Contract manufacturing is the products produced by one manufacturer in accordance with the demands of another company or organization. These products are usually produced with the brand, logo or design requested by the customer.
The advantages of contract manufacturing are as follows:
1- Low cost: The manufacturer uses most of the raw materials and equipment needed for production, so it reduces costs.
2- Fast production: The contract manufacturing company can produce quickly according to the customer's needs.
3- Flexibility: Contract manufacturing offers the opportunity to adapt quickly according to customer's demands.
4- High capacity utilization: The contract manufacturing company provides higher utilization of production capacity.
5- Risk reduction: The contract manufacturing company undertakes the risks that may occur during the production process itself instead of loading them to the customer.