Why contract manufacturing is both critical and crucial


Glatt Ingenieurtechnik, Weimar, Germany


For decades, large companies have outsourced production capabilities, thus driving globalisation – but also contributing to the decline of domestic industries. Digitalization, however, means it makes sense for more and more well-known global players to relocate production back to Europe. Contract manufacturing, for example, gives an idea of where this journey can take us.

For a long time, the outsourcing of certain manufacturing tasks promised potentially large cost-savings for companies, with personnel-intensive business areas reduced in size or even closed completely and processes – from toy production to the manning of telephones – relocated in order to save time and money. At the same time, service providers who were not only able to cope with special projects, but were also increasingly able to build up technological know-how, found an increasing demand for their services. The reason for this was – and still is – the continued and growing need for tailor-made services. As a result, quite a few contract manufacturers are now acting as full-service providers and can cover the entire process chain, from product development, approval service, raw material procurement and production to packaging and delivery.

Other contract manufacturers – in the pharmaceutical sector, for example – specialize in certain dosage forms. In general, the pharmaceutical industry can be used as an example of how close and successful business relationships between clients and service providers are mu ...