What Is Manufacturing?

What Is Manufacturing?

By Team TranZact | Published on Mar 17, 2023

Knowing the basics of what is manufacturing helps to evaluate the complexities of manufacturing and also assists with tackling key challenges. Today we're taking an in-depth look at manufacturing and answering key questions surrounding what is manufacturing, its techniques, and more. Read to know more.

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Understanding Manufacturing Business With Example

Manufacturing turns raw materials into finished products, either by hand or machine. Manufacturing businesses may follow different forms, each with its own specific processes. The most popular form is an assembly line, this type of company takes raw materials and turns them into finished products by following a series of activities. Other manufacturing businesses may make products from scratch, like food manufacturers, or recycle materials like paper manufacturers.

One of the manufacturing business examples is an automobile company. They purchase raw materials like steel and glass, then use machines to construct the car. Once completed, it's sold to customers.

Types of Manufacturing

If you're considering starting a manufacturing business, it is first essential to determine what 'manufacturing' involves and the types of manufacturing with examples. Manufacturing businesses come in many forms, and the process can differ drastically between them. Some may specialize in one product, while others create various goods. Furthermore, the type of material being manufactured will influence how it's assembled during production.

Manufacture process planning has changed over time. Goods manufacturing has historically been based on raw materials, wherein the hand-manufacturing process relies on simple tools and techniques. It employs a variety of production processes, such as decorative arts, textiles, construction, leatherwork, and some metalwork.

A handmade product requires a considerable amount of time and labor. Some suppliers and their products may command a high price depending on the supplier. Let's look at this manufacturing example; handcrafted clothing can be more expensive than mass-produced clothing.

The production of items on a much larger scale is achieved using mechanization in larger businesses. In this process, materials are handled automatically without manual labor. While highly skilled individuals may be required to operate machinery and ensure it runs correctly, human capital is not needed for most of the monotonous production activities.

Additive Manufacturing Process

3D printing is a term commonly used to describe this kind of manufacturing. Three-dimensional shapes are created by stacking layers in three dimensions using special tools, such as 3D printers, to create layers. Additive manufacturing primarily involves the process of designing a product by developing one specific layer at a time.

Advanced Manufacturing

Using new technologies, this method enhances the production process with automation functionalities. It emphasizes that companies must add value to their raw materials to better serve their target markets. New technologies also help produce more products and bring them to market more quickly.

Contract Manufacturing

Manufacturing industries are highly dependent on this approach. Business and vendor partnerships allow companies to outsource specific manufacturing processes. For example, when it comes to manufacturing a car, third-party parts may be needed to be procured through contract manufacturing.

Types of Manufacturing Techniques

Before learning about the manufacturing processes, knowing the types of manufacturing techniques is vital. Let's look at the most popular types of manufacturing techniques with an example here:

Make-to-Stock Process

Traditional production methods involve making standard products according to forecasted demand, known as make-to-stock (MTS). Typically, a company estimates the number of units it will sell over a given period, then it plans to manufacture that quantity of products. Before their release and broad distribution, goods are often held as inventory in this case.

When launching a new product, a company should know how many goods it will need to produce in advance. To do so, you will need historical data from similar products, information about macroeconomic conditions, and insight into what customers expect from specific features of products.

MTS offers companies a chance to take advantage of economies of scale. A target manufacturing level allows a firm to plan and build the best manufacturing plans because it can estimate the number of raw materials, labor, or equipment needed. In contrast, failure to meet expectations can result in unused products, excess inventories, and previously committed but underutilized fixed costs.

Make-to-Order Process (MTO)

Manufacturing-to-order fundamentally differs from MTS because it requires direct customer communication to identify their preferences. The manufacturing process usually begins after a contract or letter of intent is signed. Manufacturers typically wait until they receive full product specifications before launching production on light prototypes.

Usually, the MTO method is used when making a product with a specific purpose. In the aerospace and construction industries, it is common for manufacturers to delay manufacturing a product until a government entity or a long-term tenant has agreed to buy an aircraft or to sign a long-term lease agreement.

One advantage of MTO manufacturers is that their products need help finding an outlet in a marketplace, particularly for highly-specified items. Further, MTO manufacturers rarely keep inventory, making goods only if a sale is lined up. Despite its benefits, MTO manufacturing may have uneven product demand, leading to slow periods.

Make-to-Assemble (MTA)

When it comes to make-to-assemble manufacturing, producing parts is usually started as soon as possible to gain a head start on the competition. Following customer orders, companies assemble components that have already been manufactured.

The company can often deliver the goods faster to customers because it has partially completed the manufacturing process. Still, there is a risk that the company will end up with a large inventory of forecasted demand that doesn't materialize.

