GLOBALIZATION AND CONTRACT OF MANUFACTURING

Globalization and Contract Manufacturing

Globalization and Contract Manufacturing

Companies in Contract Manufacturing

Following is the list of companies which are involved in the contract of manufacturing to enhance their growth and reduce cost.

Acer Inc.

Fujitsu

Nintendo

Compaq

Gateway

Nokia

AG

Genicom

Research In Motion

Alien ware

Hewlett-Packard

Samsung

Apple Inc.

Intel

Sharp Corporation

Asus

Lenovo

Siemens

Casper

LG

Sony

Cisco

Mandate

Sony Ericsson

Cisco

Microsoft

Sun Microsystems

Dell

MPC

Toshiba

Most of the companies enter into the contract of manufacturing to reduce the cost of doing business as the EMS providers are more specialized in one kind of operations and the cost is drastically decreased due to low labor and material cost (Liemt, 2007).

Why Companies Enter Into Contract Manufacturing

The division of tasks allows the sponsor to focus its resources on activities it deems strategic.

The company can achieve high level of competitive advantage because the EMS providers offer reduction in the cost of doing business as they are more specialized in one kind of operations and the cost is drastically decreased due to low labor and material cost. The competitive advantage is mostly achieved with respect to final prices.

Flexibility is improved; contract manufacturing can cope with peaks in activity.

Organizational complexity is reduced.

Contract manufacturing can provide access to specialized technologies or processes that would be difficult to obtain (should hire experts, take loads of training, etc). For instance: Building cars and headlights make notes of different skills, the automaker will speak thus to a subcontractor who will produce the headlights needed to be specified by the department. It becomes possible to have synergized scenario.

From the viewpoint of the company who get the contract, it guarantees them enough level of orders. There is a clear trend in this area: the relationship between sponsors and contractors move towards partnership relations based on mutual trust. The contractor obtains guarantee and longer-term contracts. It also gets benefits on marketing services which includes the advantage of no brand promotion, no advertising costs, and no need for expanded commercial ...