The phrase denotes companies specializing in manufacturing companies, typically positioned inside a commutable or logistically advantageous distance from the consumer’s major location. These producers function beneath contract, producing items or parts as specified by the contracting firm. This association permits companies to outsource their manufacturing wants with out vital capital funding in gear or amenities.
Partaking a neighborhood supply for manufacturing offers quite a few benefits, together with diminished delivery prices and lead occasions, enhanced communication resulting from 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 observe that continues to be related in in the present day’s globalized financial system.