To this point, we’ve covered the steps of partner selection, facility tours, audits, and quality control. These are all important components of the full manufacturing journey, but the reality of bringing a product to market is a costly one. Not only are unforeseen expenses an unpleasant surprise, but they also create delays in production, force brands to compromise budget in other areas such as marketing or may impact the end price for consumers. While the hope is that manufacturing contracts clearly state the costs and corresponding services received for your investment, surprise costs can come up along the way, such as laboratory time, achieving certifications, and transportation between manufacturing partners, Edvinsson says.
In her experience, Szymanowska shares that products are lost to testing, sampling or breakages; storage, especially when own raw materials are shipped in advance; and delays across the supply chain can all lead to unexpected costs.
One hidden cost brands sometimes tend to overlook is the cost of using unstable ingredients, Meppem says, which then leads to increased manufacturing and stability overages required in formulations. He cautions, “Another hidden cost is the cost of testing ingredients in small batches. In large runs, the test costs are spread across the batch per kilogram. This can sometimes lead to small batches not being suitably tested, which is not recommended.”
De Jong adds, “Remember that you get what you pay for and value for money means more than just the lowest cost.” Liability considerations are a key criterion in selecting a partner. They are also an important negotiation point in achieving contracts and prices that suit you. He states: “Balancing risk exposure, intellectual property and business benefits against contract price can be a great way to arrive at a position with which you are comfortable. For example, if in the course of the project, efficiency gains increased output; who is entitled to that extra product and how does that impact the contract price?” Building upon liability, companies need to be prepared in advance for potential audits when regulators come knocking. Negative findings can have financial as well as legal implications that any brand will want to avoid.
Who’s responsible for the red flags?
Brand companies and manufacturers will need to certify that products and materials are made to a requisite standard, and the company responsible for the ‘release for sale’ of the finished goods is ultimately responsible for non-compliance across the manufacturing line, explains Meppem. He adds: “Audit inspections should always outline manufacturing deficiencies. That allows the industry to follow a principle of continual improvement, so that quality standards do indeed improve. It is the seriousness of the deficiencies which should be noted at specific facilities.”
Guber highlights that common negative findings include incomplete traceability of single products, missing documents, or discrepancies between quantities recorded in writing and quantities stored in the system.
Taking the time to select the right partner, invest in the relationship over time, and work collaboratively can lead to a successful market launch, and set the stage for continued growth into the future.