In today’s competitive manufacturing landscape, businesses constantly look for ways to improve their operations. Implementing automation, for instance, can lead to a 48% improvement in productivity and a 42% decrease in operating costs (source: Cyngn). One solution gaining traction, particularly in the manufacturing and processing sectors, is toll processing. This guide by Hosokawa will explore what exactly toll processing is and whether it could be the right solution for your business.
What is Toll Processing?
Toll processing, also known as toll manufacturing or contract manufacturing, is a service in which a company (the toller, i.e. a 3rd party miller, or size reduction company), processes raw materials or semi-finished products for another company. Toll processing allows businesses to outsource specific manufacturing processes without investing in expensive equipment or additional facilities themselves. This can offer both, long term and short term solutions.
What Toll Processing Services Does Hosokawa Provide Across Industries?
Hosokawa’s contract processing services are extensively utilised in numerous industries including pharmaceutical , chemical, mineral and food, offering specialist particle size reduction, classifying, granulation, and blending solutions.
The chemical industry frequently depends on Hosokawa’s toll processing services for size reduction and, or mixing of raw materials, whereas the pharmaceutical sector benefits from accurate particle size reduction and classification of API’s and other pharmaceutical materials.
Hosokawa’s toll processing expertise in the food manufacturing sector allows companies to size reduce, classify and/or blend ingredients consistently. Hosokawa Micron Ltd. are food certified to FSSC 22000 standard and hold both Kosher and Halal certifications.
This adaptability makes Hosokawa’s toll processing a vital solution across multiple sectors.
How to Choose the Right Toll Processing Partner
Choosing the right toll processing partner is essential for attaining the best possible outcomes:
- Seek out firms with certifications and regulatory compliance relevant to your industry standards.
- Additionally, consider their quality assurance procedures, encompassing batch documentation and traceability. Confidentiality agreements are also vital, especially for businesses with proprietary formulas.
- Finally, assess their turnaround times and capacity to ensure they can meet your production demands. Turnaround times refer to the time it takes for the toll processor to complete a batch. At the same time, capacity indicates the maximum amount of material the toll processor can handle at a given time.
This selection process is key to the success of your toll-processing venture.
What Are The Advantages of Toll Processing Services?
1) Cost Effective
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- One of the primary benefits of contract processing is its cost-effectiveness. Instead of investing in expensive equipment and facilities, businesses can leverage the existing infrastructure of toll processors, making them feel financially savvy. This is especially helpful for small and medium-sized enterprises (SMEs), startups and companies exploring new product lines.
2) Businesses have access to specialist equipment and knowledge
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- Toll processors often have specialist equipment and modern technology . Toll processors can help your business gain specialised knowledge, with the benefit of using cutting-edge technology and the most optimised processes.
3) Flexibility and Adaptability
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- Toll processing offers unparalleled flexibility, liberating businesses from long-term commitments. This empowerment allows enterprises to scale production up or down based on demand, test new products without long-term commitments, and respond quickly to market changes, giving them a sense of control over their operations.
4) Focus on Core Competencies
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- By outsourcing specific processes, businesses can focus on their other equally important core competencies, such as product development, marketing, sales, and customer service. This shift in focus can improve a business’s overall performance and growth.
Is Toll Processing Right for Your Business?
Toll processing also has potential risks and downsides to consider. These may include quality control issues, potential production delays, and the risk of intellectual property theft. Quality control issues can arise if the toll processor does not meet your standards, leading to product defects or rejections.
Production delays can occur due to equipment breakdowns or unforeseen circumstances, affecting your supply chain. The risk of intellectual property theft is present if your product involves proprietary processes or formulas, and the toll processor does not have adequate security measures. Therefore, it’s essential to consider these factors when assessing whether toll processing is the right choice for your business.
Aside from the above mentioned downsides, your business should consider the below factors:
- Toll processing can be inexpensive for manufacturers with moderate to high production output.
- The nature of your product when deciding on toll processing. Products or processes that require specialised equipment, have high production volumes, or involve complex contact manufacturing steps, may be more suitable for contract processing.
- Ensure that the toll processor can meet your quality standards and has appropriate certifications.
- If your product involves proprietary processes or formulas, ensure the toll processor can adequately protect your intellectual property. This may include signing non-disclosure agreements or ensuring the toll processor has robust security measures.
- Consider if toll processing services suit your business and growth plans.
Consider if toll processing services suit your business and growth plans.
Considering Toll Processing Services for Your Business?
Toll processing services can transform contract manufacturing businesses looking to improve their operations. Therefore, carefully considering your business needs is essential because partnering with the right toll processor drives growth and success.
Whether you’re a startup looking to minimise initial investment, an established company exploring new product lines, or an SME aiming to increase production capacity, toll processing might be the solution you’ve been searching for.
How Hosokawa Can Help with Toll Processing Services
At Hosokawa, we offer tailored toll processing services across industries including food, chemicals, pharmaceuticals, and minerals. Our capabilities include size reduction, granulation, mixing, blending, and classification. We can handle small trial batches up to multi-tonne production runs while ensuring consistent product quality.
To meet high industry standards, all services have complete batch documentation, traceability, and validation certificates such as ISO 9001 (management), ISO 45001 (H&S), ISO 14001 (environment), and FSSC 22000 (Food), where required. We offer short and long-term contracts, providing cost-effective solutions without compromising quality.
Hosokawa puts its customers at the forefront of its values in all aspects of their capabilities including and not limited to toll processing. We ensure that our core values of Trust, Collaboration, Customer First and Passion are always met.
