HOW DID CONTRACT MANUFACTURING EMERGE?

HOW DID CONTRACT MANUFACTURING EMERGE?

Contract manufacturing emerged as a result of large companies preferring not to engage in small-scale manufacturing tasks. As contract manufacturing became more common, small businesses started earning more revenue, and new small enterprises were established in various sectors to specialize in outsourced production.

Contract Manufacturing in Turkey

In Turkey, the textile and apparel industry pioneered contract manufacturing.

• 1980s: Turkish companies seeking business opportunities began signing contract manufacturing agreements with global brands.
• This led to rapid growth in the textile and apparel sector, and exports from Turkey increased significantly during this period.

How Contract Manufacturing Facilitates Growth

Today, leading European companies are preparing to invest in Turkey, where labor costs are relatively low.

• Key Attraction: Contract manufacturing is a key factor attracting European investors, particularly those planning to expand their investments in the machinery industry.
• Operational Efficiency: By outsourcing production to countries with lower labor costs, companies can scale their operations more efficiently while focusing on their core business functions.

Contract manufacturing continues to be an essential business strategy for cost reduction, efficiency, and competitive advantage in both domestic and international markets.