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Semiconductor

Contract Manufacturing Excellence

Contract Manufacturing as a strategy to achieve supply chain flexibility & to offset increasing fixed costs is fast becoming a norm across industry sectors. To realise full benefits of this strategy, companies need to evolve a new operating model & adopt new ways of working

"In response to the dynamic nature of customer demands and service requirements, the growing complexity of supply chains, and the mounting challenges of fixed costs, an increasing number of companies are turning to third-party manufacturing as a viable strategy. While this strategy offers several advantages, it also presents risks and challenges concerning product quality consistency, on-time delivery, and adherence to process norms.

To fully leverage the benefits of contract manufacturing operations, companies must address the following questions . 

  • Collaborating with third-party manufacturers demands a distinct approach compared to managing traditional vendors. What operating model, processes & governance mechanisms are required to achieve this shift?

  • Most 3rd Party manufacturers are smaller promoter driven entity with limited formal processes, systems & structure. Keeping these limitation, how can we achieve process & systems excellence to desired levels

  • What processes & mechanisms are required to address the statutory, customer, financial, operational & safety related risks involved with third party setups?

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Further Reading

Operating Model Design for Contract Manufacturing  

Realising full benefits from Contract Manufacturing would need holistic approach to designing an operating model which is fit for purpose and establishes strong working culture between the two parties

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