What are the Different Types of Manufacturing Entities: Toll, Contract, Full-Fledged

M&M Automatic Manufacturing Floor

When you outsource your contract manufacturing, you typically are faced with determining which one of three types of manufacturing entities will fit your manufacturing needs. Depending on your circumstances and project requirements, you’ll want to evaluate if you’ll need a toll manufacturer, contract manufacturer or full-fledged manufacturer.

Toll Manufacturer

Materials, goods, inventory and selling risks are assumed by the organization that hires a toll manufacturing company (you in this case). Under this type of situation, the toll manufacturer provides the plant, machinery and labor force to manufacture parts, and you must provide all materials and goods necessary for manufacturing. You also would hold ownership of all intangible assets such as patents and designs and assumes all selling risks.

You can count on paying a toll manufacturer on a routine basis.

Contract Manufacturer

This type of manufacturer is the body that owns the plant and machinery and provides the labor to operate the machinery – similar to a toll manufacturer. You would have access to the company’s resources (plant, machinery and machinists) to make your parts and components, and you ultimately assume the risk of selling the goods. Similarly, a contract manufacturer would also be paid on a routine basis.

What makes contract manufacturers different from toll manufacturers is that they source and supply the materials necessary to manufacture the parts.

Full-Fledged Manufacturer

A full-fledge manufacturer is the most involved of the three types. This company is responsible for providing the space, machinery and team to manufacture the parts, as well as, all materials and goods necessary for production. Ultimately, this type of manufacturer assumes all risks associated with selling the products and has rights to intangible assets such as designs and patents.

How to Speed up Manufacturing Processes When Outsourcing

M&M Automatic Machine Sparks

The manufacturing industry relies heavily on deadlines both from a customer perspective as well as an outsourced manufacturing company perspective. Here are some tips we’ve come up with over the years to help you speed up the manufacturing process so you can meet your deadlines more efficiently and get your products into your customer’s hands faster.

Tips for Speeding up the Manufacturing Process

Maximize Your RFQ Information

The more information that you disclose when you request a quote from a manufacturing company, the less time the company has to spend asking questions and you answering questions to get all the necessary information to produce an accurate quote.

Avoid Solidworks Document Formats

More often than not, when a design is submitted from Solidworks, it lacks the proper dimensions to quote the project. When you submit your RFQ, make sure you include your dimensions in your design, otherwise the manufacturing company will spend more time getting that information from you further delaying the quoting and manufacturing process.

Communicate Timelines

Simple, but important – clearly communicating your timeline is crucial to getting your parts into your hands when you need them. Whether you’re in need of an expedited timeline or not, when you’re up-front and clear about when you need your parts, the manufacturing company can readily meet and often exceed those deadlines.

Supply Materials

Ordering materials to use in the manufacturing process is a normal, daily activity for outsourced manufacturing companies, but one that can take a lot of time. If you are able supply the materials you would like to use for your parts, it could shave a lot of preliminary, set-up time off speeding up your manufacturing.

If you aren’t sure what materials to use, this article might be helpful »

Provide the Right Gauges

Every part is unique and often requires speciality gauges in order to ensure that the parts are exact to specifications. Instead of relying on the manufacturing company to order the necessary gauges to test your parts, provide your own gauges from the start to further speed up the process.

From supplying the right information in your RFQ to providing the materials you need to manufacture your parts with, there are a variety of ways you can help expedite the manufacturing process to get your parts into your hands quicker.