Contract Manufacturing- Redefining the Manufacturing Landscape

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Contract Manufacturing- Redefining the
Manufacturing Landscape Manufacturing is an
integral part of a product-centric business.
However, not every entrepreneur has the
wherewithal to proficiently run a production
unit. While self- owned manufacturing facilities
have their advantages, they also come with a host
of challenges that can derail you from your
overall business objective. Contract
manufacturing is the answer to your production
needs. A contract manufacturer is the one who
undertakes to produce parts of your product that
can be assembled at the assembling facility or
delivers market-ready finished products to the
warehouse or directly to the selling
outlet. Types of contract manufacturing Private-
label outsourcing In this arrangement, the
buying company outsources the entire
manufacturing responsibility to a third-party
contract manufacturer. The contractor then
produces the entire product based on the
design and technical specifications given by
the client. Component-specific manufacturing
Some companies may like to produce
parts of the product themselves and outsource
some components. Alternatively, they may engage
different manufacturers for different
components based on their expertise. The
final product is then assembled at the parent
companys assembling unit. Subcontracting Even
general contractors who undertake large
projects need to outsource certain parts
to another contractor for the
production of smaller components.
Subcontracting also happens in the case
of labour supply for manpower-intensive
projects. End-to-end contracting This is
similar to private-label contracting.
Nevertheless, in this model, the contracting firm
acts as a consultant for designing and related
best practises for the final outcome. Its ideal
for companies with low production know- how but
looking for a fast turnaround time.
Contract manufacturing opportunities
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gtWithin the mechanical and machinery products
industry Individual component manufacturing is
common in the HVAC industry. The automotive
sector also engages in contract manufacturing for
specific parts. gtPharmaceutical industry Not
just the production of certain medicines but even
compliance management is often outsourced to a
competent third party in the pharmaceutical
industry. gtMarketing industry Marketing/
advertising agencies often outsource certain
aspects of their business like videography and
editing, etc to another company specialising in
that particular field. Present market
scenario The global Contract Manufacturing
Organization (CMO) market was valued at 92
billion in 2018. At a CAGR of 9.4, its expected
to cross the 185 billion mark by 2026. The
Indian market is expected to grow at a CAGR of
13.3 in the period 2021-2026. As India powers
its way to becoming a manufacturing destination
and consequently boosting contract manufacturing,
Industry Experts with a wide network of contract
manufacturers is able to provide all relevant
assistance for contract manufacturing
requirements across a variety of select industry
verticals.