How Toll Processors Help Reduce Your Production Costs

Justin Klinger, Aug 13, 2020 6:15:00 AM

how toll processing reduces costs

There’s no doubt that today’s manufacturers face many challenges when processing materials. In addition to the demand for more and more products requiring specialized milling, drying, and blending, there’s the old reliable challenge: rising costs.

Rising costs of equipment. Rising costs of labor. Rising costs of energy. Large-scale production requires significant operating expenses. Yet, the need for expert toll processing doesn’t need to be looked at as another production expense. In fact, this article will work to convince you to see a toll processor as a source of cost reduction.

A Trusted Guide

Many companies know outsourcing specific portions of their production process can be the most cost-efficient way to produce their product. They enjoy the advantage of having access to specialized equipment, dedicated facilities, experienced operators, and not needing dedicated space.

These may be the obvious ways a toll processor helps reduce costs, but there are some that may contribute even more. The best toll processors (usually full-service toll processors) also offer value-added insights on materials, the production process/processes, and performing every step as economically as possible.

Think of a toll processor as a professional tour guide. A person that knows all the back roads, the fastest routes, and how to avoid the potholes on every street. You get where you need to go safely, smoothly, and directly, meaning the lowest possible cost.

You’ll be amazed what the top toll processors have experienced while solving challenge after challenge. They listen to your needs first. And then create the best solution for you.

Real-Life, Money-Saving Project Examples 

If these ways to save sound a little vague, here are some actual examples of toll processing savings in action.

  • Company X’s product required three production steps — milling, treating, classifying — resulting in some product needing to be disposed of. After applying processing expertise, the toll processors reduced the process to two steps — treating and milling — with no product requiring disposal. Not surprisingly, the savings were significant.
  • Company Y’s powder material goes through a classifying/screening process to remove oversized particles, which weren’t of importance to them. The over-sized material could then be processed further.   
  • When Company Z milled material on its own spiral jet mill, a broad PSD curve was created, which required another step of classifying/screening to remove the coarse tails. The toll processor recommended running the material through a fluid bed jet mill with internal classifier, which eliminated the tail, making this a one-step process.
  • A top-level toll processor took ownership of Company A’s freight to keep costs down.
  • One full-service toll processor added packaging stations within its facility to reduce the need for further “co-packers” in the supply chain and also creating savings for Company B.
  • For Company C, a toll processor increased processing throughput rate  by implementing engineering practices that lowered the originally quoted price.

Uncovering Hidden Cost Savings

Sometimes what doesn’t happen saves money (and effort and headaches). Toll processors take on vital production concerns — safety, environmental responsibility, and catastrophic incident prevention — which are real issues when working with chemicals and other industrial materials.

Toll processors assume the potential liabilities of many production steps, taking these critical responsibilities off the table for manufacturers. The alternative is a company’s in-house production being exposed to serious regulatory compliance and liability issues.

Toll processors also manage production schedules and handle any training needs. Lastly, when a product is a combination of multiple materials and repackaged as a new product, many toll processors can handle that service, which is an affordable alternative to installing costly packaging equipment.

Selecting a Toll Processor

Yes, you’re concerned with costs, yet your evaluation of a toll processor should go well beyond which is cheapest or nearest. Think of it this way: this could be your product’s quality gatekeeper, so imagine what your customers will think if any defects are found or experienced.

Toll processors need to be able to seamlessly handle numerous tasks for a company: nail product specs, coordinate shipments, avoid contamination, and trace your product from the time of arrival through departure. It’s fair for you to ask how your specific processing needs will be handled by the toll processor’s quality assurance and quality control programs.

Now you know more about how a toll processor helps reduce production costs. Have you also considered using a contract manufacturer? If so, you should read this guide: What Are The Differences Between Toll Manufacturing and Contract Manufacturing? Get your copy by clicking the link below!

Toll Manufacturing vs Contract Manufacturing

:Toll Processing

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