The Manufacturer Behind the Logo was published for client AVMOR
Here’s a term pertaining to the professional cleaning industry that many of us are unaware of: contract manufacturing (CM) or contract blending (CB). Canada is beginning to play a significant role in CM, especially in the professional cleaning industry, so it’s time we should know more of what this is all about.
Contract manufacturing is slightly similar to outsourcing, which is when a manufacturer (the lead manufacturer) enters into an arrangement with another manufacturer (the subcontractor) to make parts or components for the lead manufacturer’s products. The lead manufacturer then uses those parts and components to produce their own products and equipment.
However, contract manufacturing is different. The CM makes more than just parts and components. It creates, develops, makes, may test, and may make product suggestions for the lead manufacturer. In other words, the CM is in charge of the entire manufacturing process from start to finish and this can include testing and quality control. It’s important to note, though, when produced, the product bears the name of the lead manufacturer.
Why would a manufacturer of cleaning solutions turn to a CM? Historically, most manufacturers in the professional cleaning industry made their own products. The ingredients and manufacturing processes were often considered top secret. However, according to Mattie Chinks, President of Avmor, a 70-year-old Canadian manufacturer of professional cleaning products and a contract manufacturer, “times have changed.”
According to Chinks, high production and labor costs have made it much harder for jansan manufacturers to produce new products. “The entire process of hiring and training new people, finding the space to manufacture the product, setting up a production process, checking quality control, and many other things have become cost-prohibitive.”
Because of this, many manufacturers in the professional cleaning industry find their time and resources are better spent testing and developing new products, as well as product research. Then they turn to the sales and marketing of those products.
Something else that draws manufacturers to work with CMs is the regulatory environment we now live in. Many manufacturers want to market their products in Canada, the U.S., and Europe. These countries may have different rules and regulations for the same products. An astute CM will be aware of these rules and regulations, which is a major time and cost saver for the lead manufacturer.
Benefits of Contract Manufacturing for the Cleaning Industry
Now that we have the gist of what contract manufacturing is all about, does it just benefit the manufacturers that want to put a lid on their expenses?
The answer is no. Many industry leaders say that it has helped the entire industry. For instance, it has helped jansan manufacturers spend much more time developing innovative products that are more effective, healthier, and are of higher quality. In fact, many companies that now work with CMs/CBs have changed their entire business model. They have gone from manufacturing their own products to making product development and innovation their core competency.
Taking this a step further, the lead manufacturer may also ask the CM to put the product through more tests and evaluations. If the CM has their own laboratory, then it’s like “having a second pair of eyes examining a new product, which often leads to additional enhancements,” adds Chinks.
This touches on another benefit for the industry. When one company is focused on innovation and another is focused on production, the end result is that the product is delivered to the end-customer faster. This is likely why we are seeing many more new products and equipment at the ISSA Canada and the ISSA U.S. tradeshows then we have in years’ past.
What may be the most significant benefit for end-users, however, is the reduced costs. As mentioned earlier, hiring and training new people, finding production space, developing a production method, all have been eliminated with CMs because they already have those functions in place. This is a cost reduction that the lead manufacturer can then pass on to their end-customers.
Concerns and Downsides of Contract Manufacturing
While there are several benefits, to fully understand contract manufacturing, we can’t ignore some concerns manufacturers may have about working with a contract manufacturer/blender. At the top of the list is hiring the wrong CM. To help prevent this, Chinks advises manufacturers to do their due diligence and look to see if the CM/CB has earned credentials such as the following:
- ISO-9001, a set of international standards verifying quality management practices.
- cGMP procedures, refers to manufacturing practices that assure products are manufactured consistently of high quality.
- DIN and NPN, confirms that products are safe, effective, and authorized to be sold in Canada
- Is a US Food and Drug Administration licensed establishment, certifies manufacturing procedures follow specific guidelines addressing a number of issues including safety.
- CTPAT Certification, designed to protect the entire supply chain that products transported around the world are safe of materials that could be used for a terrorist attack.
Additionally, what is often referred to as “prioritization,” can become a problematic issue. Many CMs are producing products for several different lead manufacturers. In some cases, certain companies will be given higher priority due to size, scale, and profits for the CM. This can be a big drawback for the smaller lead manufacturer.
“These are issues that the [lead] manufacturers must be concerned about,” Chink says. “Overall, however, there are many benefits for the entire cleaning industry and that is what is most important to us.”
Robert Kravitz is a frequent writer for the professional cleaning industry.
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