Any organization that requires physical materials for their production processes usually are acutely aware of how critical supply chain efficiency is to overall profitability and timely delivery of materials to customers. A well-run supply chain can be the difference between a company being able to meet customer demands and falling behind, losing out to competitors. Inefficiencies in the supply chain can also lead to material waste and higher production costs.
When disruptions hit such as the container ship stuck in the Suez Canal or the more recent Covid-19 pandemic-related factory closures, supply chains that are already finely tuned to achieve just-in-time levels of efficiency are stretched to the breaking point, and in many instances across industries, shut down entirely. For chemical manufacturers to protect themselves from the vicissitudes of supply and demand, many are turning to toll manufacturing through partners such as Applied Chemistries as a way to insulate their business from these types of disruptions.
Toll manufacturing is defined as the process where a company outsources the production of certain materials or products to a third-party manufacturer. The key advantage of this type of arrangement is that it can help to improve supply chain efficiency by giving companies more flexibility and access to manufacturing capacity on an as-needed basis. In today’s economy, where business conditions can change rapidly, this type of agility can be essential for survival.
Toll manufacturing can also provide other benefits such as access to new markets, cost savings, and risk reduction. In many cases, a company may not have the internal manufacturing capacity to produce a certain product or material, but their toll manufacturing partner does. This gives the company the ability to enter new markets quickly and without a large investment in manufacturing equipment and infrastructure.
Cost savings can also be realized through toll manufacturing, as the company can take advantage of the economies of scale that the toll manufacturer has achieved. In addition, by outsourcing production to a third party, the company can reduce its exposure to risk associated with fluctuations in raw material prices and changes in customer demand.
For chemical manufacturers looking to improve their supply chain efficiency, toll manufacturing can be a valuable tool. By outsourcing production to a third-party manufacturer, companies can gain the flexibility and agility they need to respond quickly to changes in demand and keep their businesses running smoothly. In addition, toll manufacturing can provide access to new markets and cost savings that can help to improve bottom-line results.
Choosing the Right Toll Manufacturing Partner
Weighing Supply Chain Efficiency vs Partner Expertise
The goal of any supply chain manager is to ensure the entire system is agile, efficient, and effective. Quick enough to respond to changes in material availability, logistics and labor costs, customer requirements, and so on, while ensuring that the entire process makes critical components and materials available to production facilities when they need them. In other words, supply chain efficiency is all about maximizing the flow of materials and information through the system.
When considering a toll manufacturing partner, it’s important to weigh their expertise against your need for supply chain efficiency. In some cases, it may be more important to have a partner that can provide the high level of expertise needed to produce a certain product or material. In other cases, the primary concern may be ensuring that the partner can provide the capacity and flexibility needed to keep the supply chain running smoothly.
The best toll manufacturing partners are those that can offer a balance of both expertise and supply chain efficiency. A partner that has a deep understanding of your industry and your specific needs can help to ensure that the products and materials you need are produced to the highest standards of quality. At the same time, a partner with a robust manufacturing infrastructure and the ability to scale up or down quickly can help to keep your supply chain running smoothly and efficiently.
When choosing a toll manufacturing partner, it’s important to consider both their expertise and their ability to provide the flexibility and capacity you need to keep your supply chain running efficiently.
Toll Processor Qualities to Look for
Internal Material Control
The ability of toll processors to deliver consistent and timely raw materials to manufacturing plants is a direct outcome of their efficiency. Conversely, partners who aren’t able to effectively manage procurement and logistics can easily grind manufacturing schedules to a halt, impacting the bottom line. As toll manufacturing partners of choice for some of the most well-known manufacturing industries across the country, we keep a real-time eye on projects to ensure timely delivery.
Scalability
The scalability of a toll processor is essential for companies with growth plans. The ability to effectively manage increases and decreases in production volume is directly linked to the size and flexibility of the partner’s manufacturing infrastructure. To support the scalability needs of our clients, we have well-equipped facilities that are equipped with the latest technology and can be quickly ramped up or down to meet changing demand.
Flexibility
In today’s rapidly changing business environment, flexibility is critical to success. The ability to quickly adapt to changes in customer demand, material availability and other factors is essential for any company that wants to stay ahead of the competition. When choosing a toll manufacturing partner, look for a company that has the flexibility to change course quickly and efficiently to meet your changing needs. At Applied Chemistries, we pride ourselves on our ability to be flexible and adaptable.
Proper Trial & Pilot Management
Before the material even enters production-scale equipment, our expert team helps solve technical concerns to find the most effective technique to satisfy the client’s production, quality, and environmental sustainability standards while optimizing energy and labor inputs.
Extended Capabilities
Some toll processors can dry, mill, and blend, but specific capabilities enable the best to answer challenging and complex chemical problems. These additional capabilities range from cleanroom production, dedicated blending stations, in-house R&D and analytical labs, product development, and private label processes.
Packaging Flexibility
Don’t undervalue the value of packaging to your supply chain. Whether you need to pack in bulk forms so that your material fits with the next manufacturing phase, or package, bottle, and label completed items and send them straight to your customer distribution channels, a toll processor should be able to handle it all.
Order Flexibility
Toll processors that offer true order flexibility give you the ability to produce what you need, when you need it, in the quantities you need it. This includes the ability to accept small or large orders and quickly adapt to changes in demand. Applied Chemistries always works with our clients to meet their specific needs and requirements.
Quality Control
The quality of the finished product is always the top priority. Make sure that your toll processor has a robust quality control program in place to ensure that your products meet all safety and quality standards. Industry-recognized quality certifications and periodic inspections by outside auditors to ensure that all quality standards are exceeded.
Conclusion
Toll manufacturing can be a great way to improve the efficiency of your supply chain. When choosing a partner, make sure to look for a company that has the experience, capability, and flexibility to meet your specific needs. Applied Chemistries is a leading toll manufacturer with over 50 years of experience serving clients in a wide range of industries. Contact us today to learn more about how we can help you improve your supply chain efficiency.