Custom and toll manufacturing

Nation Ford Chemical explains the types of companies that may benefit from toll manufacturing and the important things to consider when establishing a tolling partnership.
 

Have you ever wondered how you are going to schedule time in existing equipment to manufacture a new product? Or, where you are going to add new equipment to keep up with growing sales, or even how are you going to come up with the funds to install new equipment?
 

This is where contract and toll manufacturers come into play. They add capacity to companies of all types and sizes, from start-up companies bringing a new product to market to Fortune 500 companies with existing plant capacity fully utilized. 
 

What type of companies benefit from toll manufacturing? 

The size of the company does not determine whether toll manufacturing is beneficial. Tollers like Nation Ford Chemical (NFC), located in Fort Mill, SC, USA, have worked with companies of all different sizes. Tollers have products that run 24/7 in dedicated equipment, as well as those that run on a campaign basis to meet sales requirements.
 

NFC has been making products for ColorChem International, a dye manufacturer for the plastics industry, for more than 20 years.
 

“NFC has always been a reliable partner to work with in production of our coloured dyes,” said Tom Shakely, ColorChem. “They are able to meet all of our production demands and work closely with us to ensure we are always staying up to date on new and changing regulatory requirements. Toll manufacturing with NFC allows us the ability to manufacture a product domestically without having to invest in equipment at our facilities.”
 

NFC also has relationships with several of the largest chemical companies in the world.

Every toll manufacturing company has different expertise including speed to production, on-site analytical capabilities, previous chemistry and equipment experience and engineering competence. Since every company and process have different requirements, it is important to find a tolling partner that can meet the majority, if not all of the needs. It is also important to ensure that the values of both companies align to allow for a successful long-term relationship. 
 

While in both cases a third party is used to manufacture a product, the responsibilities for each party differs between toll manufacturing and custom manufacturing. In a typical toll manufacturing agreement, the company outsourcing the production will provide all raw materials to the third-party manufacturing company. Under a custom manufacturing agreement, the third party will typically perform all tasks required to manufacture the desired product, including purchase of raw materials. 
 

How involved is the outsourcing company in the manufacturing process?  

Involvement level is completely up to the outsourcing company. Tollers have some customers that have a dedicated office on site and keep it staffed with their own employees. Other companies simply provide a schedule of when they need product delivered with no interaction during production.