Contract Manufacturing Research Articles (Page 1)

As environmental degradation intensifies, governments increasingly subsidize green manufacturing to promote sustainability. This study develops a game-theoretic model of two competing supply chains, comprising original equipment manufacturers (OEMs) and both traditional and green contract manufacturers (CMs), to investigate the impacts of subsidies on green manufacturing adoption. Specifically, we construct a four-stage dynamic game model to examine the interactions among OEMs, CMs, and the government. The main findings are as follows: First, the government subsidy affects OEMs’ adoption decisions only if the production cost of green manufacturing or competition intensity is sufficiently high or if the market sensitivity to green products is relatively low. Second, the optimal subsidy level depends jointly on the production cost of green manufacturing, competition intensity, and market greenness sensitivity: when the production cost of green manufacturing is low (high), the subsidy should rise (fall) with market greenness sensitivity but fall (rise) with competition intensity. Third, while intensified competition reduces OEMs’ profits and overall supply chain performance, its impact on CMs and consumers depends on the production cost of green manufacturing; in contrast, greater consumer sensitivity to green products yields an all–win outcome for all stakeholders. These results yield important managerial implications. For policymakers, when the production costs of green manufacturing are relatively low, green subsidies should be scaled back as market competition intensifies. For manufacturers, it is critical to carefully evaluate the production costs of green manufacturing and the level of government subsidies and to strategically pursue first-mover advantages in advancing sustainable operations, thereby fostering an all-win outcome for stakeholders.

This study investigated whether data-driven industrial engineering models improved efficiency and reduced risk in U.S. apparel supply chains, a domain with high clockspeed and volatile demand where causal mechanisms were often under-specified. The purpose was to estimate associations between the adoption intensity of analytics-supported line balancing, statistical process control, stochastic inventory and scheduling, and simulation-backed capacity planning and two outcome families: operational efficiency and operational or supply risk. The design was quantitative, cross-sectional, and multiple-case. A focused narrative review of 44 peer-reviewed studies informed construct definitions and item wording. The sample comprised 208 analyzable cloud and enterprise cases drawn from brand owners, contract manufacturers, and distribution partners, with managers as respondents and optional KPI uploads. Key variables included adoption, process standardization as a mediator, supply chain complexity as a moderator, and composites for efficiency (on-time in-full, order cycle time, throughput, unit cost, rework, appropriately reverse coded) and risk (disruption frequency, lead-time variability, stockout, returns or defects, compliance). The analysis plan specified descriptives, correlations, ordinary least squares with robust or clustered standard errors and a common control set (size, automation, capital intensity, market segment, nearshoring ratio, supplier reliability, demand clockspeed), moderated models with mean-centered interactions, bootstrapped indirect effects for mediation, and robustness checks including alternative index constructions and influence diagnostics. Headline findings indicated that higher adoption was associated with higher efficiency and lower risk after controls, with partial mediation through process standardization and attenuation of effects at very high complexity; results were stable across robustness specifications. Implications for practice included sequencing capability building from measurement to modeling to routinized execution, modularizing product and network complexity, and treating analytics pipelines as governed infrastructure while interpreting estimates as associations rather than causal effects.

Waiting or inferring information from competitive contract manufacturer: The role of brand relatedness under disclosure policy

Shrinking demand and intensifying competition brought about by anti-globalization cause numerous contract manufacturers (CMs) to suffer from the decline in original equipment manufacturers’ (OEMs’) outsourcing orders. Introducing private brand (PB) products to compensate for the loss and adopting platform channel to sell PB products for the CMs are very widespread. Motivated by the observation, this article investigates the performance of CM’s different platform channel strategies for PB products. Our results reveal that when consumers’ willingness-to-pay for PB products is high, if agency fee is low, the CM’s optimal platform channel strategy is to directly sell PB products through the common platform retailer (p-retailer), who also sells OEM’s national brand products; as agency fee increases, the CM should shift to directly sell PB products through the exclusive p-retailer, who does not sell OEM’s national brand products; if agency fee exceeds a certain level, the CM should wholesale PB products to the exclusive p-retailer. Moreover, wholesaling PB products to the common p-retailer creates a “win-win-win” outcome for the CM, the OEM and the common p-retailer if consumers’ willingness-to-pay for PB products is low.

