Why Toll Manufacturing?
If you ask a dozen business experts the difference between toll manufacturing and contract manufacturing, you are likely to get twelve different answers. There are those who believe that they are basically the same, with no significant differences. Others will give you varying explanations with reference to raw materials, machinery, production processes and ownership. It’s little wonder there is so much confusion about these terms if even the experts can’t agree on it.
So let’s try to make it as simple as possible. Imagine you are a business owner, whose company designs, manufactures and sells plastic cutlery…I did say we’d keep it simple. You produce all the raw materials for your products, your in-house design team has designed the cutlery sets, and your manufacturing plant brings the designs and raw materials together to create beautiful white knives forks and spoons. Your sales team go out the length and breadth of the country and sell them to small retailers, camping shops and even mail order catalogue companies. Now what I have just described is how many businesses operate, in that virtually everything is done in-house from start to finish.
One day you get a call from a huge retail chain who want to have their own branded range of plastic cutlery. Like most of their other products, they do not have the capability or the know-how to make them so they come to you. By taking on their order you are in effect becoming a contract manufacturer. You are contracting to manufacture goods for another company and their only input might be the design of the packaging. Otherwise, you are responsible for the entire manufacturing process from raw materials, through to delivery of the finished product.
For toll manufacturing the relationship and processes are different. The scenario is a large seller of plastic goods, whose ranges cover everything from garden furniture to drinks beakers, come to you. For their domestic product range, they want to add cutlery and love the designs that you manufacture. However, they want to use high-grade raw plastic compounds and even want the colouring additives to be a specific grade. It may well be that you don’t have the capability or the knowledge to produce these higher grade materials as they differ so much from the ones you manufacture. Even if you had the knowledge imagine the cost of investing in development plus the investment in new plant that might be needed. That is not a problem as there are companies out that have already done it for you. In this scenario, you get the raw materials from an outside source and use them to manufacture the products for your customers.
Whilst this example is of a company supplying raw materials to a manufacturer, it can also be done as a partnership. This is suitable where two companies with different strengths and resources are both willing to combine them in order to produce a product they can share the proceeds of. The advantage to the manufacturer is that they don’t need to source or purchase any of the raw materials or components. For the front end materials company, they simply supply the materials leave all the production issues to the manufacturer.
But why would a company want to employ the services of a manufacturer rather than manufacture the goods themselves from raw materials they already own?
The most obvious is the amount of capital investment it would require to set up a manufacturing facility in the first place. This is a huge undertaking involving buying the physical equipment, finding a suitable location, renting or buying buildings, the cost of setting it up, and the expense of the infrastructure needed to service the manufacturing plant so it can keep running day to day. We mustn’t forget the not insignificant task of finding and training suitable employees, all of whom will be requiring a salary no doubt. All of these headaches and expenses are eliminated by contracting a company who already has the equipment, the know-how and the people with skills to manufacture the goods for a one-off fee. All the issues just mentioned are theirs to deal with.
If you are the manufacturer what would you gain by entering into a toll manufacturing agreement with a materials or components supplier?
Like the previous example, it could be your business model is not aligned perfectly with the task of going out and sourcing the raw materials for the products you make. Research and development into materials such as plastics, chemicals, and other highly technical or scientific components are hugely expensive and often with no guarantees of success. There is also the issue of ensuring a readily available and reliable source of the materials is in place. For any single product, it could be that a unique specification of raw material was needed for just a single run, which just isn’t cost effective for many mass production companies.
A further benefit for both is that the fee is negotiated and predetermined before the work begins. Both businesses know that if the other party experiences any delay or a problem that puts their costs up, it shouldn’t affect the other side. The process is also more efficient and likely to lead to faster completion times which is never a bad thing.
There are some industries that can, and have derived more benefits and advantages than others by following the toll manufacturing model. Examples include the chemical industry, pharmaceutical companies, electronics products and plastics and polymer resin businesses. One of the main reasons is that these industries rely on advanced technology, scientific knowledge and also a great deal of research and development.
To take one example, polymer resins, which are used to create protective and waterproof coatings on millions of products. A producer could enter into an agreement with a specialist company in the polymer resin industry for them to treat or even manufacture specific components. Given the vast number of different chemical mixes, formulas and the specialist knowledge required it is more than sensible to employ the services of a second company who has all the expertise.
In many industries toll manufacturing is becoming the accepted practice where specialised knowledge of processes and materials is called upon, to reduce costs, speed up production, and inevitably increase profits. Any business that wants to achieve all three should consider toll manufacturing very seriously indeed…your competitors might already be doing just that.
Why Res-Tec for Toll Manufacturing?
Res-Tec Limited has the resources and experience to work in partnership or to develop a composite to your specifications. Alternatively, if you already have a product and are looking to have it manufactured in the UK to a consistent high quality at a highly competitive price, contact us to find out how we can help.
- Decades of expertise with polyester and polyurethane formulations
- ISO9001 and ISO14001 certified manufacturing
- Vacuum and fully enclosed mixers
- High shear dispersion and colour blending
- Hazardous materials capability
- Quality testing to customer specification
- Highly flexible and responsive manufacturing
- Established logistics network for timely deliveries
- Certificates of Analysis & Conformity for each batch
- MSDS support
- Tinning and labelling services
- Raw material storage
- Batch size capabilities from small up to 2000 Litres
- Packaging from under 1 Litre up to 1000 Litre IBC
Private Label Service
Res-Tec, as part of the Roberts Manufacturing Group, has access to a wide range of products and technologies, from simple resins through to advanced hybrid polymer waterproofing systems. This allows our clients to bolster their product ranges and enter new markets – all without any of the cost associated with development and manufacturing.
As a client of Res-Tec’s private labelling service you will be assured to receive a product of proven performance, manufactured and delivered to consistently high standards and branded to suit your own portfolio.
1.Take advantage of our expertise: Res-Tec’s dedicated research and development team have invested time, expertise and resources to develop an innovative product range. By undertaking a white label agreement you will totally avoid the costs associated with the design and development of the product.
2. Add a refined, high-performance product to your brand: The products produced by Res-Tec have undergone extensive fine tuning. Rather than going through the lengthy and challenging process of creating your own product, you can use an already-polished product under your brand.
3. Delegate responsibility for product quality and performance: Res-Tec manufactures to stringent specification criteria and will take full responsibility for ensuring you receive a consistent, high quality product
4. Enter new or strengthen existing markets: A new product can allow instant access into a brand new market, opening up new possibilities and business opportunities. Likewise, you can greatly strengthen your position within an existing market by bolstering your current portfolio and being more versatile than your competition.
Res-Tec Bespoke Pre-Formed GRP Trim Designs & Production
Res-Tec, as part of the Roberts Manufacturing Group, has over 30 years’ experience in the manufacturing of GRP trims. We understand the requirement for precision products that deliver the same consistent quality for every trim.
- Experienced team of technicians and researchers who will be able to deliver a product to you exact requirements
- Trims available in a wide variety of lengths, thicknesses, colours and finishes
- Highly cost-effective and competitive service
- All aspects of design and production are undertaken within the company’s ISO 9001 Quality Management System
Research & Development
Res-Tec’s technical team and extensive array of equipment and resources are available for your projects. The research and development process is carried under the company’s ISO 9001 Quality Management System to ensure your needs are met.
What We Offer
- Technical advice from independent experts
- Troubleshooting and problem solving
- Bespoke resin and compound formulating
- Raw material and composite quality evaluations
- Material sourcing assistance
- Specimen testing under laboratory controlled conditions
- Training and upskilling
Get in touch with Res-Tec’s technical team today and discuss your manufacturing service requirements.