Outsourcing chemical processing : Benefits & considerations
Ben Beattie , manager at toll processing and contract manufacturing specialist Forbeats , explains the benefits of outsourcing and highlights which factors to consider when looking for a partner
Whilst the chemicals industry has historically been quite resilient , it is not immune to legislative , political and economic tensions and challenges and has faced several disruptions over the past few years .
In addition to lingering effects of the global pandemic , the sector has had to deal with regulatory changes and increased bureaucracy because of Brexit , along with other major supply chain disruptions , raw materials and labour shortages , and massive energy price increases . All of this has been aggravated by the conflict in Ukraine .
As these factors continue to have an impact on stakeholders across the chemical industry , disrupting production and slowing operations , toll processing and contract manufacturing companies who offer comprehensive end-to-end services have a vital role to play .
Defining tolling & contract manufacturing
One of the commonest concerns about outsourcing is losing control over the process . As such , choosing whether or not to outsource can be a difficult decision , as it inevitably means that a part of the production process is surrendered to a third party .
Which type of partner is used will depend on which steps , or how much of the process , manufacturers are willing to delegate . Although contract manufacturing and toll processing are both ways to outsource one or more processes to a third party , there are important distinctions between the services offered .
With contract manufacturing , the customer creates a formula and specifies its requirements . The contractor may often be given the responsibility of sourcing , purchasing and acquiring raw materials before using them to make the final product .
Toll processing , however , typically keeps control over raw materials in the hands of the customer . Materials and product specifications are handed over to the toll processor , who delivers a finished product based on the customer ’ s instructions .
As with any partnership , there are key factors to both approaches : toll processing offers greater control over ingredients and allows customers to closely protect product formulations ,