Contract Manufacturing Types
Contract manufacturing is defined as outsourcing of some or all of a company’s manufacturing processes to a subcontractor. Manufacturing services include manufacturing the product to the required specifications, engineering the product and designing and building the product.
The different types of contract manufacturing services include pharmaceutical manufacturing services, electronic manufacturing services, medical contract manufacturing and contract manufacturing agencies. Companies that want to outsource some of their activities can contact the subcontractor directly or go through an agency.
The original equipment manufacturer or the OEM is the one that commonly uses the electronic manufacturing services. Basically, an OEM is the original designer and manufacturer of a particular product. With the growth of the company, the maknufacturing component of the business may take a secondary role to marketing, or research and development. With more emphasis on the important aspects of a business, a company may recognize the fact that hiring a subcontractor to handle the project can cost less to have the product built than doing it in-house.
Contract manufacturing services in the electronics industry is the most popular and range from printed circuit board design to the end life management. The OEM can decide to outsource only the specific product manufacturing or employ extra services of numerous subcontractors to help in the distribution of the product to the end consumer. No matter the type of contract manufacturing services that the OEM chooses to use, the design and ownership of the product still remains under the OEM and not the subcontractor.
In this manufacturing contract type, the subcontractor is charged with manufacturing the drug while the original pharmaceutical company specializes in research and development. Other contract manufacturing services within the pharmaceutical industry include warehousing, packaging, distribution and quality control audits.
Medical contract manufacturing is a combination of the pharmaceutical and electronics contract manufacturing services. The items that are being produced are medical devices that may include electronics. Some medical contract manufacturing services involve the provision of dispensers for medicine such as electronic insulin pump. When a company subcontracts out medical device, they may also require the subcontractor to coordinate with other pharmaceutical contract manufacturers to for complete distribution of both the device and the pharmaceuticals to the end consumer.
For companies that are new to outsourcing, they can use the help of the contract manufacturing agencies to get the right subcontractor to work with. The agency meets with the company to assess the level of outsourcing it requires and the types of services required. The agency will then research, interview and narrow down the possible list of subcontractors who can meet the company’s demands. The the company can then go ahead and choose a subcontractor from the provided list of candidates.
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