Contract manufacturing is a business sector characterized by the production of large and complex items. It includes the production of medical equipment, surgical tools, communications equipment, military tactical gear and aircraft and missile defense systems. Contract manufacturers normally make up of an in-house team of personnel or outsource the entire task to a third party. A contract manufacturing facility can be either a small-scale venture or a large organization employing thousands of people. A contract manufacturing facility is a manufacturer which contracts with an external firm for products or components. It is also a form of outsourcing, wherein an external manufacturer performs manufacturing operations in exchange for a contract. A contract manufacturer doing packaging duties is known as a contract packer or copaker. On the other hand, a manufacturer who produces the finished product is called the fabricator, while the third party responsible for providing the labor and overhead expenses is called the assembler. There are contract manufacturing companies operating all over the world, especially in the United States. Some of these companies do not use the direct process of production but use a combination of in-house and outsourced production. In addition, some contract manufacturing companies require the assistance of subcontractors for some tasks, though the number of subcontractors is not as many as those of in-house manufacturer. The contract manufacturers on this link usually set up a fully automated production line. The major items produced during such production lines are finished goods, including parts, assemblies, accessories and finished products. In addition, some contract manufacturing requires the use of mainly raw materials, such as steel, and costly machinery and technology. The raw materials are primarily needed for the completion of the completed product. As a result of the high level of automation, the production output is very consistent, even when using a lower number of operators. Moreover, the material and labor costs are extremely low. The most important advantage of contract manufacturing from this company is its low-costs, which provide an attractive option for small-scale manufacturers. This is also the case with the smaller enterprises, which face numerous problems in attracting workers. They find it difficult to attract quality manpower, as well as high-quality machinery and technology. On the other hand, there is a turnkey approach to the whole system. This is adopted by large industrial manufacturers who adopt this method of production. For instance, in Ford, they have developed their own 100-percent turnkey approach, which enables them to produce parts and accessories at very low prices. The turnkey approach saves the manufacturer's considerable amounts of money and reduces risks, as well. This is the reason that a lot of automotive companies have adapted this technique. Discover more about this topic here: https://en.wikipedia.org/wiki/Manufacturing.
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