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Finding the right manufacturer for your product

CNET@Work: After Chris Adams and his team developed Levium, a natural supplement used to treat anxiety, they had to find the best way get it manufactured.

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Chris Adams first hatched the idea for Levium, a natural supplement used to treat stress and anxiety, when he was confronted with his then 5-year-old daughter's panic attacks. As a veteran IT professional and executive, he has also witnessed high levels  of stress and anxiety in younger tech workers.

Adams decided to do something about it. Assembling a team of researchers, clinicians, academics, healthcare professionals and chemists, he founded Glauser Life Sciences.

"The objective was to develop a safe and all-natural supplement for anxiety reduction that had antioxidant and anti-inflammatory qualities and that could activate your brain's natural anxiety regulators and suppress cortisol production, which triggers anxiety," Adams said.

Once the Levium research team developed a formula and a product, they faced an entirely different challenge: finding a manufacturer.

Several issues had to be addressed concerning a potential manufacturer.

Define what you want from the manufacturer

chris-adams

Chris Adams: "Look for a manufacturing business partner that is local so you can actively collaborate."

Glauser Life Sciences

After Adams and his team had prototyped, tested and documented Levium, they set out to interview manufacturers.

They wanted to find a local manufacturer, because it would be easier for them to visit it personally and to actively collaborate with the manufacturer through all phases of planning and production, packaging and quality procedures to get the product "right." The team could also be on hand to oversee quality assurance and to ensure that the product was manufactured to spec.

"I can't emphasize how important this initial hands-on collaboration with the manufacturer is," said Adams. "By working with a local manufacturer, especially on your first production run of the product, you can oversee everything. You are engaging directly with the manufacturer, tracking progress and also refining and documenting the manufacturing process itself so it can be repeatable in the future. Because the manufacturer was so proximate to us, we could visit the facility at any time and this gave us an enormous level of comfort."

Another thing on Adams' mind was minimum order quantity, or MOQ.

"We had performed clinical trials of Levium over a one-and-a-half year period, but now we were going to market, and we had to test the market at the same time that we were establishing Levium as a product," said Adams. "It was very important for us to find a manufacturer willing to work with us on an initially lower minimum order quantity for our first production run.

"Some manufacturers won't work with you at all unless you agree to produce a certain minimum order quantity," Adams added, "and there were some manufacturers that wanted higher MOQs than we initially wanted to commit to for our inaugural launch."

The trade-off: The per-unit price for Levium in its first production run would be higher for a lower MOQ.

"We understood the trade-off," said Adams. "Later, after the product was established in the US market and internationally, we could reopen the minimum order quantity discussion and negotiate a better per-unit manufacturing deal."

Adams and his team also wanted to secure a manufacturer with a credible reputation.

"This was very important to us because we were manufacturing a nutritional supplement, and we needed be assured that our manufacturer would play by the rules," said Adams, who was aware that there were manufacturers that didn't perform authenticity tests on the raw ingredients that came into their plants for manufacture of vitamins and supplements. "We didn't want to risk incubating a health risk, and we also wanted to make sure that the ingredients used wouldn't break down over time and that the expiration date on our packaging could be depended upon by consumers," said Adams.

Finally, Adams and his team wanted a manufacturer that could be efficient and on time. "This was absolutely critical for us," he said. "If you start promoting product to the market and there is a manufacturing delay, it can be extremely detrimental for customers and for your company."

Protect your intellectual property

Adams conceded that when you're providing a nutritional supplement that doesn't use a unique molecule, it's difficult to prevent others from copying your product.

"The best way we found to protect the product was to develop proprietary formulations, so that those who wish to copy the product might know the ingredients, but not how the ingredients are formulated to produce the product," said Adams. "In the future, we are looking at processes like nano encapsulation that might be sufficient to earn us a patent."

Meanwhile, Adams uses nondisclosure agreements (NDAs) in negotiations with manufacturers to ensure that they don't try to appropriate the product.

"In reality, intellectual property and NDA issues were not really a major concern in the manufacturing process," said Adams. "The manufacturers we met with were in the business of producing products that their customers would then bring to market. Since their customers would be retailing the products that these factories manufactured, they didn't want the reputation risk that would come with trying to appropriate someone's product or formula and trying to use it for themselves."

This worry will grow if and when Adams and his team decide to manufacture the product offshore in proximity to international markets. "At that point, you almost have to concede that there will be product knockoffs," said Adams. "One way to contain that situation is to negotiate licensing agreements for your product with international distributors in advance that will enlist them in furthering the success of your product."

Ensure that the product meets quality standards

"There are always risks when you hand your product off to a manufacturer for production," said Adams, "To control these risks, we had one of our in-house chemists work closely with the manufacturer onsite to ensure that product integrity was maintained throughout every phase of manufacturing."

One of the things that Adams and his team initially looked for in a plant tour was cleanliness. "Our product needs to be manufactured at a pharmaceutical level of cleanliness," said Adams. "If there is the least sign of an unclean environment, it is a manufacturer we would not use."

A second element that the Levium team looked for was higher end machines that could produce more efficient and thorough blends of ingredients for the product. "High speed machines can perform the blending process better, and they are also more efficient," said Adams. "This is where a larger manufacturer can have the edge."

Collaborate with the manufacturer

Being able to work with a local manufacturer made it easy for Adams and his team to continuously collaborate in manufacturing, and maintain visibility of their product.

"Being able to drive to the manufacturer and see the product being manufactured takes the guesswork out of developing a pharmaceutical grade product for the market," said Adams. "Whenever an issue came up, we were able to sit down together and solve it."

Develop a supply chain 

For the initial launch, Adams and his team are using the Levium website and also Amazon. But they are already receiving expressions of interest and are engaged in dialogues with large US brick-and-mortar retailers as well as distributors in Europe, the Middle East and Asia.

"All of these potential new market expansions are exciting news, but they also present a new set of challenges," said Adams.

Chief among them will be a more formalized approach to the supply chain that includes not only longer term manufacturing and production decisions, but also decisions about licensing, logistics, distribution and retailing in the US and abroad.

"These are the next set of challenges, and we are working on them now," Adams said.

One of the options Adams and the Levium team have is manufacturing the product at international manufacturing facilities that will be closer to some of the markets they plan to enter in Europe and Asia. "We are thinking about longer term manufacturing and distribution now," said Adams, "Although we also recognize that there appears to be an intrinsic perception value, both in the US and abroad, when consumers see that a product is manufactured in the US."

What words of wisdom does Adams offer other entrepreneurs who have a product that they've developed and that they now want to manufacture and bring to market?

"Look for a manufacturing business partner that initially is local so you can actively collaborate, and also find a party you can trust," said Adams. "There are many ideas, emotions and energies that go into producing a new product that you believe will benefit people -- but the effort is not for the faint of heart."