PT X merupakan suatu perusahaan contract manufacturer yang memproduksi item berbahan dasar logam dan telah menjalin kontrak dengan beberapa produsen sehingga terdapat variasi pada permintaan item yang diproduksi. Permintaan terhadap seluruh item dapat dipenuhi dengan adanya 4 departemen yang dimiliki oleh PT X, yaitu departemen cutting, milling, Computer Numerical Control (CNC), dan press. Dari keempat departemen tersebut, departemen CNC menjadi departemen dengan persentase produktivitas terendah pada tahun 2023. Hal tersebut disebabkan karena tidak adanya alat atau dashboard yang dapat memantau kondisi mesin CNC secara real-time. Untuk mengatasi permasalahan tersebut, maka dirancang sebuah sistem dashboard untuk memantau produktivitas pada mesin CNC. Metode yang digunakan dalam perancangan dashboard pada penelitian ini adalah metode Vilarinho, yang dimulai dengan melakukan diagnosis terhadap area produktif, dilanjutkan dengan merencanakan dan mengidentifikasi kebutuhan sistem, mengembangkan sistem, serta diakhiri dengan menguji dan mengimplementasikan sistem yang telah dirancang. Sistem dashboard dikembangkan dengan menggunakan software Node-Red dan diimplementasikan secara langsung pada 2 mesin CNC. Sistem dashboard dilengkapi dengan tampilan dashboard yang dapat menyajikan data dan informasi yang menggambarkan produktivitas mesin CNC di PT X. Dashboard akan digunakan untuk keperluan pemantauan dan pengambilan keputusan bagi pihak manajerial dan staff produksi terhadap proses produksi di mesin CNC.

The development of contract manufacturing (CMO) in the Republic of Kazakhstan is becoming strategically important in the context of high dependence on imports and the need to improve drug safety. The purpose of the study is to analyze international experience and identify prospects for Kazakhstan in this area. Materials and methods. A comparative analysis of the development of contract manufacturing in the leading countries is carried out. Results. Kazakhstan is still at the initial stage of CMO development. The main problems are weak infrastructure, dependence on imports, lack of technology and innovation, and regulatory barriers. Discussion. Contract manufacturing can reduce costs, speed up access to medicines, and increase independence. Kazakhstan needs to modernize its infrastructure, harmonize standards with international ones, encourage investment and develop biopharmaceuticals. The experience of India and China can serve as a guideline. Conclusion. Contract manufacturing has a high potential for the development of the pharmaceutical industry in Kazakhstan. To achieve pharmaceutical independence, it is necessary to expand production capacities, introduce international standards, develop export potential and attract investments

Industrial valves, which control the flow of fluids such as liquid, gas or vapor, are an essential part of modern industrial processes. The gearboxes used in industrial valves are critical components that optimize power transmission and control. Design and quality of gearboxes have a great impact on efficiency and safety of the processes. In this concern, analyzing gearbox manufacturing processes and carrying out process improvement studies will provide advantages to manufacturers in terms of time, cost and quality. This study aims to analyze and improve the gearbox manufacturing process of an industrial valve manufacturer. To this aim, the current gearbox manufacturing process was simulated and the bottleneck station was identified. In order to overcome the bottleneck, alternative production scenarios such as contract manufacturing and new machine investment were proposed. Afterwards, simulation models for alternative scenarios were developed, taking into account the quality problems that may occur in alternative scenarios and the investment cost associated with the new machine investment. Finally, all alternative production scenarios were compared with the current situation in terms of production quantities, makespan and profit. The results revealed that investing in a new machine is more profitable for the company than contract manufacturing.

