“SURVIVAL STRATEGY” FOR THE ORIGINAL PRODUCT MANUFACTURER IN DEALING WITH CONTRACT MANUFACTURERS
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Contract manufacturing has become a popular strategy by which the Original Product
Manufacturer (OPM) is able to fill excess orders which are beyond his normal factory capacity.
This strategy is very useful to enable the (OPM) to satisfy and retain his customers. However,
engaging a Contract Manufacturer (CM) to provide the best of services to the original product
manufacturer can be a hazardous business. This kind of contract engagement has recorded
good measure of successes as well as numerous failures and betrayals. The breach ranges from
inability of the contract manufacturer to perform adequately to wholesale take-over of the
product brand by the contract manufacturer. It is therefore advisable that the original product
manufacturer should be cautious in revealing his top business secrets, core competencies and
intellectual property to the contract manufacturer. As much as possible, the production contract
should be in writing and must be made to cover all possible eventualities. Under thoroughlyframed
contract agreement, contract manufacturers have been found to stay on course if they
realize that a breach or betrayal will tell adversely on them.
Keywords
H Social Sciences (General)