Relationship Advice for Manufacturers:

4 types of CM relationships

Transactional

While common in the manufacturing industry, this hardly qualifies as a relationship. Translated into the lives of individual consumers, it is comparable to running out of a household item you need right away, such as milk. There is no shortage of (and little price difference in) places that sell milk, so generally you’d go to whichever is most convenient at that time. Then the next time you run out of milk or batteries or toothpaste or whatever, you’d also choose the store, gas station, drugstore, etc. that most easily fulfils your immediate requirement. As we said, hardly a relationship.

Transactional outsourcing works in the same way. Individual projects are assigned based on simple and objective criteria such as price. Interactions only last for as long as the project itself. There is no exclusivity. For your next or concurrent project, you are just as likely to work with a lower bidding competitor.

Repeat

If you live in the suburbs, you likely have several grocery stores within easy driving distance. How many? Six? Eight? More? And yet, for your weekly grocery shopping you likely go to the same one or two. Here reasons are more nuanced. They have a brand you like; you know the store layout; parking is easier, or it’s simply the one you’ve always gone to. Whatever the reasons, that’s where you shop.

In repeat relationships, manufacturers have a short list of preferred CMs and work with them often, generally through a familiar point person. The reasons CMs are placed on the list of a particular manufacturer varies with priorities (some of which we’ll examine below). For any project, those on the list are always the first – and often only – port of call.

Long-term

At a consumer level, this is comparable to large projects and greater associated risk. For example, making renovations on your home. In such cases you would likely conduct a fair bit of research before deciding on a contractor and put a great deal of weight on recommendations by friends and family. You call the contractor by name, they do the same. You share personal details such as your phone number, address, and emergency contacts. You may even trust them with your house keys. Unless the trust is broken, they will be your one choice for all future projects.

In manufacturing, long-term relationships involve long-term contracts. CMs are carefully vetted and trusted with more information. Interactions move past the mere taking of instructions to discussions in which the CM provides input and ideas about current projects. Generally, the manufacturer will deal exclusively with that CM for the duration of the contract.

Strategic

This relationship is akin to a committed partnership. For individuals, it’s similar to starting a new business with someone, or even deciding to get married. In both cases, your partner is someone you trust and expect to be a part of your plans and dreams, whether it’s a decision for what to do over the weekend or goals for years into the future.

Likewise, in a strategic relationship, you share your wider vision with your CM and they, in turn, consistent and proactive in sharing ways to advance your business goals. You rely on your CM’s expertise, unique knowledge and discretion. This relationship is marked by collaboration. Communication between team members is frequent and productive, therefore projects go smoothly with fewer issues across their lifecycle. Contracts are long-term and likely to be renewed.