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Contract manufacturing and toll manufacturing are business strategies used by companies of all sizes. They allow businesses to leverage external facilities for production instead of manufacturing everything in-house. Contract manufacturing involves a company forming a contract with a manufacturer to produce specific products over a designated timeframe. This method is often employed as a part of the core business model or as a transitional step to in-house production. It is also known as private manufacturing or white-label manufacturing. On the other hand, toll manufacturing typically refers to a process where a company provides raw materials that are processed by another manufacturer, who charges a fee for the service. Each method presents different advantages in achieving manufacturing success.
