What is Contract Manufacturing?
Contract manufacturing is a process that established a working agreement between two companies. As part of the agreement, one company will custom produce parts or other materials on behalf of their client. In most cases, the manufacturer will also handle the ordering and shipment processes for the client. As a result, the client does not have to maintain manufacturing facilities, purchase raw materials, or hire labor in order to produce the finished goods. The basic working model used by contract manufacturers translates well into many different industries. Since the process is essentially outsourcing production to a partner who will privately brand the end product, there are a number of different business ventures that can make use of a contract manufacturing arrangement. There are a number of examples of pharmaceutical contract manufacturing currently functioning today, as well as similar arrangements in food manufacturing, the creation of computer components and other forms of elect
Contact manufacturing is manufacturing of a product by a job shop on behalf of an external customer. Normally, the customer supplies the drawings and specifications as well as the quality control criteria. For most effective, error-free contract manufacturing, it is imperative that the customer involve the vendor in the quality planning process and provide well-documented instructions, drawings and specifications, so the vendor understands expectations of the customer. Both the customer and the vendor should approach contract manufacturing in the spirit of partnership with the objective of producing Zero Defects quality. This is the age of core competencies and global alliances. Those companies that concentrate on their core competencies and outsource non-core work to others grow quickly and make more money. For example, a company who invents radar equipment is good in the design and software parts, but may not be good in the manufacture of PC Boards or plastic case. These are the prod
Contact manufacturing is manufacturing of a product by a job shop on behalf of an external customer. Normally, the customer supplies the drawings and specifications as well as the quality control criteria. For most effective, error-free contract manufacturing, it is imperative that the customer involve the vendor in the quality planning process and provide well-documented instructions, drawings and specifications, so the vendor understands expectations of the customer. Both the customer and the vendor should approach contract manufacturing in the spirit of partnership with the objective of producing Zero Defects quality.
Contract manufacturing is defined as a company that is hired by another company to make parts or components for another company. Contract manufacturing is widely utilized in many different types of industries. Some of the different industries that use contract manufacturing are aerospace, defense, semiconductor, and even the medical fields. There are many companies that you can find that also specialize in contract manufacturing. What this means is that all the contract manufacturer does is to provide a part or a component for another manufacturing company for them to make a finished product. What is contract manufacturing and how it is used will be explained in the following paragraphs.
