the production and the distribution handled by two different companies, the efforts are more focused, resulting in higher quality products and more effective methods of doing business.
Savings are also achieved by a contracting company because it does not need huge facilities to house the needed equipment for the manufacturing process. Toll manufacturing provides the contracting company access to experts in the field of chemical product research as well as tried and tested production processes. Chemical product manufacturing involves many variables such as the particle size of the materials, heat sensitivity and other factors. It would be very expensive to invest in such expertise, expert chemists who will see to the maintenance of regulatory issues and quality control.
If you are testing out a few sample batches, then it would be wise to contract the services of a toll manufacturer. A toll manufacturer may also be able to handle the packaging and labelling aspects of the product manufacturing. This is highly beneficial as it relieves your company of additional capital outlay. The company can then focus on marketing and distribution to the target markets.

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