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Americas: Outsourcing releases capacity

Contract manufacturers like SternMaid America can relieve companies of work, provide the latest technologies and contribute valuable external know-how.

Smaller companies and manufacturers with a frequently changing product range face the challenge of installing costly facilities or constantly updating technologies.

More companies are therefore choosing to concentrate on their core skills – whether they be development, marketing or distribution – while the task of blending or filling products is outsourced to specialized firms.

This reduces the volume of work involved and releases capacity.

In principle, contract manufacturers either clear the way for the customer’s core activities or they take on the manufacture of products and quantities that cannot be integrated satisfactorily into the company’s own production system.

Reduced workload, greater flexibility

Firms decide to work with contract manufacturers when they realize that they can reduce their workload and reap additional benefits through specific outsourcing.

When there is a shortage of skilled labor and temporary workers are hard to find, external service providers can help to handle peak demand or safeguard a regular supply.

For example, a manufacturer might receive an enquiry about an unusually large quantity of goods, but its packaging lines are already working to capacity.

Rather than having to turn down the order, a contract manufacturer could step in and pack the goods to the usual level of quality, thereby avoiding production bottlenecks.

Very often, outsourcing partners also produce certain products or quantities that cannot be integrated optimally into the customer’s production process.

For example, when the modernization of a production plant is taking some time to complete.

While the work is being carried out, production can be outsourced to an external service provider.

Contract manufacturers need to be farsighted in their planning because customers expect flexibility and reliable, on-time delivery.

Short deadlines even have to be met at the right time and with top quality.

If a company’s plant breaks down unexpectedly and a contract manufacturer is asked to take over, production must be able to start very quickly.

The complete package

Today, there is often a demand for specialists who can supply an all-in-one package according to the customer’s wishes, as is the case with SternMaid America.

The contract manufacturer located in Aurora, Illinois (US), offers the whole service chain from one source: from blending of powdered foods and nutritional supplements to a package that includes the purchase of raw materials, quality assurance, co-packing, warehousing and delivery.

Customers can take advantage of the full service or choose individual modules, depending on their requirements.

The company’s microblending plant, for example, can be used to meet all manner of production needs – from pre-mixes for use within the bakery sector and protein supplements for the nutraceutical industry to powdered beverage mixtures.

The line can mix powders with a precision of 1:100,000, and distributes micro-components such as flavors and emulsifiers very finely.

In this way, it is possible to add probiotics, vitamins and minerals to foods, and larger amounts of fats and highly viscous liquids such as lecithin can be fed in, too.

After mixing, the contract manufacturer can fill the end products into bags, cartons, drums, flexible intermediate bulk containers, intermediate bulk containers, cans, or retail packaging such as stick packs.

Responsibilities and quality control

Brands cannot wholly shift their responsibilities for product quality onto a contract manufacturer.

Today’s food industry safety requirements are stricter than ever before.

It only takes one unclean machine to cause a potential recall of a product and destroy consumers’ trust in a brand.

Ultimately, the brand owner is responsible for selling a safe product to the market and gets contacted if there were to be a product claim or recall.

This makes it even more important to work only with reliable partners with established and certified quality management systems of the highest level.

SternMaid America is well aware of this responsibility, and with rigorous quality control and quality assurance, the company takes every precaution to ensure the greatest possible safety for its customers.

Transparency is key

Everything comes down to food safety and product quality and, ultimately, the company’s and the brand’s reputation.

There is nothing that brand owners should not ask a potential contract manufacturer.

Above all, customers must be able to trust their contract manufacturers.

All aspects of safety, quality and production should be discussed openly and with 100% transparently.

Contract manufacturers must be Current Good Manufacturing Practice or cGMP compliant, and potential customers should ask to see their certification documentation.

Global Food Safety Initiative or GFSI certified does not mean being compliant on audit days only: It means being compliant 24/7.

Contract manufacturers who decline to share their documentation or certification or who do not allow unannounced or same day visits probably have something to hide.

Transparency along the whole supply chain should be a ‘must’.

Contract manufacturing is a matter of trust.

In the interests of full disclosure and transparency, finished product marketers and contract manufacturers should share with one another all information related to product quality and required to provide and sell a safe product.

Activities should be regularly coordinated, even at the planning stage.

This creates the basis for a positive, long-term business relationship.

When there is a lack of communication and transparency between the two parties during the planning process, the customer’s expectations and the actual outcome may not coincide.

So transparency is crucial.

In fact, it is the key to a successful business partnership.

Story by Jan Thoele, executive VP, SternMaid America