What is Tolling Manufacturing?
What is Tolling Manufacturing?
In the chemical industry, tolling manufacturing or toll manufacturing is a common practice for outsourcing manufacturing. Chemical production requires specialized equipment and certifications that are difficult to obtain and maintain, so having a partner to process and produce chemicals and materials for your products is incredibly valuable.
Toll Manufacturing: a quick overview
This is often where toll manufacturing comes in. This type of partnership is similar to contract manufacturing–both involve outsourcing the production or part of the production to a third party. However, in tolling, the source company provides the bulk of the raw materials and any other semi-finished products necessary for the tolling manufacturer to process. This gives the source company much more control over the supply chain and the quality of the materials, and the costs of those materials as well.
To protect the intellectual rights and property of the source company, the two companies make an NDA, a non-disclosure agreement. This document specifies which company owns the design and supplies the materials, and what all the tolling company will manufacture from that design.
The benefits of toll manufacturing
Toll manufacturing has many advantages, especially in the chemical manufacturing industry. The tolling company will have all of the necessary certifications and equipment needed to process the raw materials, often in large volumes as well, so that the source company doesn’t need to go through the strict certification processes and pay for the expensive equipment necessary for chemical production.
This type of manufacturing has other benefits as well. Since the source company has control over where they source the raw materials from, they have more control over the quality and costs of them. Tolling also reduces the labor costs of the source company, especially in chemical manufacturing. This industry often requires skilled workers, and so sourcing chemical production to a toll manufacturer is much more cost efficient for the source company.
Looking for a supplier of tolling manufacturing services?
Gellner Industrial, LLC offers toll manufacturing processes to all of our customers. We have everything necessary to process and manufacture your materials into acrylic resins for your products. Check out our website to learn more.
