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Contract manufacturing and toll manufacturing are essential business strategies for various companies. They differ in their approach to production. Some businesses manufacture entirely in-house, while others may combine in-house production with purchases of partially processed materials or sub-assemblies. Those who rely on external manufacturers to produce their entire product lines engage in contract manufacturing, where a formal contract is established for a specified quantity of products over a set time. Contract manufacturing is also known as private manufacturing or white label. Essentially, these methods provide businesses flexibility in their manufacturing processes, whether as a transitional phase to in-house production or as part of their core operations.
