Turnkey Manufacturing Companies: How Do They Work?

Turnkey manufacturing companies… Contract manufacturing companies… Toll manufacturing companies.

You’ve probably heard of all these options—and they have more in common than their status as third party manufacturing processes. However, you need to be aware of the key differences between each one before making a final decision.

Here’s how you start: learning from an experienced third party. That’s what Conversion Technologies International is here for. We’re ready to define exactly what turnkey manufacturing means, and what you’ll get from it—and what, in contrast, you can get from contract manufacturing and toll manufacturing.

What is a turnkey manufacturing company?

The answer lies in the name. Think of it this way: Using a turnkey manufacturing company is as easy as turning a key. When working with a turnkey manufacturer, you’re essentially outsourcing. However, there is more than one form of outsourcing, and turnkey manufacturing among the most high-level options. Sometimes referred to as end-to-end manufacturing, turnkey manufacturing is a system that involves outsourcing all processes, as opposed to some.

When working with a turnkey manufacturer, you don’t have to worry about any additional setup. Once the manufacturer delivers the product, it’s final—no more assembly necessary, no worries, no further investment to make it functional.

While the turnkey approach suits many scenarios, we typically find a few different commonalities between clients. Usually, the clients of turnkey manufacturing companies come prepared for product designs or prototypes. You may even have a final product ready—you just need the manufacturer to duplicate it, and at a larger scale. The turnkey manufacturer really takes what you already have and turns it up a notch, commercializing a process that was previously on a smaller scale.

Ultimately, turnkey manufacturing companies fall under the “third party manufacturing” umbrella. The other options you’ll typically run into include contract manufacturing and toll manufacturing.

What’s the difference between turnkey manufacturing companies and contract manufacturing companies?

In a way, turnkey manufacturing is a form of contract manufacturing. This is because contract manufacturing does involve the same basic process—in theory. You present the manufacturer with your production needs, and the manufacturer provides the final result you need. Turnkey manufacturing simply takes it to a different place.

You’ll find turnkey manufacturing less hands-on than contract manufacturer. There’s little need for further contact after you hand off the product design. You can take a full step back once you’ve selected your trusted manufacturer. There’s nothing more you need to concern yourself with once production begins. You don’t have to work with with multiple contractors or manufacturers. Every process happens in one place, with one company.

While you may maintain multiple points of contact with contract manufacturing, this isn’t the case when you work with turnkey manufacturing companies. While this may work for some business owners, others like to remain more involved in their supply chain management. Additionally, keeping everything in “one place” may mean that you have less control over the final product.

What is the difference between turnkey manufacturing companies and toll manufacturing companies?

If you’re looking for an alternative to a contract or turnkey solution, you may want to consider toll manufacturing. Toll manufacturing functions as another form of third party manufacturing. Just as with turnkey manufacturing, you turn over your plans to the third party, essentially placing an order for the final product. However, there is one major difference that some business owners prefer. With toll manufacturing, you provide the raw materials. With both contract manufacturing and turnkey manufacturing, the third party sources the raw materials.

Why might you want to keep the raw materials within your domain? The answer differs from business owner to business owner. However, you may like to maintain control over those materials because you have a good source. Perhaps you trust the quality; maybe the price is right. For whatever reason, you want to maintain full control of the materials. Toll manufacturing allows business owners to do that.

In some cases, business owners are simply less than comfortable with fully handing over operations to a third party. While a good contract manufacturer or toll manufacturer will always keep you in the loop, toll manufacturing simply has involvement more ingrained in the process. 

Do third parties offer contract manufacturing and toll manufacturing?

Yes! Some third party manufacturers offer both options, allowing you a bit more flexibility. You can consult with the third party and determine which process is right for you, or simply make a selection. At CTI, we want to make sure you’re fully comfortable with your choice, and are ready to answer any questions. We offer both contract and toll manufacturing because we’re experienced and comfortable with both approaches. Why limit yourself to one when you could explore both? Although it’s important to make that final decision, you need to be fully certain that you’re making the right choice.

Now that you know the basic differences between turnkey manufacturing and its alternatives, it’s time to learn more. The best way to do that? Getting in touch with CTI directly! Contact us here or call 419-924-5566 for more info.

When working with an expert third party, you don’t have to worry about that. We’ll help you every step of the way.