We just wrapped up an extensive search to find the right Contract Manufacturer (CM) for one of our clean-tech customers. Redflow, based in Brisbane, Australia, has developed a world-class zinc-bromine flow battery suitable for many energy storage applications. While well beyond the startup phase, they are still facing a substantial production ramp, and needed a CM with both the flexibility to handle NPI but also the muscle to handle the coming volumes. The challenge was compounded by the use of very advanced plastics in the flow battery, and perpetual need for new clean-tech products to be able to compete with low cost incumbant technologies (in this case lead-acid batteries). Details can be found in Redflow’s press release, in which we get a nice mention.
Finding the right contract manufacturer for a given product is complicated. Bigger is not always better, for starters, and while we ended up with a Tier 1 CM–Flextronics–for Redflow, that doesn’t mean that’s the best solution for all companies. Too small is equally bad, so we typically look for a “Goldilocks” solution–not too big, not too small. My Swedish friend have a word for this–lagom. Just right.
Location is also a key issue: in this case we were looking for a low cost North American supplier to address key US customers, and ended up focused on Mexico for logistics reasons. But in other cases, China, Malaysia, Europe or even the US may be the right answer. The geographical nature of the supply chain--it’s called a supply chain for a reason–is also critical.
Of course technical capabilities and landed price play a huge roll, and honestly the interest level of the CM–hungry is good, although desparately so is not–also can make or break deals.
At Zebulon Solutions, our customer base is so diverse that we often have to start fresh with each customer. We just placed one customer with a local CM, and have another that may well end up in Mexico too, but for different reasons. It’s also important to note that we’re a productization solutions company, not just supply chain, so we also support our customers on technical issues, cost downs, test development and a myriad of other design and industrialization tasks.
As for our friends in Australia, our next mission there is to help get their product launched at their partner CM, for which we will be taking a program management role. The kickoff meeting for that effort was just concluded. Down under, where it’s summer just now… sigh.