What is Contract Manufacturing And How Does It Work ?

Key Takeaways

• Contract manufacturing converts factory investment into a variable operating cost, letting businesses scale without owning infrastructure.
• The process follows a defined 8-step workflow, skipping the NDA or pilot batch is where most businesses get burned.
• Turnkey, toll, OEM, OSP, and drop shipment are different models with different risk and control trade-offs, picking the wrong one is a common mistake.
• The benefits are real, but so are the risks. IP exposure, MOQ constraints, and manufacturer dependency are not edge cases.
• India's contract manufacturing ecosystem is sector-specific, the right manufacturer for pharma is not the right one for food or electronics.