Manufacturing is used to define any industry that makes products from raw materials with the use of manual labor or machinery and this is usually carried out systematically with a division of labor.
What is Manufacturing?
Manufacturing is the fabrication or assembly of components into finished products on a fairly large scale. Examples of manufacturing industries are industries that produce aircraft automobiles, chemicals, clothing, computers, consumer electronics, electrical equipment, furniture, heavy machinery, refined petroleum products, ships, steel, tools, as well as dies.
Understanding Manufacturing – Manufacturing Industry
Several industries have refined and processed raw materials into something more useful, and this has added value to the economy. This value-added has increased the price of finished products which has made manufacturing a profitable venture. Lots of people have specialized in the skills needed to manufacture goods, while others offer funds to businesses to purchase tools and materials.
The way products are manufactured has changed over the years and the type and amount of labor needed in manufacturing differ and depend on the type of product being produced. On the other hand, humans manufacture products by hand or via the use of basic tools with the aid of more traditional processes.
This type of manufacturing is linked with decorative art, textile production, leatherwork, carpentry, and metalwork. Manufacturers’s on their end, use mechanisms to produce items on a more industrial scale. This kind of manufacturing does not need as much manual manipulation of material and is often linked with mass production.
Types of Manufacturing Processes
Manufacturing is a starlight forward business, where the owner buys the raw material needed or parts to manufacture a finished product. To function as a business, the manufacturer desires to cover costs, meet demand, and make a product to supply to the market.
Make-To-Stock (MTS) – Here, a factory produces goods to stock stores and showrooms. They do this, by predicting the market for their goods, which helps the manufacturer plan production activity in advance. If they produce too much, they may have to sell the surplus quantity at a loss and if they produce too little may miss the market, and not sell enough to recoup the costs.
Make-To-Order (MTO) – Here, the producer waits for orders before they go into manufacturing stock. Inventory is easier to control and the owner does not need to rely so much on the market demand. But note that here, the customer waiting time is longer even though the manufacturer needs a constant stream of orders to keep the factory in production.
Make-To-Assemble (MTA) – Here, the factory produces parts in readiness of orders for assembly. By doing this, the manufacturer is ready to fulfill customer orders but if orders do not materialize, then the producer will have a stock of unwanted parts.
These three categories make up the manufacturing chain which manufacturers can choose from to fulfill customers’ demands depending on their organizational structure.