Article | December 10, 2021
The benefits of contract manufacturing are triggering manufacturers to utilize it as a strategy to speed up production and increase revenue. According to BCC Research, the worldwide contract manufacturing industry should increase from $2.0 trillion in 2018 to $2.7 trillion in 2023, a 6.7% CAGR.
Given the growing demand, contract manufacturing has a long way to go in innovating new solutions for manufacturers.
As technology takes over and enhances many of the processes we used to handle with manual labor, we are freed up to use our minds creatively, which leads to bigger and better leaps in innovation and productivity.
– Matt Mong, VP Market Innovation and Project Business Evangelist at Adeaca
Let us look at the benefits and concept of contract manufacturing, often known as manufacturing partners in some circles.
Contract Manufacturing: Concept and Benefits
Contract manufacturing is a business model in which a company agreeswith a contract manufacturer to make components or finished goods based on the hiring company's design. In short, it is a business model in which one company hires another company to manufacture components or goods for them or their products.
The following are some of the primary advantages of contract manufacturing that attract manufacturers to adopt this concept and find a trusted supplier to manufacture any product or part of their product without much difficulty.
Cost Efficiency: In contract manufacturing, companies do not have to pay for the facility, equipment, or labor needed.
Resource Allocations: The money and resources saved through contract manufacturing can be redirected towards other company operations.
Faster Lead Times: Hiring a contract manufacturer reduces manufacturing time. This improves market speed, delivery time, and customer service.
Quality Control: Contract manufacturers are likely to have their own quality control processes in place, which allow them to spot counterfeit or damaged products early on.
Advanced Skill Sets: Companies can benefit from the skills they may not possess, but the contract manufacturer does.
Contract Manufacturing Examples
Here are some examples of contract manufacturing companies that offer manufacturing services to other businesses and work on full-service outside manufacturing projects.
Example 1: Kimball Electronics Group
Kimball Electronics Group provides a comprehensive range of electronics manufacturing services, including engineering, prototyping, testing, electronic data interchange (EDI), new product introduction, and repair depot services. Soldering, assembly, reflow, de-paneling, flux application, inspection, screen printing, testing, and rework are all processes used in their manufacturing.
Example 2: Scapa Healthcare
Scapa Healthcare, headquartered in Knoxville, Tennessee, provides contract manufacturing services for medical and cosmetic products. Their portfolio of products includes sunscreen, silicone medical adhesives, and innovative materials. Additionally, the organization provides development, packaging, and logistics services.
Things to Consider While Selecting a Contract Manufacturing (CM) Partner
You need to know how to identify the ideal contract manufacturer for your business to accelerate production and produce high-quality items. Below, we've listed some of the most important things to keep in mind while looking for an outsourced manufacturing partner for your company.
Understanding a contract manufacturer's (CM) capabilities in terms of logistics and fulfillment is critical. Is your potential CM able to meet shifting product demands? How to use the CM's services? You may need one or more services from CM for your product, so always examine their capabilities or develop a list of their services and see which ones are valuable for you.
Knowledge or Prerequisite
A qualified, experienced, subject matter expert CM always correctly understands the requirements and delivers the services as per expectations and within the time frame specified in your production schedule. Always inquire about their qualifications or certificates in the places where your product will be manufactured.
Any contract manufacturing plan must have an agreement or compliance clause. Always inquire about the compliance procedure and thoroughly understand the terms and claws to avoid future issues.
Verify your possible contract manufacturer's personnel count. Is it easy to talk to them? Is labor skilled enough to meet the product's goals? It is critical for large-scale production and production, requiring swift responses. Any work force shortage might cause production delays.
Gear & Expertise
Check for machines and equipment as well as human labor in your possible CM. Many CM lease equipment to complete a project. So always check how the CM will organize the essential equipment for your project. Expertise in using the equipment is also necessary. Verify which machines were used and whether or not professionals were involved.
The CM's location is the main factor to check. Because the CM may have numerous plants, knowing which plant is assigned to your product is essential to knowing every aspect of its production. Also, the assembly location must allow you to visit and inspect the manufacturing between cycles.
Finding a reliable contract manufacturer with solid financial backing and market roots is essential to avoid market scams. However, you must also analyze and solve risk factors like equipment failure, supplier capacity, and unreasonable expectations.
Selection Myths of Contract Manufacturing Partner
Once you've produced a list of shortlisted contract manufacturing partners who meet all of the criteria described in the preceding heading, you can proceed by following the steps below to select the best contract manufacturing partner.
