Though business is booming for contract manufacturers, the industry isn’t without its challenges. Marketers who want to go it alone should be aware that it’s not all smooth sailing, and those who work with a partner might find themselves relieved to have avoided these pitfalls.

Challenging lead times: Since raw material suppliers are keeping less in stock these days, it can take over month for contract manufacturers to get the necessary ingredients into their production lines, said Eugene Ung, CEO of Best Formulations.

Disappointing supplies: While the quality standards for contract manufacturers remain very high, some raw material suppliers don’t hold themselves to the same standard, said John Kelly, vice president of sales and marketing at Nature’s Products Inc. And according to Wayne Gorsek, founder, chairman and CEO of DrVitaLab.com, as many as 50 percent of products are reported as failing by consumer lab reports. “While there are some great raw material companies out there, there are some others that don’t operate to those same high quality and service levels,” he explained. As a result, agreed Ung, testing can reveal that the ingredient’s “fingerprint” bears no match to what was promised. Then, it’s back to the drawing board.

Equipment considerations: Nutritional Engineering opts to keep a stock of spare parts to ensure it can repair equipment on a moment’s notice without compromising timelines. For contract manufacturers, proactive budgeting and time management are key: “We budget for new equipment to improve our business, have backup equipment in case something goes down, and put into place a daily maintenance check to ensure all systems are in place,” said Ginny Laoudis, the company’s CEO.

Keeping up with advancements: As the industry evolves, contract manufacturers are called upon to add the latest technical resources to their overhead structures, said Tee Noland, chairman and CEO of Pharma Tech Industries. “This puts pressure on margins,” he said, “which in turn puts pressure on customer pricing.”

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