What’s The Minimum Production Run Size For Contract Manufacturing?
Every manufacturer has minimum production run requirements. If you’re wondering what the minimum run requirements are for Intran – or why manufacturers have minimum run requirements – this article is for you.
How The Production Run Size Is Determined
Good contract manufacturers revolve their business around giving their customers what they need, but certain operation costs still need to be taken into consideration when preparing a quote. Any contract manufacturer, including us, would love to fulfill orders of any size, but sometimes it’s not feasible to do so. That’s why it’s standard practice for contract manufacturers to set a minimum production run size, which is determined by the following factors.
1. Shipping Container Size
Many, if not all, overseas manufacturers will only fulfill large orders because the most economical option for them is to fill entire containers to ship by boat halfway across the world. The manufacturer’s shipping method – may it be by truck, rail, cargo vessel, or air freight – greatly affects their minimum production run size. It’s worth mentioning that manufacturers who ship via truck or air freight are usually able to fulfill lower volume orders.
Generally speaking, US and Canadian companies looking for a small run production should look to Mexico. Mexican manufacturing is a great option for smaller runs because:
- Close proximity to the US and Canada allows for truck freight, which allows for cost-effective shipping of smaller order volumes.
- Mexican manufacturing has some of the lowest production costs in the world. In fact, Mexico’s labor costs are among the lowest in the world.
Of course, there are many more reasons to choose a Mexican contract manufacturer, which you can read more about here.
2. Production Setup Costs
It costs money to set up each production process, and that cost has to be amortized across the production run. If the setup is inexpensive, the minimum production run can be lower. If the setup is more costly, the minimum run usually has to increase accordingly.
3. Inventory Requirements
In order to produce a part or component, a manufacturer needs to hold raw materials and/or sub-components in inventory. This inventory has a cost, and often times there are minimum purchase requirements for raw materials. If, for example, we’re required to buy a certain raw material by the ton, our minimum production run will reflect that reality.
4. Existing Production
This sort of relates back to #2 – production setup costs. If, for example, we’re contacted about a minimum production run for a part or component that’s very similar to a part or component we’re already manufacturing, our minimum run will be smaller.
So, What’s The Minimum?
We don’t have a set minimum production run. Depending on what it is that our clients need, we may be able to produce an extremely short run cost-effectively.
To find out what the minimum run is for your contract manufacturing needs, please contact us. We will be glad to give you a precise minimum run number without a lot of back and forth.