Toll Manufacturing vs Contract Manufacturing
With all the advances in technology and manufacturing, speed and efficiency is the key to success in any business and industry. This is especially true in the manufacturing industry where production needs to be scaled with pinpoint accuracy. With so many technological advancements now available, automation, especially with toll processing, is the best way to run a large scale operation efficiently with minimal downside risk or a heavy upfront capital investment .Toll Processing, also known as toll manufacturing, is defined as a company with specialized equipment processing raw material or semi-finished goods for another company
Topics:
- What is contract manufacturing
- Difference between toll processing vs contract manufacturing
- How to select a toll processing company
- Benefits of toll manufacturing
What is Toll Processing?
Toll processing or toll manufacturing is a service provided to companies that need to outsource specific segments of their operation’s production. Toll processing allows for companies to meet surges in demand that they may not have anticipated or lets companies fill additional orders when they are at capacity. Tolling allows them to meet their customer’s orders without delays and without having to purchase equipment to run the material themselves.
For many companies, the process by which they develop their product is a fixed operation based on a singular method or product. That means that any variation off this product would cause a major headache for the manufacturer. Toll processing can allow these companies to meet specific customer orders without having to interrupt the current ebbs and flows of their business.
Toll processing allows customers to develop new products and bring them to market without having to capitally commit to equipment. The benefit of this is that companies can now create new products and test them on the market for a low cost. This in turn will allow them bring product to market and sell these products without ever having to make an equipment purchase.
Difference Between Toll Processing vs Contract Manufacturing
Toll processing
is where one company has the resources and capacity to process raw material (semi-finished product) that one company or a third-party provides them. The benefit is mutual for both the tolling company and the company that provided the product because the tolling company will provide the rest of the services for a fee or referred to as a toll. The company that provided the material can then take the material and send it to the end customer at a mark up without having to put up all the capital required to build their own facility to process the raw material themselves. Even if they did invest in buying the equipment, they do not have the experience to screen as efficiently and on a grand scale as the tolling company does. So it is beneficial to both parties because of the amount of clean product the tolling company can put out per hour whereas the company providing the material, would not be able to screen as efficiently or on such a large scale.
Contract manufacturing
Similar to toll processing, contract manufacturing in many ways and at times are used interchangeably with one another . However “company b” will actually be purchasing a finished product from “company a” which is the contract manufacturer / tolling company. This is advantageous because it is creating a supply chain vendor for a custom made product, private label or branded label product. The contract manufacturing company is responsible for making the products according to agreed specs, meeting the delivery deadlines and also sourcing of all the raw materials that will be used during the process. This process can open up a very fruitful relationship where “company b” can extend their product line with an almost “on-demand” service from the tolling company which will in turn help both parties effectively reach their manufacturing objectives.
Now that we have covered that, let’s get into the nitty gritty. Next let’s take a look at some key factors you need to consider while choosing your tolling company!
How to select a contract manufacturing organization
Now that we’ve distinguished the differences are between toll processing vs contract manufacturing, let’s get into how you can select the perfect partner to help you streamline your business and scale up! Below, we put together a mini outline of things to look for when looking for the perfect fit. This is however, just a guide but it is what Elcan Industries offers our clients so we should use this as a benchmark for this blog post.
Select a team of professionals
Your number one priority when searching for a toll processing company to process your raw materials, should be to select a team of professionals who’s goal it is to ultimately act as a integral part in the success of your business. The toll processing company should give you full confidence in their ability to deliver a superior product while ensuring you that your business continues to grow and succeed with minimal supervision on your part. The tolling company should not only simplify your processes, but should help you reduce your risk, give you a competitive advantage, and add value to your bottom line. Bare in mind that your processor is the final link in the chain between you and your end customer. That is why the next point is critical to your success.
Review quality control
This is a very important part of the process because you want to make sure that the processor is continuously making adjustments and importations to their operations and facilities to avoid contamination; over weight or underweight packaging, off spec material, late shipments, etc. It also helps tremendously to be able to call the main line and speak to a human at all times and not a machine. Elcan Industries has a dedicated person on staff to handle any and all calls without any robots or machines.
Visit the plant
Whenever possible, we strongly urge our clients to come visit our plant. This is a very good idea because it will give you a full picture of what goes on inside the plant where your raw materials will likely be for an extended period of time during processing. Prior to a plant visit, we offer our clients a feasibility test where we go over their needs and what their overall goals and expectations are. We take a full day plant tour and run numerous tests and scenarios for our potential client until we get their end product down to the exact quality and spec they are looking for. You want to make sure you leave the plant with detailed specifications, particle size, moisture content, percentage yields, oversize and undersized, bulk density and more. At Elcan we run particle sizing tests right site on our state of the art Malvern. Depending on the product being tested we allow companies to run on our Tumbler screening machines, Hi-Sifters or on our Elbow Jet Air Classifier as well!
Summary
- Select a team of professionals
- Review quality control
- Visit the plant
Toll Processing vs Contract Manufacturing
Elcan Industries offers companies the opportunity to develop new products using our advanced sieving systems. More specifically, Elcan can help companies achieve finer grades of product that were previously not obtainable by the client using standard sieving methods like air classifiers, ultrasonics and more. Elcan Industries has 9 bays dedicated to toll sieving and has several truckload capacities at our new facility. Elcan offers lab and quality services as well to ensure that only the highest-grade product is being shipped out to customers. Elcan also offers mixing/blending, repackaging, and electromagnetic separation on a toll basis for customers. All the machines we use in our tolling facility are available for sale. This gives Elcan insight into methods that normal OEMs are not capable of achieving.
Call today to find out more about our toll processing services!
Local calls: (914) 381–7500
International: (800) 283–5226