3. What Is Manufacturing?
The term manufacturing refers to the processing of raw
materials or parts into finished goods through the use of tools,
human labor, machinery, and chemical processing.
Converting these raw materials into something more useful
adds value. This added value increases the price of finished
products, making manufacturing a very profitable part of the
Manufacturing allows businesses to sell finished products at
a higher cost than the value of the raw materials used.
6. Advanced Manufacturing
This method involves new forms of technology to improve
the production process.
Companies can add even more value to the raw materials
they use to better serve their target markets.
Newer technologies also help bring new products to
market faster while increasing output.
7. Contract Manufacturing
This is common in the manufacturing industry.
Companies will enter into partnerships and business
relationships with other firms to outsource certain
For example, an automotive company may hire a third party
to make parts that it will use in its assembly lines to make
9. Make to Stock (MTS)
The traditional production technique is make-to-
stock, the manufacturing of a standard product
based on forecast demand.
A company estimates how many units will be sold
over a given period of time, then plan in advance
to manufacture that many goods.
10. Make to Order (MTO)
Opposite of MTS, make-to-order manufacturing
entails working directly with a customer to
understand their need and desired product
specifications. Manufacturing typically only starts
after a signed contract or letter of intent.
11. Make to Assemble (MTA)
The third type of manufacturing technique is a make-to-assemble
Companies try to get a head start by starting production on
component parts. Then, as customers begin to place orders,
companies assemble previously-manufactured components.
Because the company had partially completed the manufacturing
process, the good can often be delivered faster to customers than
under MTO processes.
12. Steps of Manufacturing
These seven steps, following in sequential order, encompass not
only the physical manufacturing of a good but the stages before
and after a tangible good is made.
13. Step 1: Develop the Idea
Before any tangible good is made, manufacturing begins with
concept development and the growth of the product vision.
This product vision defines what the product is, who the target
audience is, what the need for the good is, and what competitors
14. Step 2: Perform Market Research
The manufacturing process still incorporates researching the
potential product to explore ways to make it better.
This includes understanding what raw materials can be used,
what equipment is needed, what conditions the good must
be made under, and how the good will differentiate from
15. Step 3: Design the Product
With research considerations in-hand, it's time to
design the product.
This should always be done in consideration of what
the customer will need and use.
16. Step 4: Finalize and Prototype
With the design stage now complete, it's time to
make final decisions on what the product will be.
This includes making choices of what raw materials
to use or how to define the manufacturing process.
17. Step 5: Prototype Testing
Once the prototype is complete, it's time to test it.
This includes analyzing actual resources that went
into the good to better understand how much the
actual product will cost and what its profit
margin will be.
18. Step 6: Manufacture the Good
Enough time, testing, and research has been done;
it's now time to make the good.
The company acquires the machinery and
equipment necessary to make full-scale processes
to manufacture the good.
19. Step 7: Monitor the Process
In order to continually improve, the company must
continually evaluate how the process is going and whether
expectations are being met.
The company must analyze how much the good costs to
make and compare this against sale prices.
Step 1: Develop the Idea
Step 2: Perform Market Research
Step 3: Design the Product
Step 4: Finalize and Prototype
Step 5: Prototype Testing
Step 6: Manufacture the Good
Step 7: Monitor the Process
21. Manufacturing vs. Production
Production is broader and encompasses manufacturing, as
production is simply taking input and yielding an output.
Manufacturing, a more specific type of production, is the act of
taking a raw material and transforming it into a tangible finished
good. The manufacturing process ends with a tangible good.
Why is manufacturing important?
What is the difference between production process and
Give 3 manufacturing companies here in the Philippines.