7 Types of Contract Manufacturing

Contract manufacturing is a manufacturing process in which the manufacturing of goods or products is outsourced to other companies. This includes contract manufacturing, co-manufacturing and collaborative manufacturing. The arrangement can be based on single orders and one-time agreements, or it can be long-term with multiple contracts with the same manufacturer.

There are many reasons why businesses outsource manufacturing, but the most common reasons are to save on costs, increase manufacturing capacity or reduce manufacturing lead times. A manufacturing company Hoboken NJ can help you with any of your manufacturing needs. There are seven different types of contract manufacturing:

1. Original Equipment Manufacturing (OEM)

An OEM contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be used in their own products.

2. Private Label Manufacturing (PLM)

A PLM contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be relabelled and sold under the contracting company’s brand name.

3. Custom Manufacturing

A custom manufacturing agreement is when a company outsources the manufacturing of products or parts that are designed according to the specifications of the contracting company.

4. Assembly and Packaging

An assembly and packaging contract manufacturing agreement is when a company outsources the manufacturing of products or parts that need to be assembled and/or packaged before they are shipped to the customer.

5. Component Manufacturing

A component manufacturing contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be used as components in other products.

6. Subassembly Manufacturing

A subassembly manufacturing contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be used as subassemblies in other products.

7. Turnkey Manufacturing

A turnkey manufacturing contract manufacturing agreement is when a company outsources the manufacturing of products or parts and the manufacturer also provides assembly, packaging, and shipping services.

Contract manufacturing is a manufacturing process in which the manufacturing of goods or products is outsourced to other companies. This includes contract manufacturing, co-manufacturing and collaborative manufacturing. The arrangement can be based on single orders and one-time agreements, or it can be long-term with multiple contracts with the same manufacturer.

There are many reasons why businesses outsource manufacturing, but the most common reasons are to save on costs, increase manufacturing capacity or reduce manufacturing lead times. A manufacturing company Hoboken NJ can help you with any of your manufacturing needs. There are seven different types of contract manufacturing:

1. Original Equipment Manufacturing (OEM)

An OEM contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be used in their own products.

2. Private Label Manufacturing (PLM)

A PLM contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be relabelled and sold under the contracting company’s brand name.

3. Custom Manufacturing

A custom manufacturing agreement is when a company outsources the manufacturing of products or parts that are designed according to the specifications of the contracting company.

4. Assembly and Packaging

An assembly and packaging contract manufacturing agreement is when a company outsources the manufacturing of products or parts that need to be assembled and/or packaged before they are shipped to the customer.

5. Component Manufacturing

A component manufacturing contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be used as components in other products.

6. Subassembly Manufacturing

A subassembly manufacturing contract manufacturing agreement is when a company outsources the manufacturing of products or parts that will be used as subassemblies in other products.

7. Turnkey Manufacturing

A turnkey manufacturing contract manufacturing agreement is when a company outsources the manufacturing of products or parts and the manufacturer also provides assembly, packaging, and shipping services.