Question 12. What is Contract Manufacturing?

A contract manufacturer (CM) is a manufacturer that contracts with a firm for components or products.

It is a form of outsourcing and is beneficial to all companies involved; each company can focus on their core competencies.  This allows our customers to focus their efforts on the design, marketing, sales and other essential business aspects rather than bearing the burden of running a manufacturing facility.

Some of the benefits of contract manufacturing are:

  • Cost Savings - Companies save on their cost of capital because they do not have to pay for a facility and the equipment needed for production.  They can also save on labour costs such as wages and training, there are no production wages to pay during quiet periods.
  • Advanced Skills - Companies can take advantage of skills they may not possess, but the contract manufacturer does.  The main focus of Triode Group is electronic assembly, we are continuously improving our production methods to make gains in quality and efficiency.
  • Cash flow - with an approved credit application customers can enjoy up to 50 days to pay after receiving goods.
  • Economies of Scale - We have multiple customers which we produce for and are making purchases for components and circuit boards multiple times a week, because of this we can offer reduced rates in acquiring raw materials and reduced shipping costs.