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    This book defines the contract manufacturing business model and defines and delineates the ample risks and benefits associated with employing the contract manufacturing strategy. Additionally, it also identifies the types of companies that should utilize a contract manufacturing strategy. 

    In a contract manufacturing business model, the hiring firm approaches the contract manufacturer with a design or formula. The contract manufacturer will quote the parts based on processes, labor, tooling, and material costs. Typically, a hiring firm will request quotes from multiple contract manufacturers. After the bidding process is complete, the hiring firm will select a source, and then, for the agreed-upon price, the contract manufacturer acts as the hiring firm's factory, producing and shipping units of the design on behalf of the hiring firm. Many industries use this process, especially the aerospace, defense, computer, semiconductor, energy, medical, food manufacturing, personal care, and automotive fields. ("Contract manufacturer", 2012). 

    Some of the utmost enticing benefits of leveraging a contract manufacturing strategy encompass cost savings, attaining quality control, being able to better focus on core competences, and benefiting from the manufacturer’s economies of scale. On the other hand, some of the disadvantages appertaining to embracing a contract manufacturing strategy can encompass outsourcing risks, possible capacity constraint, possible market responsiveness issues, loss of flexibility, and the possible loss of intellectual property ("Contract manufacturer", 2012). 

    Utilizing the contract manufacturing is an excellent strategy that is comprised of a copious amount of innate benefits and can be an eminently profitable strategy to employ for rapidly manufacturing products and more easily reaching foreign markets. A slew of high profitable companies utilize overseas contract manufacturers such as Apple, Nike, and Walmart.

    ©2019 Dr. Harrison Sachs (P)2021 Dr. Harrison Sachs

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