Toll processing (third-party processing under contract) will offer the many advantages of subcontracting your production, like having the operational expertise without direct hirings and having the essential infrastructure without making the requisite capital commitment. But before awarding a toll processing contract to a toller, be sure that your contract processor can commit reliable capacity, operational expertise, and the high-level Quality Assurance necessary to guard you against potential product liabilities, and also protecting the intellectual property associated with your contracted materials (product formulas, product additives, blend formulations, particle size distributions). Protecting your IP is a quintessential concern.
We look at some ways in which businesses can keep their peace of mind about their intellectual property and derive all the benefits of toll processing:
Due diligence – Know your toll processing services provider. Look into past contracts. Take the trouble to inspect the toller’s process facilities physically. Ask for samples and lab test results before executing a tolling contract.
Handling of raw material – Put safeguards in place to limit non-essential access to your products and processes.
Third-party production – The use of independent contractors by your tolling partner must be defined. Be sure that violations carry meaningful enforceable penalties.
Security of Product – Physical control of the product from inbound raw materials to final products, storage, and delivery, should have security measures in place that are verifiable. Your IP can walk out the door if your contractor is lax about proper security.
Classifier Milling Systems remains a party to numerous product confidentiality agreements with industry leaders for their product IP.
Want to learn more? Give us a call or contact us!