Look for Who is Willing to Invest in Your Business
Incorrect. The objective is to find a vendor prepared to manufacture at a loss. A contract manufacturer's strength is that they can stay competitive and make a profit for both parties.
Focus on Tier 1 CM Partners from the Market
This one is indeed not acceptable. Tier 1 is a financial phrase used to separate large corporations from smaller ones. You want a contract manufacturer who understands your business and your needs. Don't worry about the manufacturing partner's size.
Go Ahead with the One Who Offers the Best Services at the Lowest Price
Trying to get the cheapest quote isn't always the best idea. You should get a quote from your contract manufacturing partner, but the quote may not always reveal the complete story. Cost per unit frequently captures approximately 75% of total supply chain cost. Some contract manufacturers charge the OEM the remaining 25%. Consider the complete picture while selecting a CM partner.
Manufacturers use contract manufacturing to meet their commercial goals. Therefore, contract manufacturing is a win-win situation for both industrialists and contract manufacturers. Finding the proper contract manufacturing partner for your company is not straightforward, but our brief guide can help you identify the right manufacturing partner.
What makes a good contract manufacturer?
The most significant contract manufacturing firms are more than just supply chain partners. They recognize and treat your items as if they were their own, are meticulous in their operations, and are concerned with quality and capital.
What differentiates contract manufacturing from outsourcing?
A contract is a legally binding arrangement. It involves two or more parties. For example, outsourcing is outsourcing some tasks to an outside organization under a contract agreed upon by both parties.
What's the difference between contract manufacturing and licensing?
Contract manufacturing only outsources production phases, while licensing is far more complex. In return for fees, a corporation sells the right to utilize its intellectual property to another company. Licenses are like franchises.
"name": "What makes a good contract manufacturer?",
"text": "The most significant contract manufacturing firms are more than just supply chain partners. They recognize and treat your items as if they were their own, are meticulous in their operations, and are concerned with quality and capital."
"name": "What differentiates contract manufacturing from outsourcing?",
"text": "A contract is a legally binding arrangement. It involves two or more parties. For example, outsourcing is outsourcing some tasks to an outside organization under a contract agreed upon by both parties."
"name": "What's the difference between contract manufacturing and licensing?",
"text": "Contract manufacturing only outsources production phases, while licensing is far more complex. In return for fees, a corporation sells the right to utilize its intellectual property to another company. Licenses are like franchises."
Article | April 27, 2021
What do you need to create a killer B2B marketing plan or scale it to support a new marketing business in the age of COVID-19? Many manufacturing companies struggled when the coronavirus started. Some of them paused all marketing activities, waited for the lockdown to end, and then made up for potential losses.
Looking at this situation, where does your business stand when it comes to marketing planning in 2021?
Simply copying and pasting the old calendar, changing dates and campaign names will be far from being sufficient for the years ahead. Instead, establishing steady and tangible SMART B2B manufacturing marketing goals, which are specific, measurable, relevant, time-bound, and flexible, is crucial for marketers. And such goals should be made every quarter and bucketed under a planned manufacturing marketing strategy.
Aren't you sure what to include in your B2B manufacturing marketing plan? Read on the following ideas that will help you do marketing in the age of COVID-19.
Redefine your Budget Season
As marketers in industrial manufacturing face planning failures such as inevitable spreadsheets, board meetings, sales, and client handling that accompany for an entire year, they're also facing dwindling budgets. So, redefining your manufacturing marketing budget in 2021 will be one of the most important aspects of marketing for manufacturers.
AMA's latest CMO Survey found that manufacturing marketers anticipate an 8.4% rise in digital marketing spending throughout 2021.
What is your digital marketing goal in 2021?
Generate double-digit leads for products and services?
Promote or launch a new product or service?
Expanding reach by ranking in Google's first search engine result page (SERP)?
Creating a proper digital marketing plan will leverage to know beyond its tip of the ice. The digital platform will keep your marketing activities on track and in one place, and you will see what's working and what doesn't. This way, you can create a solid budget to implement digital marketing in your marketing business.
A survey found that customer experience expenditure surged 10% from past years after companies started marketing budgeting. This prominently included A CRM (customer relationship management) platform. So, including a CRM will benefit your business to track and manage contacts present in your marketing pipeline.
Social Media Platforms
Interestingly, social media expenditure has soared by 74% since February 2021, and the investment by other manufacturers has paid off. Manufacturers report that social media has contributed to the company's performance 24% more after the pandemic.
