The Sunrider Value of Self-Manufacturing
In a February 2009 magazine, the Chief Operating Officer of an açai juice binary company stated, “We’ve chosen not to own our manufacturing operations, but we control every step of them[…] Our quality staff and manufacturing partners have very close interaction to ensure that our product is manufactured according to [our company’s] specifications.” This sounds good, but as a manufacturer, I can tell you his remarks are the talk of a company that does not know manufacturing. If you do not manufacture yourself, you don’t know what is really going on and cannot control the quality. For example, a famous toy company recently had huge problems with lead paint on their toys. The toy company had standards, protocols, quality checks, etc. that their third-party manufacturer was supposed to meet. But, unknown to the toy company, the third-party manufacturer decided to use cheaper, lead tainted paint. There have been other manufacturing scandals with plastic in baby formulas and dog food because third-party manufacturers were cutting corners. There will always be tension between the manufacturer and the buyer because each needs to make money. The manufacturer wants to sell high, and the buyer wants to buy cheap. Quality suffers to meet both demands. You also cannot protect your formulas in this situation. Some companies say they do research and development themselves, but then hire someone else to manufacture. Unfortunately, there is no guarantee that the manufacturer won’t take your formulations, add a twist, and sell it themselves. You can’t control what is going on in someone else’s kitchen. I believe that companies that are stingy in manufacturing are stingy for their future.
In Sunrider, we control everything from research and development to manufacturing for the security of our business leaders. The way we formulate, extract, and concentrate our products is so unique that other people cannot copy it.
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3/14/2009 05:18:00 PM
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