Manufacturing Business Facts Flashcards
(23 cards)
What is a manufacturing business?
Any business that uses components, parts, or raw materials to make a finished good.
These finished goods can be sold directly to
Consumers or to other manufacturing businesses that use them for making a different product.
Manufacturing businesses in today’s world are normally comprised of
Machines, robots, computers, and humans that all work in a specific manner to create a product
Manufacturing plants often use an assembly line, which is
Put together in sequence from,one work station to the next
By moving the product down an assembly line,
The finished good can be put together quicker with less manual labor
Some industries refer to the manufacturing process as
Fabrication
Manufacturing businesses can be very simple, with only few parts required for assembly or they can
Be very complicated with hundreds of,parts needed to create a finished product
Compared to other businesses, manufacturing businesses, usually have more
Legal regulations and environmental laws to deal with. These things can range from scrutinized labor laws to environmental and pollution issues.
Although labor unions are not as common as they were 50 years ago, they still heavily exist in the manufacturing industry where
Wages , benefits, and other rights are negotiated
Examples of manufacturing businesses are
Automobile companies, bakeries, shoe makers, and tailors as they all create products rather than services
Logging and mining are not manufacturing businesses as they do not
Change goods into new products
What does manufacturing refers to?
Refers to a large scale production of goods that converts raw material, parts, and components into finished merchandise using manual labor and/or machines.
The finished goods can be sold directly to
Consumers or to other manufacturers for the production of more complex products, or to wholesalers who distribute the goods to retailers
manufacturing businesses often employ
Machines, robots, computers, and humans to produce merchandise and typically use an assembly line, which enables a product to be put together step by step, moving from one work station to the next
A manufacturer is responsible for assembling the final goods such as
Laptops, fridges, or watches, or producing parts and that other manufacturers use to produce more complex products like cars or aircraft
A wholesaler is the middle man between a
Manufacturer and a retailer (or end consumer) it buys products in bulk from the manufacturer and resells them in smaller quantities for a higher price.
Make to stock
A traditional manufacturing strategy that relies on past sales data to forecast consumer demand and plan the production activity in advance
The drawback of the the made to stock strategy is that
It uses past data to predict future demand, which increases the likelihood of the forecasts being off, leaving the manufacturer with too much or not enough stock
Make-to-order
Allows customers to order products that are customized and manufactured to their specifications. The manufacturing process begins after the order is received, so the waiting time for the customer is longer, but the risk of excessive inventory is cutout
Make-to-assemble
A strategy that relies on demand forecasts to stock the basic components of a product, but starts assembling them after the order is received .
Make-to-assemble is a hybrid of
MTS and MTO
In make-to-assemble customers can
Customize the products and receive them quicker because the manufacturer has the basic components ready, but if orders don’t come in, the manufacturer is stuck with a stock of unwanted parts
Some manufacturing businesses ideas are
Bread bakery, herbal remedy, candle making, spice manufacturer