In general, 62% of marketers report that the importance of social media marketing for manufacturing has grown during the pandemic due to its critical role in reaching customers digitally. It's clear that companies that already implemented digital marketing see the value of budgeting for social media, which increased the positive results of marketing. So, when you set up a new budget, include social media to grow your business.
5 Things to Consider while Marketing your Business
A Lead Scoring Model
One of the most important aspects of marketing in manufacturing is implementing a lead scoring model. Investing in it will allow you to see through the valuable metric of your leads that will make you determine which ones are qualified.
Metrics include your ideal customer's demographics such as company size, revenue, industry, and main pain points. Also, these have a number of website visits, specific page views, content downloads, contact forms, emails unlocked, engagement with social posts, and more.
Regularly evaluate your lead scoring model and update to ensure your metrics are closely related to your ideal prospect. It would lead both sales and marketing for manufacturers to identify valuable leads in your database easily.
Invest in A Video Marketing Strategy
Video Marketing is a great deal. As per Cisco's research, by 2021, videos will account for 80% of all internet traffic. In addition, being one of the internet’s traffic sources, it’s practical and reasonable. Video marketing for manufacturers has been profitable by 83%. From creating more leads per year to a rise in sales, 80% say that video marketing has aided their business significantly.
If you haven't invested in video marketing yet, or if you've only dipped your toes in the water, 2021 is the year to dive in completely. As per HubSpot's 2020 State of Marketing report, video beats content forms like blogging, email, and infographics. Also, video is the most-used marketing content type for manufacturers.
So, there are many tools and resources that make it easy to get started with video marketing. Videos help to sell industrial manufacturing products and create a brand story. So, think about it and include this when budgeting your marketing plan.
Move Beyond Basic Marketing Analytics
Through digital marketing, manufacturing marketers have been trying to determine the ROI of their efforts. But do you know that most of them have been doing a lousy job? That's because they, and the tools they use, tend to focus on things that don't matter. These include views, clicks, etc.
More than 600 manufacturers and industrial companies in the U.S. have learned that their marketing and sales are going wrong. Out of which, 35% of manufacturers are not using an analytics tool like Google Analytics. So, it is advisable to move beyond basic marketing analytics to track how much traffic is coming to your website.
The latest tools can identify companies visiting and allow salespeople to engage them in their research phase. It will result in creating and maintaining promising relationships with clients.
Content Isn't Optional
A rock-hard content marketing plan is the core of your online business's success. Keep in mind; a few blogs are not sufficient to get accurate results!
Creating content helps (by answering) your potential buyer's queries in their research process and throughout their buying journey. A survey found an online search or a blog acts as a key source for finding answers to questions.
As most sales are happening online now, Hubspot suggests that manufacturing businesses' sales will surge incredibly in 2021. An average B2B manufacturing marketing has involved 68% of stakeholders. Prospects are now making more decisions by reaching out to a company than ever before because they want your website and social channels to educate them completely. If they can't find the information on your owned channels, they might turn to your competitor's website instead.
This makes content the most important aspect of marketing. When it comes to steady and consistent lead generation for b2b manufacturers, content is at the front and center of all the B2B manufacturing marketing trends. So, take content seriously instead of keeping it just as an alternative.
What's Important for 2021?
Plan in quarters
Many companies create full-year planning calendars in November and December. The pandemic in 2020 has taught us that to plan too ahead in advance can get your business to flow in the wrong direction. Because who knows whether those plans or events would fall digitally or be back to in-person. Will your target audience be as approachable as to emails and webinars or not?
So, plan your marketing things quarterly from annual to ensure your business leads in the right way.
It's not advisable to keep an eye on one particular marketing metric, for example, tracking traffic to your website. Instead, it's the whole picture that matters.
2021 is the year to evaluate every goal, every channel, and every message related to your business. With this, think about creating a big picture as well—company positioning and values, competitive research, and even business goals.
Here are some standard audit actions recommended:
1. Conversion rates
Visitors converting to leads
Leads converting to customers
2. Email engagement
Number of sent emails
3. Revenue attribution audits
How much revenue can be credited to marketing campaigns?
4. Campaign success
How did all of the individual elements of your campaign perform? That includes:
The site and landing pages
Paid ads and PPC
How did the campaign perform against other campaigns?
