Manufacturing business is any business that uses components, parts or raw materials to make a finished good. These finished goods can be sold directly to consumers and manufacturing businesses that use them for making a different product.
What is Manufacturing?
Manufacturing is basically creating a good/s from raw materials through a process of conversion. Either physical, chemical, or a combination of both – utilizing equipment, machinery, and human labor. In the case of large-scale manufacturing, it employs the technique known as assembly line processing. With modern assembly lines utilizing the latest technologies increases efficiency and productivity so as to leverage on economies of scale.
When a business is manufacturing its main purpose is to create finished goods from raw materials. The finished goods are always tangible goods (or physical goods).
Manufacturing is, therefore, a broad term that describes almost all types of business that produces any tangible goods, from food to clothing to transportation. It encompasses everything in essential goods to non-essential tangible goods.
Is manufacturing the endpoint or the start-point?
When a business is into purely manufacturing, most often than not, it engages in a business-to-business activity. Using the economies of scales to its advantage can sell at a much lower price to turn up a profit. In this type of activity, though there is a modest profit to gain.
While a business can make manufacturing as the start-point. Selling the goods directly to businesses and at the same time make the goods undergo the process of Production. Here, when referring to Production, it means going through value-adding activities and adding satisfaction (utility) to the consumers or end-users.
Aside from Farming, Fishing, Forestry or Mining, we can consider manufacturing as the foundation of modern commerce and industry. For it is through manufacturing that traders and merchants realized that they could ask for a higher price per unit as opposed to just selling the raw materials or produce as it is. It is also through manufacturing that man aspired for something more and something better than before. As man’s wants ever increases and continues to desire more than what is currently available. The goods manufactured created more demand and even created a need for people who specializes in the use and application of such goods. This is what we recognize easily as Service.
In the contemporary society and current business and market environment, more hybrid businesses are cropping up especially when digitalization is becoming the not-so-distant future for everyone. These businesses are looking for goods that can be customized to reflect their own unique standards and tastes thereby making it their own product. And for them to realize this, they are looking for a business that could provide them that – the manufacturer.
In conclusion, manufacturing is a business worth considering because of the goods being produced is a necessity or can be considered to be one. It is more so if you have the means and the ways to secure the raw materials. It can be a good start and you could expand and diversify accordingly if there is a good opportunity.
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