The phrase denotes companies specializing in manufacturing companies, usually situated inside a commutable or logistically advantageous distance from the shopper’s major location. These producers function beneath contract, producing items or elements as specified by the contracting firm. This association permits companies to outsource their manufacturing wants with out important capital funding in tools or amenities.
Partaking a neighborhood supply for manufacturing supplies quite a few benefits, together with diminished transport prices and lead occasions, enhanced communication because of proximity, and the potential for nearer collaboration all through the manufacturing course of. Traditionally, corporations sought geographically proximate manufacturing companions to make sure high quality management and responsiveness, a apply that continues to be related in right this moment’s globalized financial system.