The client operates a successful FMCG business, sourcing its products through a single Asian manufacturer. The risks of brand damage as a result of supply disruption at the established source became abruptly greater while at the same time a need anyway arose to establish dual sourcing from within the Asia low cost arena. Alternative supply was required to facilitate growth, to reduce overall single source supply risks and also to drive cost reduction and improve quality.
The project was rapidly instigated to identify global contract manufacturing options – taking in the ability to manufacture in Asia, the UK and mainland Europe. The project began with more than 80 candidate companies considered.
From our client’s perspective, a robust manufacturing and product supply approach was required to identify candidate companies, evaluate their ability to meet our clients needs and establish a position for our client to progress contract negotiations to achieve timely ramp up to full production. All to be completed within a short 5 month timeframe.
This project was required to complete the search and qualification stage within 5 weeks to allow as much time as possible to move to full production ramp up within the specified timeframe.
A systematic process was employed for identifying and assessing potential partners with manufacturing capability. To ensure the potential partners aligned with the Client’s requirements, a robust set of business criteria were developed to provide the basis for the various levels of assessment throughout the process. A funnel of activity was then created so that the large number of potential contract manufacturers identified in the early stages could be filtered through a series of increasingly detailed assessments to produce a prioritized list of potential partners that scored highest against the key business criteria. Identified partners were then contacted and a comprehensive one day site visit completed to provide next step recommendations.
The 14 organisations were ranked based on the total score across the different business criteria to create a prioritised list of potential suppliers and the top 5 companies were contacted in order to evaluate their:
Upon completion of site visits the key business criteria scores were re-evaluated, moving some up and down. In addition key strengths and weaknesses were established together with associated risks and conclusions.
In addition, we examined the Quality, Cost and Time dimensions of risk for four defined stages of implementing contract manufacturing:
Taking a risk management perspective we compared the major risks associated with each of the potential partners that our client may encounter during this transition.
The capability and maturity of the candidate organisations that emerged through this process was sufficient to enable our client to proceed into a business relationship.
The approach that we took enabled us to highlight various risks relevant to the individual companies and for our client to consider best fit. Indeed the results of our work have highlighted the need for our client to fully re-evaluate their long term strategy with regard to contract manufacture.
As a result of our intervention we are now working alongside our client supporting them during the initial stages of setting up the contract, handing over intellectual property and through the stages of initial production ramp up.