Contract Manufacturing is when a contract manufacturer enters an agreement with another company to make certain components or products over a specified period.
Regarded as a type of outsourcing, a contract manufacturer may enter a business relationship with a company to produce parts, components, or entire products for the firm in accordance with their specifications. The company then uses the manufactured goods in its own production process or to finish off its own products.
Contract manufacturers are frequently independent companies that specialize in subcontracting or market their goods to other companies or agencies.
In NetSuite, this is more commonly known as Outsourced Manufacturing. NetSuite users who are in this type of industry and have not started using this feature yet may consider checking NetSuite’s Outsourced Manufacturing documented in SuiteAnswers ID 91095and other related SuiteAnswer articles.
According to SuiteAnswers ID 91095, this feature is designed to help customers manage their subcontracted manufacturing processes by purchasing outsourced assembly production from vendors. This also enables NetSuite to automatically consume production components, and then after production, transfer them to a specified location.
It is important to keep in mind that before enabling this feature, there are prerequisite features that must be enabled. You can also visit SuiteAnswers ID 91238 to check the list of prerequisite features and to guide you in setting up Outsourced Manufacturing.