5. Social media audit
Engagement by channel
Overall reach and growth
6. Funnel audit
How effectively contacts are moving through the funnel
In addition, conduct an audit and analysis vertical to ensure all the automation is taking place or running appropriately. Doing it will help your marketing team keep a constant check on all the processes and cater to you with exact marketing activities. Keep this activity active throughout the year.
Continue Shifting Budgets—Don't Be Afraid
Much of 2020 has been experimental in marketing for manufacturers. Many manufacturing companies moved away from in-person events to a webinar, shifted expensive prospect meetings to internet meetings, trade events to PPC, website, and content creation. In these cases, you might have to shift your budgeting when needed. Consider revising the budget to create advertorials, creative virtual events, and strategic lead generation tools if you plan in quarters.
Along with these, 2021 brought a good time to invest even in intent data, ABM, SEO, and other automated technologically advanced digital initiatives. According to a recent study, manufacturing companies are now 21% more likely to invest in automation and technology. As they are now inclined towards the use of webinars & virtual events (20%), search & social media (14%), and website (12%). All of these increased in light of COVID-19. So, start planning for what's sure to have a better year ahead with your marketing strategies.
Frequently Asked Questions
What is the role of marketing in the manufacturing industry?
Marketing plays a pivotal role in the manufacturing industry. Through marketing, customers are well informed about products or services a company offers. Also, marketing helps in building the brand name, awareness, and visibility of a company.
How to use social media marketing in manufacturing?
Social media marketing in manufacturing can be ideally used in these ways:
Choose right platform
Share useful content
Create creative posts
Connect with in-market participants
Create videos and share
Address problems and provide solutions through content
What are the important aspects of marketing for the manufacturing industry?
Being the crucial part of any company in the manufacturing industry, essential aspects of marketing are:
How can Email Marketing help to market in the manufacturing industry?
Email marketing in the manufacturing industry can help by creating informational content. Start from offering subscription options to potential customers, clients, and visitors. Send updates, information, an overview of the company's services and products to aware the reader and convert them into loyal customers.
"name": "WHAT IS THE ROLE OF MARKETING IN THE MANUFACTURING INDUSTRY?",
"text": "Marketing plays a pivotal role in the manufacturing industry. Through marketing, customers are well informed about products or services a company offers. Also, marketing helps in building the brand name, awareness, and visibility of a company."
"name": "HOW TO USE SOCIAL MEDIA MARKETING IN MANUFACTURING?",
"text": "Social media marketing in manufacturing can be ideally used in these ways:
Choose right platform
Share useful content
Create creative posts
Connect with in-market participants
Create videos and share
Address problems and provide solutions through content"
"name": "WHAT ARE THE IMPORTANT ASPECTS OF MARKETING FOR THE MANUFACTURING INDUSTRY?",
"text": "Being the crucial part of any company in the manufacturing industry, essential aspects of marketing are:
"name": "HOW CAN EMAIL MARKETING HELP TO MARKET IN THE MANUFACTURING INDUSTRY?",
"text": "Email marketing in the manufacturing industry can help by creating informational content. Start from offering subscription options to potential customers, clients, and visitors. Send updates, information, an overview of the company's services and products to aware the reader and convert them into loyal customers."
Article | January 20, 2022
A smart factory that leverages Industry 4.0 concepts to elevate its operations has long been a model for other industries that are still figuring out how to travel the digital manufacturing route. Smart manufacturing technology is all you need to know if you're looking to cash in on this trend.
“Industry 4.0 is not really a revolution. It’s more of an evolution.”
– Christian Kubis
In this article, we'll look at the advantages that many smart factory pioneers are getting from their smart factories. In addition, we will look at the top smart factory examples and understand how they applied the Industry 4.0 idea and excelled in their smart manufacturing adoption.
Industry 4.0 Technology Benefits
Manufacturing Industry 4.0 has several benefits that can alter the operations of manufacturers. Beyond optimization and automation, smart manufacturing Industry 4.0 aims to uncover new business prospects and models by increasing the efficiency, speed, and customer focus of manufacturing and associated industries.
Key benefits of Manufacturing Industry 4.0 in production include:
Improved productivity and efficiency
Increased collaboration and knowledge sharing
Better agility and adaptability
Improved customer experience
Reduced costs and increased profitability
Creates opportunities for innovation
World Smart Factory Case Studies and Lessons to Be Learned
Schneider Electric, France SAS
Schneider Electric's le Vaudreuil plant is a prime example of a smart factory Industry 4.0, having been regarded as one of the most modern manufacturing facilities in the world, utilizing Fourth Industrial Revolution technologies on a large scale. The factory has included cutting-edge digital technology, such as the EcoStruxureTM Augmented Operator Advisor, which enables operators to use augmented reality to accelerate operation and maintenance, resulting in a 2–7% increase in productivity. EcoStruxureTM Resource Advisor's initial deployment saves up to 30% on energy and contributes to long-term improvement.
