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Contract Manufacturing Contract manufacturing refers to a contract with a foreign manufacturer, the manufacturer produces the product, and the company is in charge of selling the cooperative form. Contract manufacturing enterprises entering the international market as soon as possible, risk is minimal. It will promote partnership establishment with foreign manufacturers or full ownership in the future.
Contract manufacturing has several kinds.
1, by two parties to the production of different components, and by assembly either to complete product sales in one or both countries or both countries.
2, one of the other components of responsibility for production and assembly of major components and drawings and technical guidance, secondary components, and in the country or international market.
3, one of technical or production facilities, special or specific parts or product components, two-sided collaboration by either or both markets.
Part of the transfer of responsibility to the other side of the contract, to focus on marketing, the use of contract manufacturing, business all or production operation and effective way to expand the international market. The advantage of this model is the implementation of outsourced manufacturing business output technology or trademarks and other intangible assets, but also part of the capital, in addition to output control and labor and other production factors.
As contracts can be affected by trade barriers involving the manufacture and export of parts and manufacturing equipment, it is possible to train partners to second, potential competitors first. Third, it is possible. At the same time, this model has the following drawbacks As planned, the fourth is possible as the plan can not lead other leads to the delivery deadline of the enterprise's marketing activities, losing control of the production process It was.
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