What Is Manufacturing? (With Types, FAQs, and Examples)

Updated February 9, 2023

Manufacturing is an essential economic activity that provides goods for use, employment opportunities, and business revenue. If you use tangible products, you may be curious about how companies create or manufacture them. Knowing what manufacturing is can help you understand its importance to the economy. In this article, we answer the question, "What is manufacturing?", discuss various why businesses manufacture items, explain manufacturing processes, differentiate manufacturing from production, answer frequently asked questions, and explore examples of manufacturing industries.

What is manufacturing?

Learning the answer to the question, "What is manufacturing?" can offer insights into how companies make products. Manufacturing is the conversion of raw materials into tangible products that can meet a customer's needs or expectations. For example, companies manufacture chairs from wood to enable users to sit comfortably. Manufacturing typically involves using machines, tools, and equipment. It's a collection of value-adding processes ending with a final good. Here are other examples of items you can manufacture:

furniture
laptops
bags
cars
shoes
cooking utensils

Why do businesses manufacture goods?

Businesses generally manufacture goods for internal use or sale to customers. Before achieving these goals, they may perform the following:

Make-to-stock: This involves producing goods to keep in stores or warehouses. Businesses that can accurately predict customer demands generally stock manufactured goods.
Make-to-order: This involves waiting for orders before manufacturing goods. Businesses that can fulfill customer requests within a short timeframe typically manufacture items after customers send their orders.
Make-to-assemble: This involves manufacturing components while waiting for customers to order an assembly. For example, a manufacturer may create engine components while waiting for a customer to order a luxury car.

Types of manufacturing processes

Here are the common types of manufacturing processes a business can use:

Repetitive manufacturing

Repetitive manufacturing involves using dedicated equipment to create the same products over long periods. Electronic goods, automobiles, and refrigerators are common examples of repetitive products. Repetitive manufacturing offers the advantage of saving time when setting up equipment for manufacturing. Whenever required, a business can also add another manufacturing equipment or increase the manufacturing speed of existing equipment to meet customer demand.

Discrete manufacturing

Discrete manufacturing is the creation and assembly of distinct products. Unlike repetitive manufacturing, it involves using highly adaptable manufacturing equipment. This way, a manufacturer can adjust products to align with customer preferences and desired product attributes. Businesses engaged in discrete manufacturing typically develop methods to save setup time when switching to a new product. Toys, smartphones, and furniture are examples of items you can make through discrete manufacturing.

Job shop manufacturing

Job shop manufacturing involves creating small batches of a customized product based on a customer's order. Paint shops and machining centres are examples of job shops where this type of manufacturing process can occur. Job shop manufacturing generally involves manual operations instead of automation.

Continuous process manufacturing

Continuous process manufacturing involves moving raw materials from their starting position through each manufacturing stage to obtain a final product. Instead of waiting for each product to complete the manufacturing cycle, manufacturers continuously process additional units. A continuous manufacturing process involves a constant flow of raw materials and created products. It may be beneficial in industries experiencing uniform product demand.

Batch process manufacturing

Batch process manufacturing involves creating specified product amounts within a defined timeframe. These tangible products are typically identical. For example, engineers typically use batch manufacturing to create computer chips. This manufacturing process might suit industries with intermittent customer demands. Manufacturers can also manage costs by performing routine maintenance on machines or tools while waiting to manufacture another batch.

Additive manufacturing

Additive manufacturing, or 3D printing, is a computer-controlled process that involves creating an object in layers. For example, many engineering firms use additive manufacturing to create rocket engine components and fuel tanks starting from the base. Manufacturers generally use 3D printers to perform additive manufacturing.

Manufacturing vs. production

While manufacturing and production are similar activities, you can differentiate them by the following:

Definition

Production refers to goods creation or service delivery by converting raw materials or resources. It may involve using machines and specialized equipment. In comparison, manufacturing refers to goods creation typically by using machines and specialized equipment. Production has a broader scope than manufacturing.

Resources

Resources refer to the materials required to create a good or service. Manufacturing involves using tangible materials to create goods, such as lumber or minerals. In comparison, production involves using tangible and intangible resources to make goods or deliver services, such as money or credit.

Process end

Manufacturing typically ends when a manufacturer creates a finished good. For example, you can conclude spoon manufacturing after moulding a unit from wood or stainless steel. In comparison, production typically ends when a producer delivers the finished good to customers or intermediaries, such as wholesalers or retailers.

FAQs about manufacturing

Exploring the following answers to common manufacturing questions can help you learn more about the sector:

What is manufacturing production?

Manufacturing production refers to the strategies companies use to manufacture and produce goods for sale. For example, a just-in-time (JIT) inventory system is a strategy companies may use. Many variables impact manufacturing production, such as raw material availability, market demand, and inventory costs.

What is lean manufacturing?

Lean manufacturing is a methodology focused on reducing waste while maximizing productivity within manufacturing systems. Here are the key principles for practising lean manufacturing:

Identify the value: This step involves specifying customers' expected product value.
Map the value stream: At this stage, consider documenting all activities in a manufacturing process and outlining the valuable ones.
Create flow: This step involves creating a continuous flow of value in manufacturing activities.
Establish a pull system: A pull system involves replacing the manufacturing supplies or components only when consumed for a manufacturer to create sufficient products to meet customer demand.
Pursue continuous improvement: This step involves improving manufacturing processes to continue delivering value to customers while saving time and ensuring efficiency.

Does manufacturing impact the environment?

Manufacturing activities involving machines and heavy-duty equipment can impact the environment. For this reason, many businesses develop sustainable manufacturing practices. Sustainable manufacturing is the creation of tangible goods with minimal use of energy and natural resources while ensuring societal health and safety.

What are the business risks involved in manufacturing?

Manufacturers often balance customer demand and supply to ensure they make a profit. For example, they often create sufficient goods to avoid price changes and prevent scarcity. Quality control is also an essential factor in successful manufacturing. It involves maintaining all standards in manufactured products by testing units.

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Examples of manufacturing industries

Here are examples of industries in a typical manufacturing sector:

Automotive industry

The automotive industry comprises companies and organizations involved in designing, developing, manufacturing, and selling vehicles and their components. Automation engineers, mechanical engineers, project managers, and vehicle technicians are common examples of professionals in this industry. As one of the largest contributors to the country's gross domestic product (GDP), the automotive industry offers many job opportunities.

Medical device industry

The medical device industry involves manufacturing products that benefit the health care system and society. Firms in this industry may make surgical equipment, prosthetics and assistive devices, diagnostic kits, orthopedic appliances, and electromedical devices. This industry applies science and engineering principles to create products.

Textile industry

The textile industry involves manufacturing textiles using natural and artificial fibres and filaments. Located primarily in Quebec and Ontario, this industry supplies a wide range of value-added products to over 150 customers. Professionals in the textile industry include fashion designers, print managers, weavers, illustrators, and engravers.

Plastic industry

The plastic industry involves manufacturing intermediate or final products using plastic resins. Water bottles, food containers, and plastic cutlery are common outputs by companies in the plastic industry. Professionals in this industry include blow moulding technicians, mould makers, assemblers, and injection mould operators.

Primary metals industry

The primary metals industry supplies iron and steel products to other manufacturing industries. It involves manufacturing activities, such as smelting and refining nonferrous metals and iron casting. Professionals who work in this industry include metallurgists, welders, pipefitters, and quality assurance inspectors.

What Is Manufacturing? (With Types, FAQs, and Examples)