The manufacturing landscape can be complex and challenging to navigate, particularly for new companies or those that rely on specialized fabrication, machining, and assembly. While outsourced partners are an excellent resource for offloading some aspects of the manufacturing process, turnkey manufacturing provides a depth of expertise and support that many companies need to compete effectively and thrive.
In addition to the increased production capacity and engineering experience that most outsourced providers can offer, turnkey contract manufacturers often partner with companies from product conception all the way to high-volume output. In this article, we will review exactly what turnkey manufacturing is, the benefits of this approach, and how to evaluate if turnkey contract manufacturing is the right choice for your business.
What is Turnkey Manufacturing?
“Turnkey” is a term used to describe any situation where the end customer receives a product that is fully ready to use or distribute. Manufacturing is no different, and turnkey solutions can cover every aspect of product development and production, from design to procurement and final assembly.
Companies that partner with turnkey manufacturers are typically only expected to provide as much input as is needed to keep product development moving until full production specifications are determined, and the product is formally launched. This input could include essential customer requirements, initial design files, competitive and differentiated feature sets, and much more.
Many companies only want to create and own intellectual property for their product, and they are not interested in developing the capabilities to manufacture or further vertically integrate. When partnering with a turnkey contract manufacturer, companies can primarily focus on sales, product marketing, and volume requirements, not on managing numerous relationships or a complex supply chain.
Turnkey Manufacturing Solutions
Companies partner with a turnkey manufacturing provider at all stages of the product development process. Once product development has been initiated (e.g., concepts, prototypes, etc.), companies then seek to partner with a turnkey manufacturing contractor who can help with the following:
Further product development resources like ideation, engineering, rapid iteration, testing, etc.
Sourcing, procurement, and supply chain management.
Manufacturing expertise in a particular type of fabrication, precision machining, or assembly (e.g., electromechanical).
Low and high-volume production, depending on demand.
Although these solutions can be helpful for companies in nearly any industry, some industries rely heavily on turnkey manufacturing for development and production. Unique or especially demanding production capabilities typically require outsourced support to varying degrees. For example, the medical device industry often must meet strict regulations for the manufacturing processes, documentation, and environment (depending on FDA class of the products). Turnkey contract manufacturers, like Applied Engineering, can offer clean room capabilities and ISO-certified processes.
Industries that commonly rely on turnkey contract manufacturers include:
Contract turnkey manufacturers undertake the process of achieving and maintaining these certifications and specialty capabilities – which helps their clients get up and running quickly, with minimal investment.
What is the Difference Between Contract Manufacturing and Turnkey Manufacturing?
While contract manufacturers provide robust sourcing and production capabilities, turnkey support is usually more holistic and comprehensive. In practice, this means that turnkey manufacturing contractors will also provide support across product design from a simple idea through market viability and commercial readiness.
Key Benefits of Turnkey Contract Manufacturing
Turnkey contract manufacturing offers substantial benefits to companies of all sizes and across a wide variety of industries. Some of the most significant benefits include:
Maintain one relationship with a single point of contact. Consolidating vendors will greatly simplify project management, budgeting, invoicing, and much more.
Benefit from deep industry expertise and quality benchmarking offered by a manufacturing partner with industry specialization.
Speed up time to market with the first product and subsequent versions.
Focus on core business operations like customer service, marketing, sales, and new product development or market research.
Forego the significant overhead of building out manufacturing infrastructure, hiring staff, managing a supply chain, warehousing materials, and other costly investments.
Easily facilitate international expansion without adding new facilities.
When to Consider Using a Turnkey Contract Manufacturer
There are many different ways to partner with a turnkey contract manufacturer. Some companies handle aspects of product design and assembly themselves, while others outsource the entire process. Here are a few key considerations to guide your decision-making process:
Do you have specialty needs throughout the manufacturing process due to strict industry regulations, unique materials, international sourcing, etc.?
Are you a small organization that’s seeking to scale without the burden of building your own manufacturing facility?
Does your company focus specifically on sales and distribution? Some companies focus on building effective sales and distribution arms. While they have effectively created sales channels and developed relationships with key buyers, they don’t invest in materials, machines, staff, or facilities required to manufacture products.
Applied Engineering has been serving “leading edge” clientele in the technology, life sciences, medical, semiconductor and other industries with robust turnkey contract manufacturing services for over 40 years. From complex assemblies to specialty components, we help companies with projects ranging from food preparation automation to large capital equipment. With deep expertise throughout the product development, supply chain, and manufacturing processes, we’re ready to listen closely and lend a helping hand exactly where it’s needed.