contract manufacturer

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contract manufacturer

An organization that makes products under contract for other companies. It caters to the OEM market. In the computer and electronics fields, thousands of products are manufactured by contract manufacturers. These products are ordered by and branded with the OEM's name, which sells them to its customers.

Contract Manufacturers Can Be Huge
Some of the most popular products in the business are made by contract manufacturers. For example, Microsoft's Xbox game machine is made by Flextronics Corporation (, a huge company with factories around the world and nearly USD $15 billion in sales in 2004. Flextronics also makes cellphones for Ericsson, routers for Cisco and printers for HP. Other major contract manufacturers are Flextronics International (, Sanmina-SCI Corporation ( and Celestica (

An "original design manufacturer" (ODM) is similar to a contract manufacturer, but typically owns the intellectual property (IP) for the product itself, while the regular contract manufacturer uses its customer's designs and IP. Contract manufacturers can make hundreds or even thousands of different products, but ODMs often specialize in only a handful of categories.

Contract manufacturers in the electronics field that not only make products, but offer assistance with the design and supply chain generally prefer to call themselves "electronics manufacturing services" (EMS) or "contract electronics manufacturing services" (CEMS). See OEM.
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References in periodicals archive ?
For an outsourcing relationship to be successful, a contract manufacturer must provide the desired product cost, product quality, on-time delivery and the flexibility to manage change; plus required formulation, packaging, manufacturing and logistics services and expertise.
In fact, the FDA requires the OEM to periodically audit the contract manufacturer and evaluate its ability to meet the OEM's quality system requirements.
The confidence must encompass product safety and efficacy, and this rests almost entirely on the services provided by the contract manufacturer.
Simply comparing quotations from a variety of contract manufacturers doesn't identify the best supplier.
But it's not just as easy as hanging a sign on the door announcing the contract manufacturer now offers design services.
To get the most benefit from a contract manufacturer all staff resources should be pooled together to discuss and evaluate a potential product.
In many cases where a contract manufacturer is working off purchase orders, simply a quality assurance or quality agreement is utilized.
Companies usually seek the services of a contract manufacturer because they want the benefits of having a manufacturing operation without the overhead or the headache.
Mack Molding, a custom molder and contract manufacturer headquartered in Arlington, Vt.
A contract manufacturer of a variety of plastic components reduced its initial scrap rate by more than 90% and lowered its purging costs by 52% when it switched from using in-house resins to commercial purging compounds to purge its two Van Dorn 230 cold runner injection molding machines.
Euronext, NASDAQ: CRXL) has announced that allied contract manufacturer DSM Biologics has signed a PER.
There will be significant changes in the worldwide biopharmaceutical contract manufacturing industry over the next years as contract manufacturers add new capacity and expand their service offerings.

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