When considering outsourcing solutions for your production needs, make sure your need is clearly stated and agreed upon inside your company. Be sure you can inform your prospective partner with your needs and with your goals. If you foresee or have already encountered any problems in the process, be sure you talk about these with your partner before you commission the process.

You should consider outsourcing your operations when. . .

• your product volume under or over employs your own manufacturing lines, either short or long term.
• there's a specific, short-term requirement that may be better served by specific experience or equipment you don't have.
• there's a short run for a new product market test, gift pack or seasonal appeal which may require your company to invest in new equipment.
• promoting your product with increasingly popular marketing weapons of non-standard packaging or promotional inserts requiring special machinery or labor intensive work.
• the pressure of new business or deadlines creates a heavy, short-term workload for which you require experienced help to supplement the efforts of in-house staff.
• a product may more economically be shipped in bulk to a distant market, then unit packed locally.
• new packaging forms unfamiliar to your staff and equipment may be specified.
• there is no available in-house equipment or expertise for a particular job.
• the plant is closing for maintenance or faced with a labor availability problem.
• there's a warehouse full of a product that needs re- working to make it saleable.
• a new package form is to be market tested before general introduction.
• there's a corporate down-sizing.
• the company is faced with a high investment to meet regulatory and environmental compliances.

What to look for in Deciding?

When considering an outsource service, you should use a wide range of selection criteria. And, depending on the personality of you and your company and the nature of the specific project, place more or less emphasis on each of those criteria. 
 

Here are several considerations:

l         Location. Convenient location relative to your manufacturing and distribution facilities can save delivery time and lower freight charges, possibly impacting the total cost of your project. But keep in mind that the savings achieved by using most firms prepared to assist you can easily outweigh most freight considerations.

l         Experience. Make sure the contract packagers you consider are equipped to deliver the specific services your needs demand. Look for companies that have serviced other clients with similar product lines and needs.

l         Cost. All quotes you solicit should be thoroughly studied, analyzed, and considered in relation to the service that you expect to receive.

l         Good Communication. Brilliant thoughts and innovative solutions will do you no good if you don’t install adequate communication channels with your new partner. 

l         Controls. Be sure that you see eye-to-eye on detailed paperwork or control requirements. Help your new partner put the proper procedures in place and have the analytical skills needed to help you develop a full and accurate picture of problems, solutions, and the various repercussions of those solutions.

l         Personality. A good match of personalities between key staff of both companies helps ensure a successful relationship. 

l         Size. Is the company large enough or small enough to handle your project? Does the company have enough experienced personnel? A staff capable of solving problems and implementing solutions is very important. Successful contract packaging relies on good management and manufacturing practices.

l         Financial strength. Does the new partner really have the financial strength you need?

l         Quality. Look for signs of innovation, unique approaches, and a different perspective. Ask about the in-house details of its quality controls.

l         Strong references. Ask for a list of other clients.