Manufacturing

What is Manufacturing?

Manufacturing is the process of making goods by hand or by the machine that upon completion, the business sells to an end customer. Items used in manufacture may be raw materials or parts of a more significant product. The manufacturing regularly happens on a large-scale production line of machine and skilled work.

Types of Manufacturing Processes

Manufacturing is a straightforward business; the owner buys the raw material or parts to manufacture a finalized product. To function as a business, the manufacturer needs to cover costs, meet the needs of the market, and make a product to fulfill the demand.

A factory operates one of three types of manufacturing production:

  • Make-To-Stock (MTS) – A factory produces goods to stock stores and showrooms. By predicting the market for their products, the manufacturer will plan production activity. If they provide too much, they may need to sell surplus at a loss, and in providing too little, they may miss the market and not sell enough to cover costs.
  • Make-To-Order (MTO) – The producer waits for orders before manufacturing stock. Inventory is more comfortable to control, and the owner does not need to rely as much on market demand. Customer waiting time is longer though, and the manufacturer requires a constant stream of orders to keep the factory in production.
  • Make-To-Assemble (MTA) – The factory produces parts in anticipation of orders for assembly. By doing this, the manufacturer is ready to fulfill customer orders, but if orders do not materialize, the producer will have a stock of unwanted parts.
manufacturing
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Manufacturing was last modified: June 19th, 2019 by Mirjana
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