Toll manufacturing is a specific kind of contracting partnership that many companies use to keep control of their projects. Unlike with contracting, you get to decide which materials and methods your partner company uses. To set up a toll manufacturing partnership, both businesses sign what’s called a toll manufacturing agreement. Keep reading to learn which questions you should ask before signing one.

How Much Work Do You Need Done?

The first thing you’ll need to assess is the scope of the work you want completed. You’ll need to find a partner who can meet your specifications, or you may need two separate companies to work with. Finding one third-party contractor who can do it all will save you a lot of time since they won’t have to ship things to different facilities between project stages.

Are the Raw Materials Easy To Access?

One of the things you need to know about toll manufacturing is that you typically supply the raw materials yourself. This means you’ll need to source and purchase the raw materials on your own and figure out how to get them to the toll manufacturer. If the raw materials are hard to get, you may want to work with a regular contractor instead since they might have industry connections you don’t.

Do You Have Trade Secrets To Protect?

Whenever you work with a third-party company, it’s possible for someone there to steal your business secrets and try to profit from them later. Though there are ways to protect yourself legally, there’s always a risk when your product is highly desirable. The best way to protect your secrets is to make sure there are non-compete and non-disclosure clauses in your toll manufacturing agreement.

How Do You Plan To Check Quality?

Before signing a toll manufacturing agreement, ask yourself how you’d prefer to perform quality checks. Do you want to send someone to the third-party site? How often do you want to check quality? In order to guarantee your rights to check quality, you need to have these terms spelled out in the contract.

Are You in a Rush?

If you’re looking for a fast project completion rate, toll manufacturing may not be the way to go. Toll manufacturers often take on multiple jobs and do them in the order received. This means your project could have to wait in line behind other projects. It all depends on how complicated your project is and how big the partner company’s facilities are.

Many companies prefer to use toll manufacturing over contracting because it helps them retain control over their projects. Ask yourself these questions next time you consider using a toll manufacturer.

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