It is difficult to determine which process is better of the two – Toll Manufacturing or Contract Manufacturing.
It depends upon the source company’s needs and capabilities and if the source company wants to maintain exclusive control and a level of secrecy about the source of raw material or semi-finished product which is going into production. If they do then they should go for Toll Manufacturing. However, the source company should also consider the following:
- Does the manufacturing company have the capability to handle vendors for the raw materials to be used.
- Does the manufacturing company have the proper process know-how and GMP certification.
- Does the manufacturer have adequate manpower to perform the entire product manufacturing activity.
- Can the manufacturer carry out the activities within the time deadlines?
Depending on their findings the source company can also go for Contract Manufacturing.