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Contract manufacturingis generally considered as “outsourced” assembly or manufacturing / production, where one firm is enlisted to produce components or complete products for another. The product design belongs to, or is owned-by, the customer company and the contraction provides the assembly services. Typically, a design or formula is presented to the contract manufacturer whereby a quote is generated based on labor, processes, material costs, and tooling.

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The primary benefit is the expansion of the core skills and competencies of the contracting company. Functions and services that may not be possible entirely, or in the quantity required, can be realized via the contract manufacturing relationship.

Other benefits include product cost savings, and lower costs of capital investment as the supplier provides the equipment and facilities required for manufacturing and test.

To be successful, a contract must be mutually beneficial to the hiring company and the contract manufacturing firm. Then both can depend on a steady flow of work, consistent quality control, on-time delivery, etc.

While base production is handled through the contract manufacturer, the hiring company can maintain their focus more closely on matters that cannot be outsourced (such as innovation, marketing, etc.) From a microeconomics standpoint, contract manufacturing plays a major role in economies of scale, as manufacturing costs can be greatly reduced.

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Contract manufacturing has applications spanning a wide range of industries, including energy, semiconductor, computer, automotive, personal care products, food manufacturing, medical, defense and aerospace.

The types of work which may be executed via contract manufacturing include printed circuit board assembly, system or box build, cable assemblies / harnesses, forging, gears, broaching, grinding, aluminum die casting, complex assembly, and CNC machining.

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Optima Technology Associates,provides support for all steps for your contract assembly needs for electronic assembly. This includes: engineering design, PCB manufacturing, PCB assembly, system assembly, testing, qualification, and logistics support. We are flexible and responsive, providing global resources paired with local support since 1995. Optima’s US-based offices are close to you, promoting client synergy & connection to our cost-effective manufacturing facilities.

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