Outsourcing manufacturing in Bakery Industry

Maximum number of Bakery product manufacturers are outsourcing their manufacturing activity .It make sense also with overhead cost spiralling up outsourcing becomes the most obvious route . The Big 3 ( PARLE , BRITANNIA , ITC ) all have outsourced their most of manufacturing to contract manufacturers . Contract manufacturers are paid for conversion of raw material into finished product . Contract manufacturers liabilities are labour , legal , land ,maintenance ,utilities and other local laws .This allows these Major players to focus on marketing , brand development , R&D activities . Contract Manufacturers also have business to run OR to run plants full time and can build own brand . This is also termed as Third party manufacturing or private label . This helped number of factory owners to generate business , give employment to large number of people . This concepts has also caught attention of entrepreneurs who outsources bakery product with there own recipes , brand and packaging . Entrepreneurs or businessmen from developed economies outsource products from low cost countries label it and then sell them in their own market .In process make good profit . For countries where bakery manufacturing is not so much developed ,people outsource these products from manufacturers ,these could be classic example of trading

Major disadvantage of outsourcing  is  loosing grip over quality  as outsourced  manufacturer might be lax  on quality issues .

 . So if you have money contact these manufacturer,negotiate your price for your type of recipe , packaging and sell .