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Manufacturing Agreement (Drafting)

Manufacturing Agreement is a document between 2 parties called Supplier and a Buyer. The Supplier can be an individual or business and is the party that "supplies," or provides or manufactures the goods to the Buyer. The Buyer can also be an individual or a business. The Buyer is the party that makes the order for the goods. The goods in a Manufacturing Agreement are different from those carried in a store; they are made on Buyer's specifications.  Within these agreements, the Supplier and the Buyer decide upon their general expectations for the manufacture and sale of the goods and the relationship between them. This Manufacturing Agreement can be used for a Buyer that wishes to make a one-time as well as for those who wish to make one initial order.

The goods in a Manufacturing Agreement are different from those carried in a store, they are made on Buyer's specifications.  Within these agreements, the Supplier and the Buyer decide upon their general expectations for the manufacture and sale of the goods and the relationship between them. This Manufacturing Agreement can be used for a Buyer that wishes to make a one-time as well as for those who wish to make one initial order and then to start of multiple orders with the same Supplier. Manufacturing Agreement should be confused with an “agreement to sell” or “distributor’s agreement”. Companies save on their capital costs because they do not have to pay for a facility and the equipment needed for production. They can also save on labor costs such as wages, training, and benefits.

 

Features of Manufacturing Agreement:

 

1.COST SAVINGS: Companies save on their capital costs because they do not have to pay for a facility and the equipment needed for production. They can also save on labor costs such as wages, training, and benefits.

 

2.MUTUAL BENEFIT TO CONTRACT SITE: A contract between the manufacturer and the company it is producing for, may last for long years. The manufacturer will know that it will have a steady flow of supply to carry out its business at least until that contract expires.

 

3.ADVANCED SKILLS: Companies can utilize some skills that they may not have, but the contract manufacturers do. The contract manufacturer is likely to have set some methods to conduct business efficiently with raw material suppliers

 

4.QUALITY: Contract Manufacturers are likely to have their own methods for checking the quality, called “quality control” in place that help them to detect fake or damaged materials.

 

5.COMPETENCE: Companies can focus on their core competencies morewhen they take help of a Manufacturing Agreement to hand off base production to an outsider company.

 

6.ECONOMIES OF SCALE: Contract Manufacturers have multiple customers that they produce for. Because they are servicing multiple customers, they can offer concessions in cost for acquiring raw materials by benefiting from economies of scale.

Documents Required


Passport Photo

Passport photo of all parties.


PAN Card

PAN card of all parties.


Aadhar Card

Aadhar card of all parties.


Utility Bill

Utility bill of Electricity or Telephone.


Address Proof

Valid Address Proof of all the parties.


Licence

Valid Driving Licence of all the parties.


Terms and Conditions

Terms and Conditions between the parties.


Other Documents

Other documents will be intimated through e-mail.

FAQ

A Manufacturing Agreement is a document between two parties, a Supplier and a Buyer. The Supplier can be an individual or business and is the party that "supplies," or manufactures, the goods to the Buyer. The Buyer is the party that orders the goods.

For instance, large companies that manufacture computer hardware use contract manufacturing for the smaller computer parts and components that are, in turn, manufactured by other firms.

What Is Contract Manufacturing & Why Is It Important? Contract manufacturing makes product manufacturing possible to companies that lack a full-service, in-house development team. Contract manufacturing involves outsourcing a product's manufacturing process to a trusted manufacturer.

• Machining. • Joining. • Forming. • Casting.

Most manufacturing environments fit into one of five general categories. Repetitive, Discrete, Job Shop, Process (batch), and Process (continuous). Most companies use more than one of these environments to get a single product out the door.