Explanation of Manufacturing / What is Manufacturing ?
Manufacturing is the term which is used when there is a processing of raw materials or parts into finished goods through tools, human labor, machinery, and chemical processing.
Large-scale manufacturing allows for mass production using assembly line processes and advanced technologies as core assets.
Efficient manufacturing techniques enable manufacturers to utilize economies of scale, production of more units at a lower cost.
Manufacturing is a value-adding process which allows businesses to a sell finished products at a very higher cost over that are value of the raw materials that are used.
It is also often reported on by the conference board and have being well examined by economists.
Historically, humans have sought to turn raw materials, such as wood, ore and foodstuffs, into finished products like furniture, metal goods and processed foods.
By processing and refining this raw material into something more useful, individuals and businesses could have added value.
This added value can be increased with the price of finished products by rendering manufacturing a profitable endeavor.
People began specializing their skills which is required for manufacturing goods, while others provided funds to businesses for purchasing tools and materials.
How products are manufactured have changed over time ?.
The amount and type of labor which is required in manufacturing may vary according to the type of product that have being produced. On one end of the spectrum, humans can manufacture products by hand or through various basic tools which would take more traditional processes.
This type of manufacturing can be associated with textile production, decorative art, leatherwork, carpentry, and some kind of a metalwork.
At another end of the spectrum, manufacturers may use mechanization for producing items on a more industrial scale. This type of manufacturing doesn’t require as much manual manipulation, and it is often associated with some mass production.
History of Modern Manufacturing
The industrial process have used to turn raw materials into products in high volumes which was emerged during Industrial Revolution of the 19th century.
Before this period, handmade products were dominating the market. The development of steam engines and similar technologies were allowed companies the use machines in the manufacturing process. It reduced the number of a workers that are required to produce goods while also increasing the volume of goods produced.
Mass production and assembly line manufacturing have allowed companies for creating parts that could be used interchangeably and have allowed finished products for making it more ready by reducing the need for the part customization.
The Ford Motor Company have introduced and popularized the use of mass-production techniques for manufacturing process in the early 20th century. Computers and other precision electronic equipment have allowed since all companies to pioneer high-tech methods of manufacturing.
Products which were made by using these methods typically have a higher price but require more of specialized labor and a higher capital investment. The skills that are required to operate machines and develop the processes used in manufacturing have changed drastically over time.
Many low-skill manufacturing jobs have moved from developed to developing countries because labor in developing countries have tends to be less expensive. More skilled manufacturing, high-end product with particular precision are tend to be undertaken by developed economies.
Technology have resulted in making manufacturing more efficient and employees more productive. Therefore, although the capacity and number of goods manufactured can be increased and the number of workers required have declined.
Measuring the main Role Manufacturing Plays in the Economy. As the Economists and government statisticians use various ratios when evaluating the role manufacturing plays in the economy. Manufacturing value added (MVA), for example, it can be an indicator that is comparing the manufacturing of output to the size of a overall economy. It can also be indicated as a percentage of gross domestic product (GDP).
The Institute for a Supply Management (ISM) uses the method of surveys of manufacturing firms for estimating employment, inventories, and several other new orders.
Each month the ISM releases the ISM Manufacturing Report, which has summarized its findings.
Eagerly, financial analysts and researchers wait for this report as they had seen it as a potential early indicator of the economy’s health and where the stock market might be beheaded.
KEY TAKEAWAYS FROM PART 1: MANUFACTURING
Manufacturing is the method of turning raw materials or parts into finished goods through various tools, a certain amount of human labor, machinery, and various chemical processing.
Before the Industrial Revolution, most products were made by hand by using human labor and basic tools.
In the 19th century, The Industrial revolution have brought the advent of mass production, assembly line manufacturing, and mechanization for manufacturing larger quantities of goods at a lower cost.
Financial analysts also study the report of ISM Manufacturing every month as a potential early indicator of the economy’s health and where the stock market might be beheaded.
Part 2: Manufacturing Production
Explaining Manufacturing Production
Manufacturing production is referred to the methodology of how to efficiently manufacture and produce goods for sale, far away from just a bill of materials.
Three similar types of manufacturing production processes are: make to assemble (MTA), make to stock (MTS), and make to order (MTO).
Such strategies may have various advantages and disadvantages in labor costs, inventory control, overhead, customization, and the speed of production and filling orders.
Understanding Manufacturing Production
Manufacturing is considered as the creation and assembly of components and even finished products for sale on a large scale. It can utilize several methods, including human and machine labor, and biological and chemical processes, to turn raw materials into finished goods using tools.
Production is similar to manufacturing, but it is broader in scope. It also refers to the processes and techniques which are used for converting raw materials or a semi-finished goods into a finished products or a services with or without the usage of machinery.
Whether it is one or another, manufacturers need to meet their production methods to the needs and various desires of the market, the available resources, other order volume and size, various seasonal shifts in a demand, with the overhead costs such as labor cost and inventory cost, and numerous other variables.
Types of Manufacturing Production
Make to Order (MTO)
The make-to-order (MTO) is the strategy which is also known as “built to order” allows customers to order those products that are built according to their specifications, which is especially useful with heavily customized products.
Examples of make-to-order products include computers, heavy equipment, automobiles and other big-ticket items.
Companies can reduce inventory problems with MTO, but the customers waiting time is can be significantly longer. This demand-based strategy can’t be used with all product types.
Make to Stock (MTS)
The MTS (make-to-stock) strategy is a traditional production strategy that have being based on demand forecasts.
It can be utilized in the method best way when there is a demand which is predictable for a product, such as for toys and apparel at the time of Christmas.
MTS can be problematic when demand have being difficult to predict, however. When used with a business or product with an unpredictable business cycle, MTS can lead to too much inventory, a dent in profits, or too little inventory and a missed opportunity.
Make to Assemble
The MTA (make-to-assemble) strategy is a type of hybrid of MTS and MTO in that companies with a stock basic parts based on demand predictions but do not assemble them until customers place their orders.
The benefit of such a type of strategy is that it allows fast customization of products based on customer demand.
A proper example that can be taken is the restaurant industry, which prepares several raw materials in advance and then waits for a customer to order and start assembly.
One downside to MTA allows the company may receive too many orders to handle given the labor and components it has on hand.
Some Special Considerations from Part 2: Manufacturing Production
The JIT (just-in-time) inventory system is an example of a strategy that is focusing on one component of manufacturing of production—inventory management.
The system can benefits companies because it allows them to decrease waste and inventory costs by only receiving goods used in production when needed.
Companies that are employing under the JIT inventory system will do not store a large inventories as of parts and a raw materials needed to produce their goods.
Instead, these items can be arrived at the production facility in smaller quantities as it is needed completing production.
For making the JIT strategy work, efficient scheduling is of the essence for ensuring production that is not have been delayed because of the lack of materials.
Electronic inventory systems also helps managers monitor inventory and even respond quickly when production materials are getting too low.
KEY TAKEAWAYS FROM PART 2: MANUFACTURING PRODUCTION
Manufacturing production is referred to the strategies companies using for manufacturing and production of goods for sale.
Many variables can impact manufacturing production, such as the availability of raw materials, demand of marketplace, labor costs, and inventory costs.
A company that is using the strategy of make-to-stock (MTS) matches the level of a goods it keeps in a inventory with the anticipated consumer demand.
A company that uses the modle of make-to-order (MTO) strategy produces a product only after have been receiving as a confirmed customer order.
A company that have been uses the make-to-assemble (MTA) strategy stocks all the basic parts needed for production but does not assemble them until a customer places an order.
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