Manufacturing

First of all we should understand what do we mean by manufacturing, Manufacturing is a process by which raw material convert on finished goods on large scale. Common definition of manufacturing is the production of goods through the use of manpower, material, machinery, tools and biological or chemical processing or formulation. Manufacturing can also mean transforming raw materials into finished goods on a large scale, or the creation of more complex items by selling basic goods to manufacturers for the production of items such as automobiles, aircraft, or household appliances. For an example Bearings is manufactured in an industry which sell to an automobile industry, where bearings is mounted in vehicles. 

In Manufacturing industries it is very important that there is particular method or process to convert raw material into finished required product. There can be number of sub process in a industry to convert raw material into finished goods.

 

Basically we can classify manufacturing production process into three categories:

1. Make to stock (MTS)

2. Make to order (MTO)

3. Make to assemble (MTA)

1. Make-To-Stock (MTS)

In this system a factory produces goods that are held in stock at stores and showrooms. This means that a market for the goods needs to be predicted so that the items can be produced in advance ready for the consumer. However, producing too much can mean that surplus stock needs to be sold at a loss while producing too little may mean the market is missed and costs aren’t covered by sales. 

 2. Make-To-Order (MTO) 

 The make to order the manufacturer to wait until orders are received before production begins. This makes it much easier to manage inventories and react to market demand. However, customers will need to wait for their products to be produced and the manufacturer will need a steady stream of orders to keep the factory in production and profitable. 

 3. Make-To-Assemble (MTA)

This method is similar to make to stock, except the factory will produce component parts in anticipation of orders for assembly. This means that the manufacturer is ready to fulfill customer orders as they arrive, but can leave the manufacturer with a stock of unwanted parts if there is no demand.All of above types of manufacturing have their own risks and opportunities related to supply and demand. Produce too much and the market will be flooded, leading to a drop in prices and profit. Produce too little and the customer will go elsewhere and meaning that potential profit is lost. Quality control is also an important aspect of any manufacturing process in order to protect the image of your brand and products.

A successful manufacturing business requires a good mix of Quality Control, production Cost, Sales management and Both Inventory(WIP as well as Finish Goods) management.

Manufacturing industries not give product to people but also give employment and contribute in India's economic, In the recent period, manufacturing holds a share of 14% in India’s GDP. For advanced and developed nations like Germany, the US, South Korea and Japan, the comparable figures varies from 11% to 21%.