Types of Contract Manufacturing Services
Contract manufacturing refers to the outsourcing of 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 available include electronic manufacturing services, pharmaceutical 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.
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 recognize that hiring a contract manufacturer can have the product built for a lower cost than it would be to manufacture it in-house.
The electronic contract manufacturing services are the most widespread and include printed circuit board design and end life management. An Original equipment manufacturer can choose to outsource only specific product manufacturing or use additional services of various subcontractors to help in the distribution. 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 forms of medical contract manufacturing involves providing medicine dispensers 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.
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 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 the company can then go ahead and choose a subcontractor from the provided list of candidates.