Engaging a contract manufacturer for food processing

Outsourcing or contracting means engaging another business to perform a service or task on behalf of your business. It can be a cost-effective way of doing business, especially if you are not in a position to invest in the equipment, resources or staff to complete the task yourself. You could use contract manufacturing to:

• make your business more competitive
• offer an extended range of products or services
• focus on the core competencies of your business.

What to outsource

The first step in engaging a food contract manufacturer is deciding what you want to outsource. You could outsource:

• manufacture of products
• manufacture of inputs to a production process
• product design or packaging
• payroll
• information technology or service support
• services such as leasing, purchasing or renting.

Identify what your business does best, and look at contracting others to do what you aren't able to do well or cost-effectively.

Find a contractor

Meeting with multiple contractors and creating a short list will allow you to make an informed decision. A good way to find possible contractors is to ask your business networks or industry associations for recommendations.

It is a good idea to ensure that your business does not depend on just one provider when it comes to essential work. This will make it easier for you to supply products and services even if one provider experiences equipment failure.

Investigate the contractor

Make sure the contractor you choose has the competency to do the job, and the ability to supply the agreed product or service on time. One way to help you find this out is to ask for references, or contact details of current or previous clients so you can ask them for feedback.

It is always best to physically inspect the site to ensure the contract manufacturer complies with regulatory requirements, and has good processes in place. You should request information about the contractor's contingency plans in case of equipment or product failure, to avoid situations that could reflect negatively on your business.

Choose the best fit for your business

Choosing the right contract manufacturer takes time, as they are an essential part of your supply chain. Building a good relationship with your suppliers is a key part of doing business, so make sure you thoroughly assess potential contractors before you make a decision. Contract manufacturers can be seen as an extension of your business, and, if you work well together, they could help you with innovative ideas and product development.

Also consider...

• See the results of our food contract manufacturing survey to find out how it is used in Queensland's food processing industry.
• Find out about regulations and compliance in the food and beverage industry.
• Learn more about finding the right suppliers and managing risk in supply chains.
• Improve your processes and performance with assistance from the Queensland Manufacturing Institute.
• Learn more about exporting from Trade and Investment Queensland.