Outsourcing of services is a growing trend across all sectors in the UK. Contracting external services is big business; whether it is managed services such as IT, research and development or consultation services, or more traditional outsourcing such as payroll. 

In manufacturing, chemical products, food and pharmaceuticals, outsourcing is an essential part of the business ecosystem. 

The expertise and specialised machinery required to mill and blend raw materials are an investment in time and money. That is where contract blending and toll processing for mixing new compounds becomes part of the manufacturing equation. 

What is contract blending?

Contract processing or toll processing is the outsourcing of part of the product production to a third-party company in the manufacturing industries. 

In particular, contract blending is the mixing of two or more ingredients to create a final product or materials ready for further treatment. These can be dry powders, liquids or other raw materials. 

The third party contracted to do the processing can also pack, label and ship the new product to suit the manufacturer’s needs. Hence, it is sometimes referred to as co-packing. 

What are the benefits of using contract blending?

The benefits of using a third party for raw material processing are many:

  • It gives access to specialist knowledge and experience in the chemical processing fields, which is also important for compliance with safety regulations, high-temperature treatments and processing hazardous substances
  • It saves money by reducing overheads, staffing costs, storage and capital investment in equipment
  • Using an organisation already in existence can reduce time to market for new products and services
  • Quality assurance is another benefit, as contract blending requires high standards and attention to detail in processing – all products are control checked before packing
  • Flexibility in the amount of product that can be processed allows for scalability

How does contract blending help a business grow?

The main way contract blending can support growth is via scalability.  

Contracting another organisation to produce a product is incredibly cost-efficient compared to expanding an existing site or building a processing plant from scratch.

Without the need to hire more staff or purchase larger premises and equipment to handle bigger loads, it can free up budget and time resources for other activities.

It can help a business focus on increasing its market share. By devoting more time to sales, marketing, customer service and product development, a business can grow and innovate at a much faster pace. 

Weaving in flexible systems into an organisation’s business model is a way to future-proof for demand fluctuations. The cost-saving benefits over time can increase profits and deliver better customer service. 

The flexibility of using contract processing allows a business to increase and decrease production as demand dictates. This results in less waste and less unused inventory. 

If a new market opens up, a business needs to react quickly to keep up with demand, and using a third-party firm that can increase production quickly will support the business’s bottom line. 

The ability to pivot to new products, new packaging, or adapt to new markets on short notice can make a difference between overtaking and lagging behind competitors. 

What size batches can be produced through contract blending?

A toll processing company can assist with a broad range of product volumes, whether blended or otherwise.  

It can range from initial pilot quantities blended in labs, used to test the efficacy of the product, to developing new compounds for the market. 

Small batches can be produced in quantities as little as 50kg or less in a lab, so a company can test a new formulation or recipe. This can prevent wasted time and resources before committing to large-scale production.

If a product passes muster, then the contractor can scale up production to bulk volumes. These can be as large as 20 tonnes as demand from the client increases. 

Lightweight products, or rather low bulk density products, may need more volume for less weight, requiring larger premises and equipment. A contract blender would be able to handle it more efficiently than an in-house team. 

A business may need to adjust packing sizes to adapt to market needs or changes to infrastructure. These changes can also be handled by a contract processing company. 

They will be able to pack products in containers from tankers, to barrels and bulk packaging, down to pots smaller than a tin of beans. Palletisation can also be handled by the contract blender for ease of transport. 

Using a contract processing firm that can adapt quickly to the needs of the client can allow a company to grow its brand and market share much faster. Contract blending is key to scalability and, therefore, profitability in manufacturing.