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What Does Manufacturing Mean?

Devon Denomme, Aaron Hill
  • Author
    Devon Denomme

    Devon has tutored for almost two years. They have a Bachelor's in Air Traffic Management from Embry-Riddle Aeronautical University and minored in Aviation Safety and Homeland Security. They also are AT-CTI certified.

  • Instructor
    Aaron Hill

    Aaron has worked in the financial industry for 14 years and has Accounting & Economics degree and masters in Business Administration. He is an accredited wealth manager.

What is a manufacturing business? Learn the various types of manufacturing businesses. Understand and learn the essential keys for a manufacturing business. Updated: 09/11/2021

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Definition of Manufacturing Business

What does manufacturing mean? Many of the products that consumers buy and utilize are the result of manufacturing. They undergo the process of design and assembly before arriving in stores for purchase. Manufacturing is defined as the conversion of raw materials into finished goods through the use of tools, labor, and machinery. Raw materials include items such as wood, stone, and ore. They become finished goods including lumber, pillars, or steel for construction.

Manufacturing is the process of converting raw materials into finished goods. Assembly lines help manufacturing businesses, such as in the automotive industry, produce goods more efficiently.

manufacturing business definition

Popular stores such as Wal-Mart, Target, and Dollar Tree are not responsible for the manufacturing of goods. In most cases, they order items from a specific manufacturing business that specializes in making a product. A manufacturing business is defined as a business that uses components, additional parts, or raw materials to make a finished good. The product is then either sold directly to other industries, consumers, or to a store that consumers shop at to obtain an item. For example, a loaf of bread or a set of tires could be sold directly to consumers from a manufacturing business or through a different store, while lumber could be sold to a construction company.

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History And Development of Manufacturing

Before the large-scale production of goods, many items were made by hand and took specific skills and human labor to create. Manufacturing businesses became popular in the 19th century during the Industrial Revolution, which began in Europe and spread to North America. New technologies such as steam power and natural sources of fuel allowed for production to be sped up by a large margin, therefore meaning more goods could be manufactured in a shorter amount of time. The number of workers and human labor required to produce these goods decreased because of newer and more automated technologies as well.

One of the most important developments during the Industrial Revolution was the invention of the assembly line. During the assembly line process, workers would each have a specific task to complete at their station before sending the product to the individual responsible for the next step in the assembly process. In 1901, Ransom Olds invented and patented the assembly line to increase the production on his automobile manufacturing line. In 1913, the first Ford Model T automobiles were produced using Henry Ford's moving assembly line, which was an improvement on Olds' original concept. Ford added conveyor belts to the line to increase output even further.

The Ford Model T was the first product to utilize the moving assembly line, an improvement made to Ransom Olds' assembly line by Henry Ford that featured conveyor belts.

examples of manufacturing companies

By the early 1960s, engineers began to experiment with robotic machinery. Robotic arms, in the automotive industry, for example, reduced the human labor involved in the assembly process and allowed even more products to be manufactured in less time. The additional goods delivered to the market benefited the growing number of consumers as well as the national Gross Domestic Product (GDP), in turn growing the economy. The Market Value Added (MVA), an estimate between the value of a company or the economy and its relationship with investors and consumers, also benefits when more goods are able to be delivered to consumers with a high demand for a product.

Types of Manufacturing Businesses

Manufacturing businesses utilize many manufacturing methods to provide consumers with the products they desire. Some of the ways which manufacturing businesses may conduct operations to output as much product to the consumer market as possible include:

  • Mass production: The industrial process of creating large amounts of a product at once. This method is cost-effective and saves time and labor while generating large outputs of products and profits.
  • Pre-fabrication/Fabrication: Fabrication is another term for manufacturing used mainly in the construction industry. Pre-fabrication refers to the manufacturing of components off-site before they are assembled somewhere such as a construction zone. Prefabrication saves time during the final assembly process.
  • Manufacturing engineering: The design, development, and implementation of new technologies to produce goods more efficiently. Automation and computerized technologies, such as robotic arms, are the result of manufacturing engineering and reduce human labor while increasing output.

Examples of Manufacturing Business

The processes involved with manufacturing businesses directly impact the products and industries which require manufacturing to generate a profit. Examples of manufacturing companies and the largest sectors involved with manufacturing are:

  • Ford Motor Company (Automotive technology production)
  • General Electric (Power production)
  • Boeing (Aviation and spacecraft production)
  • General Motors Corporation (Automotive production)
  • Michelin (Automotive/rubber production)
  • Under Armour (Textile and clothing production)
  • Exxon-Mobil (Petroleum and fuel production)
  • HP Inc. (Computer technologies and software)
  • Nestle (Food and beverage production)
  • Pepsi Co. (Food and beverage production)

A manufacturing company may be responsible for more than one product on the consumer market. These products do not have to be in the same industrial sector, though in many cases the products that a manufacturing company outputs are related in some way. For example, a company may only produce food or only produce hygiene supplies. Manufacturing business examples that follow this trend include:

  • Hershey's: Specializes in chocolate and candy products such as milk chocolate, peanut butter cups, and malted milk balls
  • Procter & Gamble: Produces cleaning supplies and personal care items, all of which are used frequently in the household
  • Nike: Manufactures clothing and textile products including shoes, shirts, socks, and pants

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Frequently Asked Questions

What are some examples of manufacturing businesses?

Many manufacturing businesses send finished goods directly to customers, to a store for purchase, or to a business within another sector such as construction. Some examples of manufacturing businesses include:

  • Boeing
  • General Electric
  • Hershey's
  • Procter & Gamble
  • Pepsi Co.
  • Exxon-Mobil

What are the examples of manufacturing?

Many of the products which consumers buy in stores such as Wal-Mart or Dollar Tree are the result of manufacturing. A manufactured good is not a raw product (wood, ore, etc.), but rather a finished good such as a doll, clothing, tires, or a car.

What are 3 manufacturing companies?

Manufacturing businesses are businesses that use raw materials, additional parts, or components to create a finished good. Three manufacturing companies are:

  • Nestle: Turns raw cocoa into chocolate products, as well as beverages
  • Under Armour: Turns raw cotton and other materials into textiles or clothing
  • Ford: Turns raw metals into manufactured automobiles

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