Contract manufacturing

Contract manufacturing

The manufacturing of goods and products by one company under the label or brand of another. Contract manufacturing is a process in which one company outsources part or the entire manufacturing production to another company for such benefits as cost savings, improved quality, increased ROI, reduced safety risks, enhanced business focus, and faster speed.

Industry: Manufacturing

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Contract manufacturing

Return on invested capital

Manufacturing; Contract manufacturing

An important model (net profit divided by PP&E + inventory + accounts receivable - accounts payable) that can help OEMs determine the cost effectiveness of outsourcing. By decreasing fixed costs, ...

Time to market

Manufacturing; Contract manufacturing

The length of time it takes to get a quality product into the marketplace. Faster time to market is a critical business objective for all manufacturers. Companies in every industry are using speed as ...

Original equipment manufacturer (OEM)

Manufacturing; Contract manufacturing

A company that designs and specifies products under its own company name and brand. Traditionally, OEMs design products, purchase components from suppliers, operate their own manufacturing plants, ...

Request for quote (RFQ)

Manufacturing; Contract manufacturing

A document that is prepared by the OEM and submitted to the EMS provider for quotation. It typically includes product specifications and quantities, in addition to an AVL and BOM. The RFQ should also ...

Plants, property and equipment (PP&E)

Manufacturing; Contract manufacturing

Key elements of a fixed-asset manufacturing model. Plants include factories and warehouses. Property includes land and leasing. Equipment includes production tools and automated assembly machines.