What Is A Manufacturing Business (Explained: All You Need To Know)

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What Is A Manufacturing Business

A manufacturing business is a type of business in which a company produces goods by converting raw materials, parts, and components.

The goods that are produced by manufacturing businesses are sold to other manufacturers, wholesalers, distributors, retailers, or end customers.

For example, a toy manufacturer is a company that produces toys by taking raw materials to create the toys.

Typically, for manufacturing businesses to produce goods on a large scale, they will use technology, sophisticated machines, robots, and automated processes.

The products are assembled through the interaction of humans and machines generally using an assembly line.

Manufacturing Business Definition

A manufacturing business is any business that uses raw materials, parts, and components to produce finished goods.

The manufacturing company can sell the finished goods to other manufacturing businesses, sell them to other companies who will sell the goods to end customers, or it can sell directly to end customers.

Manufacturing businesses typically use technology, computers, robots, and humans to produce goods large-scale.

A manufacturing business can be very simple where they assemble a few components to produce goods or it could be highly complex involving highly complex production processes.

Manufacturing Nature of Business

A manufacturing company’s nature of business is to “create” or “manufacture” the end product.

In addition to manufacturing businesses, there are other types of businesses such as service businesses and merchandising businesses.

A service business is a type of business that provides its clients with intangible products, such as advice, expertise, and knowledge.

A merchandising business is a type of business that buys products wholesale and sells them at retail price.

A manufacturing business, service business, or merchandising business may need to purchase goods produced by a manufacturing business allowing them to achieve their business objectives.

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Types of Manufacturing Production

Manufacturing businesses generally use three main types of production approaches: make-to-stock, make-to-order, and make-to-assemble.

Make-to-stock (MTS) is a manufacturing production approach where the manufacturer considers past sales data to determine how much it should produce going forward.

Make-to-order (MTO) is a manufacturing production strategy where the goods are produced after the customer places an order and it is based on the customer’s product specifications.

Make-to-assemble (MTA) is a manufacturing production approach is a type of approach where the manufacturing company forecasts demand for its products to plan its manufacturing activities but will only start assembling the product when a customer order is received.

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Types of Manufacturing Process

There are four main types of manufacturing processes: casting and molding, machining, joining, and shearing and forming.

Casting and molding is a type of process where you typically start with a liquid and you end up with a solid product.

Machining is generally used to produce metal products during the production process where you need machines to help you produce the parts.

Joining is a manufacturing process where you are welding or binding materials together.

Sharing and forming is a manufacturing process where you are cutting material into different pieces..

Manufacturing Business Examples

Let’s look at a few examples of manufacturing businesses to better understand this type of business.

Example 1

Cars are generally produced by manufacturers.

To produce automobiles on a large scale, you need highly sophisticated machines, robots, computers, and humans to interact with one another on an assembly line to produce the cars to meet customer specifications.

Example 2

Another example of a manufacturing business is a company that produces pharmaceutical products.

A pharmaceutical company will need to use complicated processes to produce the medication, tablets, or medical products used by individuals and hospitals to treat different types of ailments. 

Example 3

There are manufacturing companies that produce frozen food like frozen pizzas.

To produce frozen pizzas, a manufacturing company will need to use an assembly line to produce all the required frozen pizzas that will ultimately be sold by end customers by the manufacturing company directly or through retailers.

Takeaways 

So there you have it folks!

What is a manufacturing business?

Many of the products you use in your daily life have been manufactured, starting from your smartphone, home appliances, shoes, cars, computers, and you name it.

A “manufacturing business” is a type of business that uses components, parts, and raw materials to create finished products.

Manufacturing companies often use assembly lines to mass-produce their goods where materials are assembled, put together, combined, or otherwise manipulated during the production cycle.

The main objective of a manufacturing business is to create, fabricate, or produce goods.

Now that you know what a manufacturing business means and what it’s all about, good luck with your research!

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