Manufacturing: Definition, Types & Facts

Manufacturing means converting raw materials into finished products using various tools, equipment, and machines. Finished products are used to meet the needs of consumers or other enterprises. From its creation until now, production in the form of factories, enterprises, individual production lines, and private businesses has been a key factor in the development of the economy.

Industrial manufacturing, cutting steel – illustrative photo. Image credit: Clayton Cardinalli via Unsplash, free license

Manufacturing is the process of creating goods or products using machines, tools, and labor. It involves transforming raw materials into finished products, usually in a factory or industrial setting. The manufacturing aims to efficiently produce goods that meet the quality standards required by customers while maximizing profit for the manufacturer. Various methods and technologies are used in this processб such as automation, robotics, information technologies, etc., which increase efficiency and product quality.

Recently, the manufacturing industry has constantly been changing thanks to implementing technologies that reduce costs, improve product quality, and generally increase business efficiency. This process began with the construction of the first production plant in the USA, and it was Francis Casey’s factory in Beverly. This factory was founded in 1793 and produced cotton fabrics using mechanical pressing, and this solution was quite revolutionary for its time.

In the 18th century, the industrial revolution began, which was accompanied by outstanding technological achievements:

• Inventions of the steam engine;
• Expanding the use of steel;
• Mechanization of production.

It opened the way to mass production at high speed and changed people’s way of life, economy, and culture.

In the modern world, manufacturing continues to develop and change; in connection with this, new production technologies, production robotization, and the use of AI in the production process appear. Almost all industries are developing at a rapid pace, but this process is especially noticeable in the following areas:

• Computers, mobile devices, software;
• Medicines, food, and other products based on biotechnology;
• Generating energy from renewable sources such as solar and wind energy;
• Robotics.

According to forecasts, the global production volume will grow, especially in countries with developed economies. It can contribute to increased global competition and lower prices for most goods. At the same time, experts predict a decrease in demand and, therefore, supply of goods that harm the environment.

Depending on the volume of production and the characteristics of its sales, we can distinguish several main types of production in order:

• Factories and businesses use flexible equipment to offer products to consumers in small quantities, depending on demand or individual order volumes.
• Series production is based on forecasted demand, one of the most effective approaches, as costs and risks are reduced, and the efficiency of the enterprise is increased.
• Mass production involves the production of numerous standardized products using assembly line technology, and this approach is acceptable for automotive and electronic production.
• Continuous manufacturing involves the production of large quantities of products using an ongoing flow process. It is often used in the chemical, pharmaceutical, and food industries.

At the same time, goods produced by a factory, plant, or any other enterprise can be both finished products and individual elements that other enterprises need for their work. So, in this context, we have to talk about three primary schemes:

• Make-to-Stock — products are manufactured in advance, directly for sale, and stored in the warehouse in anticipation of demand. Make-to-Order — products are manufactured after receiving an order from the client; that is, production begins only after receiving the order.
• Assemble-to-Order — a certain number of components are kept in stock, and products are manufactured only after receiving an order from the customer. Still, the details are assembled according to pre-established rules.

For production to be efficient, it is planned based on the prediction of future demand for products or services. Companies consider social, economic, and political trends. Also, manufacturers consider the placement of equipment, work schedules, speed, and automation.

Enterprises also manage stocks of raw materials and finished products.

Real-time resource and inventory management help entrepreneurs prioritize tasks for each production line and plan each manufacturing step for feasibility and efficiency. It also helps to approach pricing more accurately and fairly.

The use of modern approaches, technologies, and automation capabilities significantly simplifies both the planning process and all subsequent stages of the enterprise. It does not lead to an increase in the product’s price or a decrease in quality but allows for efficient allocation of time, resources, and technical capacities. Thanks to this, modern factories get better results and higher competitiveness at the same or even lower costs.