The Characteristics And Advantages Of Contract Machining

The Characteristics And Advantages Of Contract Machining

Many original equipment manufacturing (OEM) firms – large and small, can no longer afford to handle every aspect of their production process. Instead of setting up departments, hiring staff and even constructing facilities to handle a specific aspect of their product manufacturing, they outsource it. The result is a lean manufacturing process with contract machining an offshoot.


When companies contract out machining, they sign with the understanding the machine shop will fulfill certain expectations. Generally, the intent is for a high volume/production machining. Yet, some machine shops can and do adopt the process for smaller outputs. In fact, machining of this type is suitable for any quantity.

As with quantity, what manufacturing concerns presume will vary from machine shop to machine shop. They may contract out for everything from designing and producing a prototype to finishing and assembling parts on site. During this process, machine shops may offer a variety of subtractive and value-added services including:

CNC turning
CNC milling

Contract machining services may utilize vertical or horizontal machine centers.

The Contract Machining Services Advantage

This arrangement with machine shops offers OEMs several advantages. Above all, it allows them to focus on a certain aspect of their business while the machine shop handles other production issues. In doing so, it permits companies to:

Reduce their labor costs since there is no need to hire specialized and other personnel for this production run
Avoid the expense of renting, purchasing and equipping new facilities
Keep factory space at a minimum, therefore reducing overhead costs
Gain access to the latest equipment/technology without the expense
Draw on the skilled specialists without having to hire, train and place them on the company’s own payroll

Overall, when a company outsources services – including arranging for contract machining services, it reduces their overhead without sacrificing product quality.

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