What is Manufacturing?

  • The manufacturing term is used to process raw materials or spare parts into final goods by using tools, machinery, human labor, and chemical processing techniques.

    Manufacturing is considered a huge part of the economy. It involves the processing and refinement of raw materials like wood, metal goods, and processed food stuffs.

    Manufacturing enables businesses to sell final goods at a higher cost than the value of the raw material used. Small to large scale manufacturer’s mass-production by using advanced technology as core assets. The modern manufacturing techniques enable manufacturers to take full advantage to producing mass units at a lower price.

A Brief History of Modern Manufacturing

  • Earlier manufacturing was done by using traditional methods. However, as time flies and every day a new technique comes into our lives with modern technology that can be a game changer for manufacturing industries.

    In this period, manufacturing industries process finished products in high volume. This is called development of steam engines and latest technologies that allow companies to use machines in the manufacturing process. It helps to reduce the need for human resources while increasing the volume of goods that could be produced.

    Modern manufacturing helps in mass production and assembly line manufacturing that allows companies to create spare parts that can be used interchangeably.

    Advanced technologies like computers and precision electronic equipment allow companies to use high-tech manufacturing methods to produce mass products at a higher value and need specialized labor and higher capital investment.

    These skills are required to operate modern machines and develop manufacturing processes. Low-skill manufacturing jobs wouldn’t be scalable globally. As such, high-end products require precision and skilled manufacturing are typically produced in developed economics.

Here are 3 Types of Manufacturing Techniques

  • 1. Make-to-Stock (MTS)

    2. Make-to-Order (MTO)

    3. Assemble-to-Order (ATO)

    1. Make-to-Stock (MTS) : Make-to-stock inventory products will be created based on industry’s forecasts and customer demand. Customer Demand forecasts are based on past sales data and current economic conditions. However, in this technique the main drawback is the higher chance of surplus inventory and conversely inventory stockouts. It can happen through inaccurate forecasts demand.

    2. Make-to-Order (MTO) : Make-to-order inventory refers to stocking products, a company will start production when they receive manufacturing order. With this manufacturing technique you can maximize storage space to avoid ending up with dead stocks. The main advantage of MTO is that there will be no surplus inventory that can be sold at a discount rate or scrapped.

    3. Assemble-to-Order (ATO) : Assemble-to-order inventory refers to the components to make the final goods are stocked and ready for assemble when sales order is received. Assembling orders can be customizable as per the business requirement. Once you’ve figured out the ideal inventory method you will need robust inventory software which provides real-time visibility and frees up your resources to stay focused on other things which need more attention.

Let’s have a look at the Manufacturing Process Flow-

  • Generally, we can see that manufacturing processes can be divided into five types. These processes can be varied as food manufacturing, apparel manufacturing, wood product manufacturing, chemical manufacturing, electrical manufacturing and many more.

    Types of Manufacturing Techniques:

    1. Repetitive Manufacturing : The manufacturing process runs all day and night, all year round, producing a similar product. Repetitive manufacturing is a proper set up where you can speed up production and slow down when needed to meet the business requirements.

    2. Discrete Manufacturing : Here is another type of manufacturing which produces the same things but in different designs, there are various setups and frequent changeovers for production speed up. This manufacturing process can be found in factories that produce automobiles, furniture, toys, airplanes, gadgets and smartphones.

    3. Job-Shop Manufacturing : Job shop manufacturing is made up of various production areas which produce small batches of custom products. These are either made to order or produced as per stock. You can organize these workstations; manufacturers can produce custom products or more in batches. It is good for bespoke products which can produce project to project.

    4. Batch Process Manufacturing : This manufacturing process is similar to discrete and job-shop manufacturing. The batch process depends on consumer demand and is produced accordingly. After batch production, the equipment is cleaned and prepared for the next batch, so that again a batch process can be produced, and this process is continuous.

    5. Continuous Process Manufacturing : Continuous process manufacturing is similar to repetitive manufacturing, this one also runs 24/7. However, in the mining process the raw materials can be granule materials. This type of manufacturing process happens in industries like oil refining, metal smelting and some food productions.

A Few Manufacturing Industries where ERP is needed-

  • Every small to large enterprise needs ERP for manufacturing businesses. Here are topmost manufacturing industries-

    1. Automotive Industry
    2. Cosmetic Industry
    3. Cables & Wire Industry
    4. FMCG Industry
    5. Food & Beverage Industry
    6. Footwear Industry
    7. Textile Industry
    8. Chemicals Industry
    9. Garments/Apparel Industry
    10. Leather Industry
    11. Pharmaceuticals Industry
    12. Machinery & Equipment
    13. Steel Industry
    14. Rubber Industry
    15. Wood Industry
    16. Plastic Industry
    17. Printing & Packaging Industry
    18. Concrete and Ready-mix Industry
    19. Electrical Equipment Industry
    20. Mining & Quarrying Industry

    These manufacturing industries require the engagement in the mechanical, physical, or chemical transformation of materials, substances, or components into new and finished products.

Learn More About Manufacturing ERP Resource-

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