Selecting the right Contract Manufacturer (CM) is the most important manufacturing decision you’ll make. It is critical to your success and you get one opportunity to do it right. Here’s an overview of how to approach the request for quote process.
1) Ask for recommendations
Talk with companies in your trusted network who have manufacturing experience to see what factories they have had a good experience with in the past.
2) Make a list
Use the information you get from your conversations with peers to generate a differentiated list of 5-10 CMs.
3) Create an RFQ
The Request for Quote package (RFQ) provides the CM with sufficient info to understand the product and provide a quote for the cost of goods sold (COGS), tooling, schedule, etc. There is always a balancing act, as you don’t want to provide so much info that your IP is overly exposed.
4) Provide the right details in your RFQ
Overview (Word Doc)
BOM (Excel Doc)
5) Narrow down your list
Select around 3 to 5 factories based on your product category.
6) Get NDAs in place and release the RFQ
7) Visit each factory
The best time to visit is roughly one week after sending the RFQ. They have had a chance to review the documents and create questions.
8) Talk to references
Ask the CMs for intros to their customers to reference check.
9) Create a CM Decision Matrix
Base your decision matrix on the following categories:
10) Negotiate with the finalists
Narrow your list down to the top 2 to 3 CMs and negotiate the biggest line items.
11) Select the winner
After picking a CM, be sure to leave the others on good terms.
And with that, you are officially on the road to pre-production!