The globalization of production promotes the adoption of Contract Manufacturing (CM) mode, enhancing the efficient utilization of production resources. In this mode, multiple Original Brand Manufacturers, acting as agents, delegate their production tasks to a single Original Equipment Manufacturer. In this scenario, agents share production resources and compete priority for each other. To reveal the nature of the competitive agents, this article investigates a bi-agent single-processor scheduling problem. It incorporates release dates to reflect the scenario where orders arrive in actual production settings. The objective is to enhance customer satisfaction by minimizing the sum of maximum lateness of two agents. A mixed integer programming model is formulated to address this NP-hard problem. For small-scale problems, a branch and bound algorithm featuring effective lower bound and branching strategy is proposed. It is complemented by a heuristic algorithm based on Earliest Due Date List-Revising, providing an initial upper bound. For middle-scale problems, a hybrid discrete differential evolution algorithm is developed, incorporating enhanced crossover and mutation operations and a variable neighborhood search strategy to avoid local optima. Simulation experiments endorse the high efficiency of the proposed algorithms.

Strategic decentralization of self-branded and contract manufacturing businesses

As environmental issues are of worldwide concern and consumers grow more concerned about the environment, green investments have emerged as a key factor in attracting consumers. To enhance consumer trust in enterprise investments in green and sustainable practices, blockchain technology, with its tamper-resistant and traceable characteristics, is being adopted by an increasing number of enterprises. However, the resulting spillover effect may lead to adverse consequences in a co-opetitive supply chain. This study examines a green supply chain comprising Brand O, a high brand value entity, and a contract manufacturer (CM) with lower brand value. The two parties collaborate through outsourced production while competing in the retail market. Three decision-making models were constructed, namely, without blockchain, Brand O adopting blockchain, and the CM adopting blockchain, and equilibrium solutions were derived to facilitate analysis. We find that Brand O tends not to introduce blockchain in order to avoid the loss of brand value and the spillover of consumer trust. The CM tends to introduce blockchain to enhance its products’ environmental impact and gain an exclusive competitive advantage, targeting the high-end market. These findings guide managers and practitioners in a co-opetitive green supply chain: high brand value retailers should cautiously evaluate blockchain’s impact, staying alert to risks hidden beneath benefits; upstream manufacturers can prioritize blockchain adoption for competitive advantage.

Over the past years, the biopharmaceutical industry has been marked by substantial growth, with key players dominating market sales. A major change in research and development is the onset of digital twin (DT) technology in manufacturing. This work gives an overview of the market and major stakeholders, such as contract development and manufacturing organizations (CDMOs), regulatory bodies, and academia, their functions, and challenges. Fundamental concepts and definitions are reviewed and serve as an overview of the challenges ahead of the full adaptation of DTs in manufacturing. Using established market analysis tools, the environment is analyzed, and a business case is developed. Opportunities and threats for small startups and larger pharmaceutical companies to gain a competitive edge are analyzed and evaluated. Even small groups of 4–16 employees enable significant margins at a return on investment of less than 1 year.

At this stage, with the treacherous situation of international economic and trade relations, the trend of anti-globalization and the resurgence of trade protectionism, the traditional global multilateral trade negotiation system within the framework of the world trade organization is blocked, and a new pattern of the world economy with bilateral trade cooperation and regional economic integration as the main body is taking shape. China's formulation and deepening of digital trade rules is an important factor in realizing the leap in the embedded status of the global value chain. Only by fully understanding the game situation of global digital trade rules can we find out the pain points and difficulties of China in the negotiation of digital trade rules. The game focus of International Digital Trade Rules Negotiation mainly involves four aspects: tariff barriers, non-tariff barriers, consumer rights protection and digital trade facilitation. The current digital trade rule templates of developed countries such as the United States, Japan and Europe have some problems, such as the difficulty in dividing the ownership of tax rights and profits, the "two-level differentiation" of data value-added, the "catch-up trap" of low-end contract manufacturers, and the "technology gap" between chain owners and local enterprises in the global value chain. In this regard, it is suggested to establish and improve the data element market system, establish a supporting system for digital trade tax supervision, establish a support system conducive to the development of key digital technology industries, strengthen the talent agglomeration effect, promote the in-depth cooperation between industry, University and Research Institute, deeply tap the interests of the agreement, focus on the key nodes of the network, pool the rule consensus of developing countries, deepen the research on key digital trade rule issues, and explore a win-win model with developed countries.

