PEKO Precision Products

Which Companies Need An Equipment Contract Manufacturer The Most?

Posted by Scott Baxter on Mar 24, 2015 9:44:28 AM

ConsumablesContractManufactruringrazorbladesAt PEKO Precision Products, we work with many different kinds of customers that need help in Contract Manufacturing for their Equipment, Instrumentation and Machinery.  Many different kinds of companies approach us for help in manufacturing their product.  Each company is an OEM with its own challenges that have led them to turning to a CM, but in the end, they all simply need their product built with their Quality, Cost and Delivery options met.  Let's take a look at some of the common types of customers that are highly in need of a qualified Contract Manufacturer.

  • Large consumables OEMs without Mechanical Manufacturing specialties - This is a type of OEM that is usually highly in need of an excellent Contract Manufacturer.  Some examples might be chemical companies, medical assay OEMs and Energy/Oil companies.  OEMs like these are highly specialized in the manufacturing of their primary revenue source, the consumable product.  These are usually high volume products that might require a kind of specialized processing at their customers' site.  The OEM hires a sophisticated CM to that can produce the equipment necessary to process the consumables for the customers.  We call this the Razor and Razor blade concept.  The customer is the expert in creating the consumable "blades" and we are the expert and creating the low volume "razor handles" to help sell more consumables.  Some great examples of these types of products would be Reagent Chemical Analyzers, Chemical Printing Process equipment, Medical Imaging Machinery and Industrial Optics Polishing equipment.  For OEMs that have a strong consumables presence, choosing a highly experienced CM to manufacture the processing equipment is an incredibly smart use of resources and capital.  
  • Venture Capital Backed Capital Equipment Start-Ups - In many cases, a group of extremely talented individuals come together to create innovative equipment that has the ability to grow once it is scaled properly.  These folks are usually huddled around their machine in a garage or warehouse environment, piecing together their brain child in the hopes of finally getting a workable prototype.  Once they do, they have to prove to an investor or group of investors that with the right injection of capital, the business can flourish and be profitable for all parties.  All too often, however, the Manufacturing aspect is not properly respected.  It takes a highly skilled Contract Manufacturer to take a working prototype and turn it into a scaleable and manufacturable product ready for quantity builds.  The Manufacturer must have a skilled engineering and commercialization program to move the product into a successful manufacturing rollout.  Furthermore, this Contract Manufacturer must be able to ramp up or down to meet the demands of the customer.  Essentially, this Contract Manufacturer must be skilled enough and have the system in place to act as the Manufacturing arm of the partnership.  This partnership trifecta is essentially Money + Technology + Manufacturing 

At the end of the day, just about any company can use a CM under the right circumstances and find that it is beneficial to their business.  But the facts are that Large Consumables OEMs and Well Financed Startups are the types of companies where a Contract Manufacturing partner is almost a necessity.  For the larger OEMs, a CM enables them to keep their resources in use for producing their high margin consumables products.  For the startups, a CM helps them and their investors answer the question, "How are we going to get these things built and ramped up?".  Great CM's like PEKO Precision Products know how to handle these customers with care and ensure successful product launches and delivery.  For more information on how PEKO has done Contract Manufacturing for companies like yours, contact me direct at sbaxter@pekoprecision.com or click below:

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