Aerospace contract manufacturing is done by a company that is hired to produce components or products related to the aerospace field. The work of one company is hired out under contract to another. It is a form of outsourcing and the arrangement may also be referred to as subcontracting because both companies are sub, or under, a contract.
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Many companies take part in aerospace contract manufacturing projects such as aerospace contract machining because of reduced production costs through economies of scale. It is also easier to hire an existing aerospace manufacturing facility than it is to build one and hire and train a workforce to build a part. Aerospace contract manufacturers can provide complete turnkey systems. After design engineering the part in accordance with the client's specifications, the manufacturer prepares for production and fabrication. There is no one part, component or service that aerospace contract manufacturers perform because each job they do varies by contract. Some subcontractors may be involved in major structural assembly while others perform the shaping, milling, machining and other finishing processes necessary to prepare the part for another contract manufacturer or for the hiring company. Aircrafts of all kinds such as airplanes, helicopters, unmanned aircraft and military jets can be manufactured using subcontractors; defense and military contract manufacturing is provided by specially approved companies.
Before the manufacturing process even begins, the company interested in hiring a subcontractor requests bids from various contract manufacturers. After reviewing the job estimates from the interested companies, the hiring firm chooses one company and the two businesses discuss the details of the arrangement, including any standards that the final product must meet, pricing and timeframe. While other contract manufacturing services may have a time period of a few years, aerospace manufacturing is usually measured by the output of a predetermined number of units. Aerospace contract manufacturing is beneficial for both the manufacturer and the hiring company. The manufacturing plant is offered the guarantee of steady work and pay for the duration of the contract while the hiring firm saves on costs and time building and training a workforce. Aerospace contract manufacturers share similarities with OEMs, original equipment manufacturers. OEMs produce components, parts or products that are purchased by the hiring firm and sold under that company's identity. The business that actually made the part is not credited or marketed; they receive payment from the company that hired them in keeping with their contract agreements. This is usually the case with aircrafts; the client's name will be displayed on the side of the plane, for example, even though many smaller companies may have contributed parts and labor.
