Toll manufacturing & contract manufacturing are two relatively similar forms of supply chain management that are often misunderstood và confused. While both of these manufacturing options have sầu distinct & clear characteristics, their most strategic advantage is their ability khổng lồ provide customers with valuable ways to save sầu both time và capital on their sản phẩm line development.
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In many ways, contract & toll manufacturing are similar khổng lồ other on-dem& services like Uber, Seamless, & HBO Go. They allow Sierra Coating lớn provide laminating or coating services on dem& and as needed, as part of a “sharing economy” mã sản phẩm that is beneficial for both the customer & the manufacturer.
“Sierra has delivered us a unique hàng hóa for years, on time all the time. If there is any kind of an issue they always get right on it.”
Brian, Company is a 10-year customer
Below, we will highlight the advantages và distinctions between toll & contract manufacturing to lớn help you make the best decision for your company.
What is Toll Manufacturing?
In toll manufacturing, one company provides raw materials (or semi-finished goods) to lớn a third-các buổi party, who will then provide the rest of the services (manufacturing). Typically, the third-party company will already have particular equipment and organizational models in place, & they can supply subclasses of manufacturing processes for the first company for a fee – or toll.
As a toll manufacturer, Sierra Coating can provide customers with a facility & manufacturing equipment to process their raw materials or semi-finished products. Because of this, the customer only has a variable cost of manufacturing without the financial investment in equipment, facilities, and employees. With toll manufacturing, the customer is equipped with the resources to lớn develop their own specialty coatings or papers that Sierra Coating can use in the manufacturing process. Subsequently, the customer is able lớn develop the exact sản phẩm they envision, without the time và capital investment of building a manufacturing operation. This significantly decreases the time required to lớn get the sản phẩm lớn market, as lead times for ordering and installing new machinery are eliminated.
At Sierra Coating, customers are able lớn supply one or more of the raw materials needed for production or, if the customer prefers, the Sierra Coating team can supply the materials.
Key Differences with Contract Manufacturing
Though contract manufacturing is similar to lớn toll manufacturing, there are some key differences between the two. Similar to lớn toll manufacturing, contract manufacturing involves outsourcing production processes lớn a third-tiệc nhỏ company. In contract manufacturing, however, the third-các buổi tiệc nhỏ company hired lớn produce the goods is supplying the manufacturing process as well as sourcing all of the raw materials. Contract manufacturing is creating a supply chain vendor for a branded, private label or custom-made hàng hóa. The contract manufacturer is responsible for making the product to lớn specification and meeting the delivery time requirements. This offers the customer a fast and effective method of extending their product line with minimal investment and a made-to-order supply program.
Sierra Coating is a leader in coating and laminating services, with over twenty years of experience providing our customers with both toll and contract manufacturing services. To learn more about the differences between toll and contract manufacturing as well as other popular paper industry terms, download our miễn phí guide, Commonly Misused Terms within the Paper Industry.
If you have any questions about how Sierra Coating can help with your next toll and/or contract manufacturing project, tương tác us today.