Frequently Asked Questions
How does the bidding process work in contract manufacturing?
The bidding process in contract manufacturing is a crucial step that determines which contract manufacturer (CM) will produce the products for the hiring agency. The process begins when the hiring agency requests quotes from several CMs. These quotes are based on various factors such as processes, labor, tooling, and material costs. Once the quotes are received, the hiring agency evaluates them and selects a source. This selection is not solely based on the cost but also considers factors like the CM's capabilities, quality control strategies, and reputation in the market. The chosen CM then acts as the hiring agency's manufacturing facility, producing and shipping goods according to the design provided by the hiring agency, all for the agreed-upon cost. This process allows the hiring agency to save on capital costs as they do not have to invest in a manufacturing facility or equipment. They can also save on labor costs such as wages, training, and benefits. Furthermore, contract manufacturers often have their own quality control strategies in place, which can help detect counterfeit or damaged supplies early.
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