MANUFACTURING CONTRACTS HEDDY MENDEZ CAROLINA MENDIETA MATEO REYES

MANUFACTURING CONTRACTS A contractual agreement between a company and a foreign producer under which the foreign producer manufactures the company´s product is called contract manufacturing.

WHAT IS MANUFACTURING CONTRACTS? As part of the agreement, one company custom produces parts or other materials on behalf of their client. In most cases, the manufacturer also handles the ordering and shipment processes for the client. As a result, the client does not have to maintain manufacturing facilities, purchase raw materials, or hire labor in order to produce the finished goods.

Under this agreement the company retains responsibility for the promotion and distribution of its product.

EXAMPLE An American Pharmaceutical company may contract a company in India to manufacture its cough syrup. The Indian company manufactures it and does all the packing of the product as required by the American company. Then the American company takes the packaged product and markets it in India or even globally.

Nike, the athletic gear company uses contract manufactures throughout Asia to manufacture its footwear and sportswear.

CONCLUTION In this sense, the company limits its politically imposed and economical imposed financial risk. It helps the company with, the people management and financial costs.

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