Importance of contract manufacturing and challenges faced by manufacturing companies
The authors of the report have studied the practice of contract manufacturing in Russia and abroad, done a comparative analysis of Russian contract manufacturers (CMs), and compiled a ranking of these based on a specially developed methodology. The research is of particular relevance because of the necessity of updating the models of manufacturing process management in Russian companies in the current context.
Today, industrial companies are faced with a number of challenges such as shortening product life cycle, growing importance of the service component of their business, the need to optimize production processes, etc. One way to help solve these issues and raise competitiveness is to introduce a new model of manufacturing process management based on decentralization of production and narrowing the specialization of contract manufacturers, which entails creating a multi-level distributed supply chain.
Contract manufacturing in Russia and abroad
The authors have studied the experience of selected Russian and foreign CMs and done a detailed analysis of CM business models which are based on multi-industry specialization, diversification of customer portfolio, high product quality, just-in-time manufacturing, and using cutting-edge production technologies and equipment.
It must be mentioned that the study included a survey of Russian CMs operating in the manufacturing and engineering sectors. The results of the survey are given in the report with a breakdown by the respondents’ location (federal districts of Russia), scope of activities, market presence, sectoral specialization, and range of services provided.
The results show that the majority of the CMs surveyed as part of this study operate in multiple industry sectors (three to five, on average), with the largest number of companies found in machine building, electronics, and medicine. The most common service provided by CMs (80% of total volume) is pilot production.
The study of foreign experience with contract manufacturing involved case studies of a number of leading foreign CMs, such as GlobalFoundries, Foxconn, and VDL Enabling Technologies Group (VDL ETG; a leading European CM which operates a high-technology business based on supreme competences and technological integration with its clients).
Russian CM ranking
A unique feature of the study is the specially developed methodology for rating Russian contract manufacturers. The methodology is based on both quantitative and qualitative indicators and includes a formula for calculating an integrated index for the ranking. Using the methodology, the authors have compiled a ranking of Russian CMs which features JABIL RUSSIA, TPV CIS, and Nanotechnology Center of Composites (NCC) as the leaders.
A separate section of the report is devoted to profiles of the ranked companies.
This publication has been posted in the Roscongress Information and Analytical System on the recommendation of the Roscongress Foundation expert community.
The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of nationwide and international conventions; exhibitions; and business, public, youth, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.
The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, helps foster social entrepreneurship and charitable initiatives.
Each year, the Foundation’s events draw participants from 208 countries and territories, with more than 15,000 media representatives working on-site at Roscongress’ various venues. The Foundation benefits from analytical and professional expertise provided by 5,000 people working in Russia and abroad.
The Foundation works alongside various UN departments and other international organizations, and is building multi-format cooperation with 180 economic partners, including industrialists’ and entrepreneurs’ unions, financial, trade, and business associations from 81 countries worldwide, and 186 Russian public organizations, federal and legislative agencies, and federal subjects.
The Roscongress Foundation has Telegram channels in Russian t.me/Roscongress, English – t.me/RoscongressDirect, Spanish – t.me/RoscongressEsp and Arabic t.me/RosCongressArabic. Official website and Information and Analytical System of the Roscongress Foundation:roscongress.org.