Johnson & Johnson DePuy Synthes, Ireland
DePuy Synthes' medical device manufacturing plant, which started in 1997, just underwent a multimillion-dollar makeover to better integrate digitalization and Industry 4.0 smart manufacturing. Johnson & Johnson made a big investment in the Internet of Things. By linking equipment, the factory used IoT technology to create digital representations of physical assets (referred to as “digital twins”). These digital twins resulted in sophisticated machine insights. As a result of these insights, the company was able to reduce operating expenditures while simultaneously reducing machine downtime.
Bosch's Wuxi factory's digital transformation uses IIoT and big data. The company integrates its systems to keep track of the whole production process at its facilities. Embedding sensors in production machinery collects data on machine status and cycle time. When data is collected, complicated data analytics tools analyze it in real-time and alert workers to production bottlenecks. This strategy helps forecast equipment failures and allows the organization to arrange maintenance ahead of time. As a consequence, the manufacturer's equipment may run for longer.
The Tesla Gigafactory, Germany
According to Tesla, the Berlin Gigafactory is the world's most advanced high-volume electric vehicle production plant. On a 300-hectare facility in Grünheide, it produces batteries, powertrains, and cars, starting with the Model Y and Model 3. For Tesla, the goal is not merely to make a smart car, but also to construct a smart factory. The plant's photographs reveal an Industry 4.0 smart factory with solar panels on the roof, resulting in a more sustainable production method. On its official website, Tesla claimed to use cutting-edge casting methods and a highly efficient body shop to improve car safety. Tesla's relentless pursuit of manufacturing efficiency has allowed them to revolutionize the car industry.
The SmartFactoryKL was established to pave the way for the future's "intelligent factory." It is the world's first manufacturer-independent Industry 4.0 production facility, demonstrating the value of high-quality, flexible manufacturing and the effectiveness with which it can be deployed. The last four years, SmartFactoryKL has been guided by particular strategic objectives that drive innovation; the aim is to see artificial intelligence integrated into production. Two instances of AI-driven transformations include an "order-to-make' mass customization platform and a remote AI-enabled, intelligent service cloud platform that anticipates maintenance needs before they occur.
Enabling smart manufacturing means using the latest technology to improve processes and products. The aforementioned smart factory examples are industry leaders and are thriving by implementing Industry 4.0 technology. Small and medium-sized enterprises (SMEs) may use these smart factory examples to learn about the adoption process, challenges, and solutions. Industry 4.0 is aimed at improving enterprises and minimizing human effort in general. So adopt the smart factory concept and be productive.
What is the difference between a smart factory and a digital factory?
The digital factory enables the planning of factories using virtual reality and models, whereas the smart factory enables the operation and optimization of factories in real time.
Where does Industry 4.0 come from?
The term "Industry 4.0" was coined in Germany to represent data-driven, AI-powered, networked "smart factories" as the fourth industrial revolution's forerunner.
Article | July 28, 2021
Rex Moore Group, Inc. is a Top50 electrical contractor delivering unmatched integrated electrical solutions. As an early adopter of Lean manufacturing principles, Rex Moore has created a company-wide culture of continuous improvement that drives significant value to their clients. The firm contracts and performs both design/build and bid work for all electrical, telecommunications, and integrated systems market segments.
Rex Moore has a full-service maintenance department to cover emergency and routine requirements for all facilities, whether an existing facility or one that has been recently completed by the company. The ability to negotiate and competitively bid various forms of contracts including lump-sum, fixed fee, hourly rate, and cost-plus work as a prime contractor, subcontractor, or joint venture is enhanced with Project Business Automation (PBA) from Adeaca. This solution permits the company to propose work only if they are in a position to be competitive in the marketplace and provide excellent service with fair compensation.
Rex Moore used Adeaca PBA as a construction management software for builders and contractors to integrate and facilitate its business processes in its ERP system. Together with Microsoft Dynamics, PBA integrated processes across the company on a single end-to-end platform. This allowed the company to replace 15 different applications with a single comprehensive system, eliminating the costs and inefficiencies associated with multiple systems and silos of information.