Background. The article analyzes the possibilities and limitations of integrating artificial intelligence into the judicial system of the Russian Federation using the example of procedural legislation. Purpose. The purpose of the study is to assess the compatibility of artificial intelligence technologies with the domestic legal system, identify legal conflicts and develop recommendations for adapting legislation. Methodology. During the research, the method of analysis, formal legal, comparative legal and hermeneutic approaches were used. The study used regulatory legal acts of the Russian Federation, the EU, Canada, the USA and China, scientific legal research and the legal press. Results. The main results of the study showed that the current procedural legislation of the Russian Federation is not adapted to the use of artificial intelligence. Experiments with "weak artificial intelligence" in contract manufacturing (Belgorod and Amur regions) have confirmed the need for legislative changes. Key problems were identified: algorithmic bias (using the COMPAS system as an example), lack of legal entity status for artificial intelligence, risks of cyber-attacks, contradiction to the principles of competitiveness, internal persuasion and independence of judges. Practical implications. Based on the analysis of foreign experience, recommendations are proposed: the consolidation of artificial intelligence as an auxiliary tool, the development of standards for the transparency of algorithms, the introduction of a risk-based approach, the training of judges and the creation of specialized legislation. The recommendations can also be used by the legislator when conducting research on the topic of the article. The importance of maintaining a balance between innovation and respect for the fundamental principles of law is emphasized. EDN: YRZZSB

В статье рассмотрены особенности интеграции экономики Республики Казахстан в глобальные цепочки добавленной стоимости (ГЦДС). Рассмотрены современные теоретические подходы к анализу ГЦДС, включая классификацию типов управления цепочками, распределение рент и уровни власти в глобальной экономике. Казахстан преимущественно вовлечен в ГЦДС через сырьевые поставки и контрактное производство с ограниченными возможностями для повышения локальной добавленной стоимости. Выявлены ключевые вызовы, связанные с доминирующей сырьевой ориентацией экономики и низким уровнем добавленной стоимости в экспортируемой продукции. Определено, что Казахстан сталкивается с риском «ловушки низкой стоимости», что требует стратегического подхода к модернизации участия страны в ГЦДС. Проанализирована Концепция инвестиционной политики Республики Казахстан до 2029 года, выявлены ее основные направления, ориентированные на привлечение инвестиций в перерабатывающую промышленность. Предложенные меры носят преимущественно тактический характер и не обеспечивают системных условий для увеличения доли несырьевого экспорта. Выявлены несоответствия между инвестиционной стратегией и программами других министерств, что ограничивает эффективность государственной политики. Для успешной интеграции в глобальные цепочки добавленной стоимости Казахстану необходимо сосредоточиться на развитии перерабатывающих отраслей и внедрении инноваций, что позволит повысить добавленную стоимость на всех этапах производственного процесса. The article discusses the features of the integration of the economy of the Republic of Kazakhstan into global value chains (GCS). Modern theoretical approaches to the analysis of GCS are considered, including the classification of types of chain management, rent distribution and levels of power in the global economy. Kazakhstan is predominantly involved in GCS through raw materials supplies and contract manufacturing with limited opportunities to increase local added value. The key challenges associated with the dominant commodity orientation of the economy and the low level of added value in exported products are identified. It is determined that Kazakhstan is facing the risk of a "low cost trap", which requires a strategic approach to modernizing the country's participation in the GCC. The Concept of the investment policy of the Republic of Kazakhstan until 2029 is analyzed, its main directions focused on attracting investments in the processing industry are identified. The proposed measures are mainly tactical in nature and do not provide systemic conditions for increasing the share of non-primary exports. Inconsistencies have been identified between the investment strategy and the programs of other ministries, which limits the effectiveness of government policy. For successful integration into global value chains, Kazakhstan needs to focus on the development of processing industries and the introduction of innovations, which will increase added value at all stages of the production process.

