Introduction to Contract Assembly

Contract assembly is an approach in which a firm hires an outside manufacturer to produce components or final products based on the original manufacturer’s design. Assembly contracts operate differently than typical manufacturers. Contract manufacturing combines semi-finished products to produce a final good or product.

What industries utilize contract assembly?

Electronics

The electronics industry uses private label manufacturers to outsource manufacturing from all around the world. A final product might say “Made in China” but the individual products can be outsourced to different countries to create the final product.

Automotive

Nearly 50% of all car manufacturing is done off-site by contract manufacturers. Many automotive companies do not build all of the components to the vehicle, as these products are outsourced.

Pharmaceutical and Nutraceuticals

Contract assembly manufacturers produce chemicals for various products. Likewise, equipment for these pharmaceuticals and nutraceuticals are commonly outsourced to contract manufacturers.

Food Industry

The food industry uses contract assembly manufacturing to develop packaging for various food products.

Consumer Products

Contract assembly put together and assemble products for consumer use.

Entertainment

Assembling and packaging games and puzzles.

Industrial

Mechanical assembly for industrial products such as tractors and other farming equipment.