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understanding contract versus tool Manufacturing in int group setup welcome all today I am discussing the distinction between contract and toll Manufacturing in the complex ecosystem of global businesses companies separate manufacturing from functions like RD and distribution this separation necessitate a strategic approach to Intergroup Arrangements well what is contract manufacturing then contract manufacturing is where the principle outsources production to another entity within the group this entity not only manufactures the product but also sources the raw material bearing the risk related to cost quality and Supply then what is toll manufacturing tool manufacturing simplifies this model here the principle supplies the raw material and manufacturer focuses solely on production this approach minimizes the manufacturer risk keeping raw material procurement and intellectual property firmly in the principal hands key distinction between track manufacturing and toll manufacturing the
