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Contract Manufacturing

In: International Operations Management: Concepts and Applications

Author

Listed:
  • Chung Lai Johnny Wan

    (University of Wales Trinity Saint David)

  • Yulan Wang

    (The Hong Kong Polytechnic University)

Abstract

This chapter focuses specifically on contract manufacturing. The first part of this chapter discusses the advantages and disadvantages of adopting contract manufacturing. On the one hand, cost reduction, flexibility, and better resource allocation provide incentives for a company to outsource manufacturing to a contract manufacturer. On the other hand, the creation of new competitors and brands and intellectual property leakage are common problems that may arise. Managing contract manufacturers and other supply chain members is critical to mitigate these issues. The second part of this chapter explores the cooperation, competition, and co-opetition relationships between companies and their contract manufacturers in China, along with relevant strategies and tactics. To provide a counterexample, this chapter concludes with the case of Samsung, which adopts a more integrated approach to manufacturing.

Suggested Citation

  • Chung Lai Johnny Wan & Yulan Wang, 2025. "Contract Manufacturing," Springer Texts in Business and Economics, in: International Operations Management: Concepts and Applications, chapter 6, pages 101-110, Springer.
  • Handle: RePEc:spr:sptchp:978-981-96-6665-2_6
    DOI: 10.1007/978-981-96-6665-2_6
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