Types of Manufacturing Processes

A final way to categorize manufacturing is by the methods used to produce it. As a result, each approach has a unique end product. Understanding the different types of manufacturing process carries significant importance in the manufacturing process, so let's look at them in detail:

Discrete Manufacturing

Discrete manufacturing refers to identifying each product individually. Materials are listed in a bill along with the products for which they were used. Assembly line workers follow production schedules and record material usage in discrete manufacturing processes.

Process Manufacturing

Manufacturing processes can be classified into two types. As a first step, batch process manufacturing refers to making a product using a recipe or formula based on a standard. Food and beverage manufacturers use batch processing to create products in specific quantities, for example, pasta sauce, that can be easily replicated.

An alternative is continuous process manufacturing, which involves repeated operations lasting for longer periods to manufacture a product. After this, the manufacturing process is temporarily halted before resuming. Oil and gas companies often use continuous process manufacturing during drilling to obtain natural resources.

Mixed Mode Manufacturing

Some goods may combine discrete production processes with manufacturing processes. It is common for these standardized goods to be transformed into more specific individual packaging once manufactured.

A process manufacturing method is used as part of the initial stage of product development. In contrast, the unique characteristics of the delivery method, including any customizations made by the customer are added in the latter stage.

Job Shop Manufacturing

Manufacturing goods can be carried out using job shop manufacturing, an even more specific manufacturing method. Typically, this process is used when a batch needs to be processed, but it differs from the typical company products. These specialized, customized products often require unique setup and process steps, such as modifying existing equipment to make them more productive.

Repetitive Manufacturing

Often, repetitive manufacturing allows long processes to be broken into smaller ones. Parts sometimes called assembly lines or manufacturing cells, are designed for manufacturing only their particular parts. A dedicated assembly line is established for each unit, followed by a continuous transfer to the next assembly line. Since temporary storage facilities are rarely used, all work is often done on manufacturing lines.

What Is Manufacturing Software?

The manufacturing software automates materials planning, production tracking and scheduling, and product lifecycle management, allowing manufacturers to plan, implement, and track projects from start to finish. Thereby, manufacturing software is a computer program that helps manufacturers automate their core operations to transform raw materials into finished goods.

By automating specific tasks and managing data efficiently, the software makes it simpler for firms to control costs, enhance quality control, and boost efficiency levels.

The advantages of manufacturing software are numerous. Aside from cutting costs and increasing efficiency, the system also facilitates communication between different departments within a company. Manufacturers can make better-informed decisions about production schedules and inventory levels by providing real-time data. When selecting the best manufacturing and inventory software for your business, ensure it integrates seamlessly with your existing systems and processes and is able to meet the unique requirements of your business.

What Are the Types of Manufacturing Software?

The three primary types of manufacturing software are enterprise resource planning (ERP), manufacturing execution systems (MES), and computer-aided design and manufacturing (CAD/CAM).

An ERP software unifies all facets of a company's operations, from sales and accounting to production, customer service, and inventory management. MES software facilitates the management of production operations, such as scheduling work orders, monitoring progress, and assuring quality assurance. CAD/CAM software is employed to design products and generate digital models that can be utilized during the manufacturing process.

A Brief History of Manufacturing

Early manufacturing tools were used to grind food, dye and weave textiles, ferment and distill liquor, and refine and ferment wines. Screws, pulleys, and levers-the building blocks of the first machines-were invented by the Ancient Greeks and Romans as the next development phase. In those days, skilled artisans were in charge of performing work and formed guilds to protect their craft and privileges.

The first industrial revolution began at the end of the 18th century when the factory system was introduced in Britain, allowing textile production to move away from handwork to machines powered by steam engines.

About a century later, railroads, telegraphs, and electricity emerged, sparking the next industrial revolution. Incandescent light bulbs and automobiles were notable inventions during this time. The first instance of revolutionized mass production was when the Ford Motor Company assembly line utilized specialized machinery and fixtures in the early 20th century.

Transistors, invented in 1947, facilitated the advancement of transportation and communication solutions through digital computers. As a result, the third industrial revolution was enabled by technologies such as wireless communications.

In the 1930s, Toyota developed lean manufacturing which gained popularity after Japanese cars dominated the market in the 1970s. A central aim of this production method was to reduce the time it took to process orders, the amount of inventory within the factory, and the time it took for suppliers to respond.

Our world is currently experiencing the fourth industrial revolution, or Industry 4.0, where traditional manufacturing is being automated by intelligent manufacturing technology. This process is facilitated by various technologies, such as cloud computing, the Internet of Things (IoT), machine learning, artificial intelligence, robotics, and natural language processing.

