Contract Manufacturing

Chung Lai Johnny Wan and Yulan Wang
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Chung Lai Johnny Wan: University of Wales Trinity Saint David
Yulan Wang: The Hong Kong Polytechnic University

Chapter 6 in International Operations Management: Concepts and Applications, 2025, pp 101-110 from Springer

Abstract: 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.

Date: 2025
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DOI: 10.1007/978-981-96-6665-2_6

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