Outsourcing manufacture

This guideline describes methods to help the chemical processing industry apply the CCPS chemical process safety concepts to outsourced manufacturing operations, specifically the tolling vendor-client relationship. In addition to the focus on process safety, information and examples provided in this text foster good practices relative to community and worker health, and environmental responsibility. 

Toller An outsourced manufacturing company contracted to process materials to another company s specifications. Sometimes called third party service provider, toll processor, supplier of outside services, external contract manufacturer, contract processor, contract manufacturer, custom chemical manufacturer. 

Guidelines for process safety in outsourced manufacturing oerations / Center for Chemical Process Safety, p. cm. 

Your general aim should be to improve product quality, increase productivity, and reduce the cost of development and manufacture. However, productivity is not easy to measure with multiple products on multiple lines, each at a different stage of maturity. This makes comparisons to detect changes in productivity difficult, if not impossible. However there may be factors common to all product lines, such as labor costs. Merely outsourcing manufacture to developing countries may not improve your productivity. The labor costs may reduce but rework and warranty claims increase. Productivity is only improved if product quality has been maintained. Certain processes may also be common to more than one product line and hence improving productivity of common processes can have wide-ranging impact. 

If you are located on or near an airport and a Boeing 747 descends upon your factory, can you claim it to be an event outside your control when you chose to site your plant so close to the airport You may have chosen to outsource manufacture to a supplier in a poorer country and now depend on them for your supplies. They may ship the product but because it is stopped at customs due to a change in government of the country concerned, it doesn t reach its destination - hence you may need an alternative source of supply. 

This applies to contract personnel as well as employees. How to communicate chemical reactivity hazards is not a trivial matter, especially when contractors are involved. Confidentiality agreements may need to be put into place, and issues may need to be addressed on a case by case basis. Communication with contract personnel and broader outsourced manufacturing issues are addressed by Early (1996) and CCPS (2000). 

CCPS 2000. Guidelines for Process Safety in Outsourced Manufacturing Operations. New York American Institute of Chemical Engineers-Center for Chemical Process Safety. 

Biopharmaceutical companies are highly diverse not only in their products but also in their size, capabilities, and approaches to development. Some biopharmaceutical companies (especially small companies) outsource part or most of the analytical work, some outsource manufacture and filling, and some invest and develop expertise to do everything in their own facilities. Most biotechnology companies are small, and sometimes it is faster and more cost-effective to outsource a task that requires expertise or expensive pieces of laboratory equipment not available in the company. Nevertheless, the analysts in the company will... 

After recent consolidation and globalization efforts, many chemical companies are now geared towards creating better value for customers. The main way of achieving this is to offer customer-specific products and services. Bundling commoditized products with customer-specific value-added services allows customers to outsource manufacturing tasks and services. 

Guidelines for Process Safety in Outsourced Manufacturing Operations, G-68 2000. 

The effective use of assets starts with supply chain design. In the early days of supply chain management, manufacturing and distribution processes were insourced. Companies owned their bricks and mortar, and products were made and sold within the same region. Today s supply chain is largely outsourced. Manufacturing and distribution... 

In parallel, companies have become more dependent on third-party trading relationships. Outsourced manufacturing and logistics are today s reality. Companies today find that they need to plan globally to execute locally across a diverse network bidirectionally yet, the functional leaders are not incented to build value networks. To effectively plan, companies need to value the important, but the metrics reward the urgent. 

Today s new graduates are entering the world of supply chain without a manufacturing background and companies have outsourced manufacturing processes as a result, manufacturing is the least understood of the supply processes by the third- and fourth-generation pioneers. 

In this transition, many learned the hard way that while they could outsource manufacturing, they could not outsource the responsibility for their supply chain. As more and more manufacturing was outsourced, power within the organization shifted from the manufacturing organization to the supply chain team. 

Choy KL, Lee WB, Lo V (2002) An intelligent supplier management tool for benchmarking suppliers in outsource manufacturing. Expert Syst Appl 22 213-224 Corominas A, Mateo M, Ribas I, Rubio S (2015) Methodological elements of supply chain design. Int J Prod Res 1-14... 

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