As a cornerstone of modern business strategy, contract manufacturing fuels the success of companies across a range of sectors – including medical, industrial, agriculture, sports & entertainment, and security, to name a few. Pivot International is a global leader in the contract manufacturing industry, with over 50 years of experience. We offer unparalleled expertise and complete end-to-end solutions for manufacturing projects, and we’re well-positioned to help you transform your concepts into commercially viable products that meet and exceed your expectations.

Contract Manufacturing Infographic

What Is Contract Manufacturing?

Simply put, contract manufacturing is a service agreement between two companies: one that needs a product manufactured (sometimes referred to as the ‘original equipment manufacturer’ or ‘OEM’) and another that offers manufacturing services. Instead of investing heavily in in-house production facilities, equipment, and staff, OEMs can leverage the existing resources, expertise, and production capabilities of experienced contract manufacturers like Pivot International.

For example, imagine a tech startup has an idea for a new smart device. Because the company is new, it most likely lacks the manufacturing infrastructure, funding, and experience needed to set up a production line. In this scenario, partnering with an established industry leader like Pivot would be mutually beneficial. Our comprehensive, end-to-end solutions turn innovative concepts like ground-breaking smart devices into tangible products. From procuring raw materials through production, quality control, and packaging, Pivot has the experience to successfully manage the production process from start to finish.

Since 1972, we’ve supported thousands of contract manufacturing projects. One example involves a healthcare company, WiscMed, that approached us with their game-changing medical device. Lacking the necessary manufacturing facilities, they turned to us. We used our global supply chain teams to source the electronic and custom mechanical components, provided design for manufacturing (DFM) feedback to make necessary design improvements, and ensured the final product met all the required ISO 13485 medical regulatory standards. This is just one example of how our manufacturing services allow businesses to focus on product innovation, marketing, and day-to-day operations while leaving the complex and often capital-intensive production process to us.

How Does Contract Manufacturing Work?

In contract manufacturing, your company provides us with all the necessary project details like designs, drawings, and prototypes. As your contract manufacturer, Pivot International employs a project management team, highly skilled engineers, state-of-the-art facilities, and robust supply chains to produce your product while strictly adhering to the agreed-upon specifications and quality standards.

Why Do Companies Use Contract Manufacturers?

Partnering with a contract manufacturer like Pivot has a wide range of benefits, all of which can provide significant cost savings due to reduced overheads associated with equipment, maintenance, and a trained workforce. Additionally, you gain access to our specialized skills, advanced technologies, and extensive industry experience, ensuring a high-quality, efficient production process. Contract manufacturing provides flexibility, allowing you to scale production volumes according to market demand without substantial capital investment.

Types of Contract Manufacturing:

While our manufacturing services span a wide range of industries and requirements, our primary area of expertise is Electronics Manufacturing Services (EMS).

EMS caters to the needs of the electronics sector, covering an even wider range of products. EMS includes the production of printed circuit boards (PCBs), complex electronics, semiconductors, telecommunications equipment, and other electronic devices. In essence, if a product includes a (PCB), it will require EMS.

Pivot brings decades of EMS experience, providing top-notch quality, reliability, and innovative solutions. We have over 300,000 sq. ft. of advanced production facilities located in three continents to ensure scalability and offer cost-effective solutions to our customers with every manufacturing project.

Regardless of your industry or specific needs, Pivot International’s extensive contract manufacturing services portfolio ensures we can deliver a winning solution for any client’s needs. Our commitment to quality, innovation, and customer satisfaction makes us a valuable partner for your next contract manufacturing project.

Who Uses Contract Manufacturing?

Contract manufacturing is mainly used by a wide variety of companies; however, some individual owners or entrepreneurs use contract manufacturers to produce their products. If your goal is to solidify a robust brand presence without heavy investments in infrastructure and inventory, contract manufacturing is a savvy choice.

Several types of companies use contract manufacturing, including:

Startups: A new company might not have the financial resources or the requisite experience to move quickly into production. Thus, contract manufacturing is an effective solution, enabling startups to direct their energies toward other crucial business aspects while their product manufacturing is expertly handled.

Companies Introducing a New Product: An enterprise with a newly developed product may need more facilities or resources for in-house manufacturing. By engaging a contract manufacturer, they can swiftly introduce their product to the market while maintaining focus on their core operations.

Companies Lacking Specific Expertise: Certain firms may wish to develop a new product outside their expertise. In such cases, they might collaborate with a contract manufacturer like Pivot, which already has experience in similar industries and markets, and is knowledgeable in various technical product requirements.

Established Companies: Many well-established entities opt for contract manufacturing to avoid the complexities of managing production lines or coordinating with employees across different regions. Moreover, contract manufacturing frees them to concentrate on their core competencies — selling their products and fostering customer relationships rather than producing the goods.

What’s the Difference Between Contract Manufacturing and Outsourcing?

Outsourcing and contract manufacturing are often used interchangeably but have fundamental differences. While they both involve delegating certain business operations to third-party firms, the scope and nature of the processes they pertain to are distinctly different.

Outsourcing can apply to multiple business processes like IT operations and customer support. The core idea behind outsourcing is to leverage external expertise, reduce operational costs, and focus on core competencies.

This differs from contract manufacturing, which strictly involves the production of goods. When a company enters a manufacturing agreement, they pass the responsibility of producing a particular product or a component to a third-party manufacturer. The manufacturing process is carried out based on the specifications, designs, and standards provided by the hiring company.

As a contract manufacturer, Pivot manages the entire production process from start to finish. We oversee everything from sourcing materials to quality control, assembly, and final product delivery. This allows our clients to utilize our resources, expertise, and established supply chains to produce high-quality products efficiently and economically.

While outsourcing is a general concept used across different business functions, contract manufacturing is a specialized form of outsourcing focused on the production of goods. Understanding this distinction is crucial when deciding the right strategy for your business needs.

What’s the Difference Between Private Label and Contract Manufacturing?

Private label and contract manufacturing are two strategies businesses employ to bring products to market, each with its unique approach and advantages.

Private Label Manufacturing: In a private label arrangement, a company sells products produced by a third-party manufacturer under its own brand name. These products are typically off-the-shelf or standard items the manufacturer already produces and sells to multiple companies. Each company then markets and sells the product under their own brand, often with minor or no modifications. Private labeling is a popular approach in industries such as cosmetics, grocery products, and clothing.

Contract Manufacturing: In contrast, contract manufacturing involves a more customized approach. In this setup, a company designs a product and then hires a third-party manufacturer, like Pivot International, to produce it according to their specific design, formula, or specifications. The contract manufacturer does not own the product; they merely produce it on the hiring company’s behalf. The advantage of contract manufacturing is that it’s highly customizable, ensuring the final product aligns closely with the OEM’s vision and market needs.

Why Pivot International Is Your Best Choice for Manufacturing Services

Pivot International offers complete contract manufacturing solutions ranging from design and engineering (DFM) to production and fulfillment. Our commitment to quality and innovation, paired with our advanced technologies and customized solutions, make us an ideal manufacturing partner.

We have over 300,000 square feet of manufacturing space that are spread across three continents. With locations throughout North America, Europe, and Asia, we offer our customers scalable, cost-effective solutions for all your product needs.

When you’re ready to take the next step, know that Pivot International is more than just a contract manufacturer – we are your strategic partner, committed to turning your ideas into reality. Contact us today to get started.

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