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 building the product to its needed specifications, engineering, designing and manufacturing the product.

The different types of contract manufacturing services include pharmaceutical manufacturing services, electronic manufacturing services, medical contract manufacturing and contract manufacturing agencies. Any company that wishes to outsource some of their activities can either contact the subcontractor directly or go through an agency.

Electronic Manufacturing Services: These are commonly outsourced by the original equipment manufacturer (OEM). An OEM is a firm that originally designed and manufactures 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 emphasis on the core areas of a business, a company may realize that a contract manufacturer can create the product for less cost than when done 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. An OEM can opt to outsource only the manufacture of a particular product or use additional services of several subcontractors to aid in the supply of the product. 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.

The most common practice in this type of manufacturing contract is where the actual drug manufacturing is the task of the subcontractor while the research and development is left in the hands of the original pharmaceutical company. Other types of contract manufacturing services under this industry include warehousing, distribution, quality control audits and packaging.

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 for the medical device, it may require the subcontractor to link up with other pharmaceutical contract manufacturers so as to provide complete supply 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 agency plans a meeting with the company to assess the level of outsourcing it requires and the kind of services it needs. 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 the company can then go ahead and choose a subcontractor from the provided list of candidates.

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