The study aims to evaluate the feasibility of investing in producing pasteurized bottled fermented fish sauce in Thailand. The study involves in-depth interviews with 20 participants from various Thai organizations associate with fermented fish products. Qualitative data is analyzed by using content analysis. Regarding traditional enterprises, with 2-3 personnel, invested about 1 million baht. The average payback period was 8.31 months, yielding returns above 30 percent. Enhancing consumer trust in product hygiene required improved processes. Conversely, manufacturers revealed larger workforces, with 30-40 employees, and substantial initial investments around 30 million baht. Their extended payback period was 10.40 months generated returns exceeding 25 percent. The greater investment necessitated sustained high-volume production. Manufacturers often balanced in-house and contract manufacturing, even among competitors, to optimize profit. In the context of brand owners outsourcing production, findings indicated a 30,000 Baht initial fee, requiring a minimum order of 10,000 bottles or more for a 6 percent return on investment. Larger orders exhibited lower production costs and higher returns. Compliance with a 1-year product shelf life was crucial for larger orders. The payback period hinged on distribution efficiency. Manufacturers should produce both smell and non-smell products in order to have a variety of products that can meet different groups of consumers.

Interest in pulmonary/nasal routes for local delivery has significantly increased over the last decade owing to challenges faced in the delivery of molecules with poor solubility, systemic side effects, or new modalities such as biologics. This increasing interest has attracted new stakeholders to the field who have yet to explore inhaled drug product development. Contract development and manufacturing organizations (CDMOs) play a key role in supporting the development of drug products for inhalation, from early feasibility to post marketing. However, a critical gap exists for these newcomers: a clear, integrated, and a CDMO-centric roadmap for navigating the complexities of pulmonary/nasal drug product development. The purpose of this publication is to highlight the key aspects considered in the product development of inhaled dry powder products from a CDMO perspective, providing a novel and stepwise development strategy. A roadmap for the development of inhalable drug products is proposed with authors' recommendations to facilitate the decision-making process, starting from the definition of the desired target product profile followed by dose selection in preclinical studies. The importance of understanding the nature of the API, whether a small molecule or a biologic, will be highlighted. Additionally, technical guidance on the choice of formulation (dry powder/liquid) will be provided with special focus on dry powders. Selection criteria for the particle engineering technology, mainly jet milling and spray drying, will also be discussed, including the advantages and limitations of such technologies, based on the authors' industry expertise. Lastly, the paper will highlight the challenges and considerations for encapsulating both spray dried and jet milled powders. Unlike existing literature, this paper offers a unified framework that bridges preclinical, formulation, manufacturing, and encapsulation considerations, providing a practical tool for newcomers.

Consumers are inclined to make comparisons among brands. When brands with different popularity outsource to a common contract manufacturer (CM), it is highly prone to triggering consumer comparison behavior which can result in reference price effect. This article investigates how brands optimally choose sourcing strategy and competitive pricing strategy with consumers’ reference price effect. We focus on a supply chain consisting of one CM and two brands. Both brands can choose to insource or outsource to CM which has a cost advantage. Correspondingly, both brands are faced with a competitive pricing problem. We find that (i) if consumer’s acceptance of weak brand and the production cost is high, price competition is the fiercest in situation where both brands outsource to CM; otherwise, price competition is the fiercest in situation where weak brand exclusively outsources to CM. (ii) Either strong brand or weak brand prefers to exclusively outsource to CM while CM prefers the brands to simultaneously outsource. (iii) A strong reference price effect will always hurt strong brand but benefit weak brand no matter what reference price is considered. (iv) CM will be better (worse) off if strong (weak) brand’s retail price is regarded as the reference price.

