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Contract Manufacturing Types

Typically, contract manufacturing services involve outsourcing some or all of a company’s actual manufacturing processes to a subcontractor. Usually, manufacturing services include the manufacture of a product to its required specs, product engineering and designing and producing the product.

The different types of contract manufacturing services include pharmaceutical manufacturing services, electronic manufacturing services, medical contract manufacturing and contract manufacturing agencies. Firms that are interested in outsourcing some of their activities can either contact the subcontractor directly or via 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 in the company, the manufacturing component of the business may take a secondary role to do marketing or research and development. With emphasis on the core areas of a business, a company may recognize that hiring a contract manufacturer can have the product built for a lower cost than it would be to manufacture 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. Despite the type of contract manufacturing that the original equipment manufacturer choose to use, the product design and ownership still resides with the OEM but 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 services included in the pharmaceutical contract manufacturing service include drug packaging, warehousing, distribution, and quality control audits.

Medical contract manufacturing features both the electronic and pharmaceutical contract manufacturing. The products that are being manufactured 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.

Companies new to subcontracting or outsourcing can get help from the contract manufacturing agencies in finding the right subcontractor they can work with. The contract manufacturing agency will meet with the company to understand the level of outsourcing it requires and the type of services it requires. The agency will then on behalf of the company, conduct a research, interview and narrow the list of possible subcontractors who can meet the company’s demands comfortably. The company can then choose one subcontractor from the provided list.

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