A fundamental principle of Industry 4.0 is decentralized decision-making enabled by real-time analytics and data and tools in workers' hands. Ultimately, this leads to businesses around the world exploring advanced automation software to scale and become competitive.

Measuring Manufacturing in the Economy

Manufacturing is a crucial sector of the economy responsible for creating goods and services. It's an intricate process that involves turning raw materials into finished items. Measurement of manufacturing activity in the economy relies mainly on data from surveys of manufacturing firms. These surveys provide insight into output, employment levels, capital expenditure, and other indicators associated with economic activity.

Another approach is to utilize economic modeling to estimate the contribution of manufacturing to the gross domestic product (GDP). This method has the advantage of considering indirect effects caused by manufacturing activity, such as its influence on other sectors of the economy.

The third approach uses data from national accounts, such as GDP figures. This provides a comprehensive view of the economy but may need help differentiating manufacturing activity from other economic activities.

Manufacturing Processes

Seven steps are involved in producing a tangible good, including the stages before and after manufacture.

Step 1: Construct an Idea

Manufacturing begins with developing a product vision and concept before making tangible goods. Using this product vision, we explain what our product does, who it is designed for, and why we need it. The answers to these types of questions may assist in defining the goods and refining their characteristics.

Step 2: Conduct a Market Research Study

Even though most people believe manufacturing is just the physical activity of making a good, the manufacturing process still involves research to find ways to improve it. A good's differentiation from its competitors is determined by determining the raw materials that can be used, the required equipment, and the conditions under which the good can be made.

Step 3: Come Up With a Design

The product can be designed now that the research considerations are in hand. Considering the customer's needs and requirements is always the best approach. During the research phase, any manufacturing limitations should also be considered.

You will also need to know the costs associated with this product design to forecast how profitable the product will be. Research and development are most deeply embedded in the manufacturing process during this stage.

Step 4: Create a Prototype and Finalize the Design

After completing the design stage, the final decision about the product needs to be made. In this process, raw materials are selected, and manufacturing processes are defined. Creating an initial prototype is necessary for implementing these decisions. In other words, developing a smaller-scale test product that resembles the final product in manufacturing is required.

Step 5: Testing Prototypes

Having completed the prototype, the next step is to test it. To determine how much the product will cost and its profit margin, it is necessary to evaluate the actual resources that were put into the product. Additionally, it involves finding inefficiencies or weaknesses in the manufacturing process. In this stage, significant changes can be made without affecting the manufacturing process or product significantly; even though adjustments can be made in the future, this is the time for key changes without significant consequences.

Step 6: Produce Your Product

Now that adequate time and effort have been spent on testing, researching, and making the good; it's time to align all production activities to create the product as per the required demand. As part of acquiring machinery and equipment, the company manufactures the goods at full scale. Furthermore, the company spends entirely on labor, storage, insurance, and other aspects of manufacturing.

It is common for companies to choose to constantly enhance their processes during actual manufacturing rather than returning to prototyping.

Step 7: Keep Track of What's Happening

Continually evaluating the process and assessing whether expectations are being met is necessary for the company to improve constantly. The company must analyze the price of the good compared to the cost of producing it. It is also vital for the company to evaluate consumer preference and scale up (or scale down) its product based on that information.

Keeping Your Manufacturing Processes Organized

Organizing your manufacturing process can seem daunting, but sophisticated manufacturing ERP software can help. With TranZact, you can track progress on projects, conduct production planning and testing, and manage inventory levels all in one place - enabling you to optimize efficiency throughout the production cycle and save precious business time.

FAQs on Manufacturing

1. What is the definition of manufacturing?

A manufacturing process involves developing goods by hand or a machine that will be sold to customers. During the manufacturing process, automated machines, skilled workers, raw materials, equipment, and other components are brought together to develop, test, package, and ship finished goods.

2. What is simple manufacturing?

A simple manufacturing module covers a primary production plan, material requirements planning system, and inventory module to facilitate the transformation of raw materials to finished goods.

3. What is the function of manufacturing?

The primary function of manufacturing is to produce goods that meet customer demand, specifications, and quality requirements effortlessly. This is enabled through production planning, procurement, design, quality control, packaging, and shipping.

4. What is the manufacturing system?

An organization's manufacturing system consists of a combined effort by humans, machines, and equipment bound by a flow of information and materials. A manufacturing system requires raw materials and energy as input materials.

5. What is the full manufacturing cost?

Materials, direct labor, and factory overheads comprise the total manufacturing cost. Expenses associated with sales, research, development, and general administration are not included in the calculation of Full Manufacturing Cost.

6. What is product manufacturing?

In product manufacturing, finished products are created and assembled on a large scale for sale. Using tools, raw materials can be transformed into finished goods using human and machine labor, and related manufacturing processes.

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