The once highly anticipated JIYUE Automobile declared bankruptcy in 2024 due to a chain reaction caused by Baidu's withdrawal of investment. This article aims to delve into the bankruptcy of JIYUE Automobile, revealing the financial difficulties behind it, and providing a warning for the new energy vehicle industry. In its development process, JIYUE Automobile faced difficulties with a tight capital chain, blocked financing leading to an expanding funding gap, high operating costs, a severe imbalance between investment and output in research and development, production, and marketing, and a continuously rising debt-to-asset ratio, raising concerns about its ability to repay debts. At the financial management level, budget control failed, the efficiency of capital use was low, and cost accounting was imprecise, with these issues gradually emerging. This event serves as a wake-up call for the new energy vehicle industry, indicating that companies must pay attention to financial risk management, build a comprehensive capital early warning mechanism, and plan capital use reasonably; at the same time, strengthen financial budget management, enhance the scientific nature and execution of the budget; and focus on cost optimization to ensure the rationality of input and output, to enhance the company's ability to resist risks in the market, avoid repeating JIYUE Automobile's mistakes, and promote the healthy, stable, and sustainable development of the industry. By analyzing the problems existing in the operation of the enterprise, it was discovered that they exposed numerous financial issues. In terms of identifying financial loopholes, the capital chain was broken, the planned 3 billion in financing did not arrive, and overdue payments to Geely for contract manufacturing caused production lines to halt; financial management was chaotic, with 7 billion in financial debt, insufficient investment in research and development, annual expenses far below the industry average, excessive marketing while neglecting core competitiveness and market research, and a debt-to-asset ratio far exceeding industry standards; internal management also had issues, with layoffs and cuts unable to save the situation, severe delays in employee salaries, social security, and supplier payments. In response to these problems, it is proposed that preventing corporate financial loopholes requires a two-pronged approach. First, establish a comprehensive internal control system, clarify division of responsibilities, authorization and approval systems, and accounting systems; second, strengthen the training of financial management personnel, improving their professional quality and ethical standards; third, implement financial fraud risk assessment, regularly identifying potential risks; at the same time, strengthen internal audit supervision, establish a professional audit team, ensure the independence of audits, use advanced audit technologies, strengthen communication and cooperation in audits, and improve audit systems and processes. From a macro perspective, examining the financial difficulties exposed by the bankruptcy of JIYUE Automobile aims to provide a reference for the new energy vehicle industry to address similar issues and offer insights for other companies in the industry, helping to improve internal deficiencies.

In the midst digital transformation, MSMEs, especially the West Java Footwear Producers Alliance (ASPAK JABAR) in Indonesia, face new marketing challenges. This study focuses on implementing Content Creation Training (CETAR) to help ASPAK JABAR transition from contract manufacturing to retail by enhancing their digital marketing skills. CETAR includes training in copywriting, public speaking, and video editing. The implementation method of the study uses Pragmatic Action Research (PAC) approach. Results show that CETAR improves ASPAK JABAR's digital marketing abilities, including social media use, copywriting, design, public speaking, and video editing. The program positively impacts MSMEs, enhancing visibility and business opportunities. CETAR is a creative solution for digital marketing challenges, contributing to MSMEs' economic development in Indonesia.

Globally, industrial biotechnology addresses diverse challenges, fostering environmental conservation, sustainable development, economic growth, and innovation. Currently, there are approximately 20,922 biotech companies worldwide, including 6,653 in the US, reflecting significant growth. The global biotech market is valued at $727.1 billion and is projected to expand at a compound annual growth rate of 7.4% by 2025. In India, industrial biotechnology holds promise, with about 3% of the global market share. The country has the highest number of FDA-approved manufacturing facilities outside the US, totaling 665 plants. This growth is driven by government support and a skilled workforce, with a focus on advancements in bioenergy, bio-based materials, and healthcare. Recent years have witnessed a surge in international demand for Indian vaccines and biopharmaceuticals, positioning the country as a leading hub for contract manufacturing and clinical trials. The country's bioeconomy, valued at $150 billion by 2023, is forecasted to double to $300 billion by 2030. This growth is supported by the government's BIRAC scheme, which has established 60 successful bio-incubation centers, further promoting innovation and entrepreneurship. India's bioeconomy basically consists of four segments: BioIndustrial ($72.6 billion, 48.09%), BioAgri ($12.44 billion, 8.24%), BioPharma ($53.8 billion, 35.65%), and BioServices ($12.1 billion, 8.02%), with biotech start-ups reaching 8,531 in 2023. This comprehensive review highlights the significant potential of industrial biotechnology in India by focusing on technological advancements, policy impacts, and market trends. It provides an overview of the current landscape, challenges, and future opportunities, and offers insights to guide strategic initiatives aimed at advancing the sector.