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A contract manufacturer is a firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly, and packaging, and works under contract for end users. Benefits of using contract manufacturing: Access to advanced manufacturing technologies Faster product time-to-market Customization of goods in regional markets Lower total costs resulting from economies of scale
Who handles activities between the company and contract manufacturers? Yes, SCM!
Postponement is the process of delaying product customization until the product is closer to the customer at the end of the supply chain. Example: T-shirt shops stock up on generic color tshirts then print custom logos when an order is in. Reverse logistics refers to managing the flow of finished goods, materials, or components that may be unusable or discarded through the supply chain from customers for reuse, resale, or disposal.
Postponement opportunities
VMI is where the vendor (e.g. a consumer goods manufacturer) monitors and manages the inventory for the customer (e.g. a grocery store). Chevron monitors gasoline levels then delivers fuels to gas stationsautomatically. Pepsi comes into Ralphs to restock Vendors love to do more for customers through VMI.
Who is responsible for making sure all products face front and store is fully stocked?