What is manufacturing?

Manufacturing is the processing of raw materials or parts into finished products using tools, human labor, machinery and chemical processing.

The term can refer to a range of human activities, from handicrafts to high-tech products, but is most commonly applied to industrial design, in which raw materials from the primary sector are mostly converted into finished products. Such goods can be sold to other manufacturers to produce other more complex products (such as aircraft, household appliances, furniture, sports equipment or cars) or distributed through the tertiary industry to end users and consumers (usually through wholesalers who turn them into traders who then sell them to individual customers).

Manufacturers use economies of scale to improve efficiency and produce more units at a reduced cost. As a value-added process, the production allows raw materials to go through a process of change to become part of the product and ultimately be sold at a higher price than the value of the raw materials.

History and development

People have historically sought ways to turn raw materials, such as ore, wood, and food, into finished products, such as metal goods, furniture, and processed foods. By refining and processing these raw materials into something more useful, individuals and companies have added value.

This added value increased the price of finished products, making production a profitable venture. People began to specialize in the skills needed to produce goods, while others provided funds to companies to purchase tools and materials.
The early production system changed with the introduction of the factory system in Britain at the beginning of the Industrial Revolution in the late 18th century. This system took advantage of technological advances and used machines powered by water, steam and, later, electricity, which enabled large-scale production.

The production line method was described by Adam Smith in Wealth of Nations, who introduced the concept of division of labor. This meant that different people would take on only one part of the production process, for example cutting the wire with needles, to create a more efficient and cost-effective process. Mechanization and subsequent automation relied on this concept to create highly repeatable production.

Instead of one artisan producing the entire product as has been the case for centuries in the past, production was dismantled into separate parts to create the basis for modern production as we know it today.

Mass production and production on conveyor belts, have enabled companies to create parts that can be used alternately, and have made it easier to make finished products, reducing the need to customize parts.

Ford Motor Company popularized the use of mass-production techniques in the early 20th century. Computers and precision electronic equipment have since enabled companies to become pioneers of high-tech manufacturing methods. Products made by these methods usually have a higher cost, but also require more specialized manpower and higher capital investment.

The skills required to operate the machines and develop the processes used in production have changed drastically over time. Many low-skilled manufacturing jobs have moved from developed countries to developing countries because working in developing countries is usually cheaper.

More skilled production, especially those of precision and premium products, usually takes place in developed economies. Technology has made production more efficient and employees more productive. Therefore, although the volume and number of goods produced increased, the required number of workers decreased.

Types of manufacturing

Basically, production is a simple process; raw materials or components are purchased and then converted into a finished product. However, in order to succeed, the manufacturer must be able to cover the cost of making the product, meet the demand and create a product desirable in the market.

There are three types of the production processes; Make-to-stock (MTS), Make-to-order (MTO) and Make-to-assemble (MTA).

Make-to-stock (MTS)

The factory produces goods for wholesalers and retailers. By forecasting the market and demand, the manufacturer will plan production activity in advance. If they produce too much, they may need to sell the surplus at a loss, and if they produce too little, they may miss market opportunities and not sell enough to cover costs.

Make-to-order (MTO)

The manufacturer is waiting for orders before producing stock. It is easier to control stocks and the owner does not have to rely so much on market demand. Customer waiting times, however, are longer and the manufacturer needs a constant flow of orders to keep the factory in production.

Make-to-assembly (MTA)

This method is a hybrid between a make-to-stock (MTS) and a make-to-order strategy (MTO).

A MTS strategy is one in which products are fully produced in advance. The idea is to create an inventory that matches the expected or projected consumer demand. This method would consist of setting the level of production, creating stocks and trying to sell as many assembled products as possible. It is mainly used for high-consumption goods, consumables and items that can be purchased in large quantities or as a single unit.

A make to order strategy is one in which products are produced upon receipt of the order. Production is driven by demand, and items are only produced when orders are confirmed. In other words, the operation of the supply chain begins until there is evidence of sufficient customer demand. This strategy is often used for premium goods or items made individually or in small batches.

The MTA strategy seeks to combine the benefits of custom manufacturing and inventory production - the rapid transfer of products into the hands of customers, while allowing the product to be customized or modified in certain ways, according to customer requirements. In most cases, the time and costs associated with building a product from its components are minimal. However, the time and cost of making components, which are usually ordered from suppliers, can be significant.

Manufacturing methods

In general, manufacturing methods refer to the techniques of production of finished products from raw materials, the quantity and specifications of which depend on market demand and customer requirements. This means that the production method must be selected and implemented on the basis of the particular product being manufactured, how many products need to be produced and the tools available.

Thus, with the development of several production methods, there has been a balance between customer needs and production economics. As we will see later, different production methods have workflows based on different ideologies, all aimed at meeting customer requirements in the most economical way possible.

Mass production

The most common method of production is mass production - a process by which a large quantity of finished products is produced on the basis of set quality standards or products. Although the concept of mass production existed even before the industrial revolution, it was only with the development of machine tools that the practice of modern mass production as we know it today began.

Mass production is used for a wide range of products - from household items to semi-finished products used in large industries. As you would expect, these products are also treated differently. Under the term mass production there are common subtypes:

Discrete production

The focus of discrete production is the production of various items, which can be counted and easily recognized. Common examples include furniture parts, car parts, aircraft parts, and other household items.

The characteristic of discrete production is that the process can be divided into different steps or parts. Each step can be started or stopped, independently of all other steps. This makes discrete production a little more flexible and easier to plan. The output from these different steps can be stacked at the end or stored until they are ready for use in the following processes.

Process production

Unlike discrete production, process production refers to the production of goods that cannot be counted as discrete units. Examples include gases, powders or liquids.

A typical feature of process production is that the goods in the process can no longer be distilled back to their basic components. This means that there is less room for errors in the production process, which requires higher quality standards in the process.

Repetitive production

Recurring production refers to a process designed to produce repeated products over a long period of time, with a fixed rate of production obligation. Thus, the process is not focused on satisfying a fixed series of orders - instead, the process must be designed to satisfy a certain number of orders produced per hour or per day.

Job production

Job production refers to the process of creating custom works or disposable products. This implies that such products are needed in batches much smaller than those usually produced by mass production methods.

The method uses specialized production areas, not production lines. The work can be done by small factories or engine rooms with craftsmen and skills dedicated to a particular range of products. This level of commitment and specialization usually produces finished products of better quality - a key advantage of job production.

Serial production

Serial production is a semi-continuous process in which intermediates are produced in certain quantities and stored in batches. The entire batch production process may consist of several steps, with each batch going through these successive steps separated by storage periods or quality checks. This is in contrast to a true continuous process in which intermediates do not perform periodic checks of goods in the process.

The goal of serial production is for the process to take advantage of the same economic benefits of continuous production, but has more room for quality control or adjustment. For example, sudden changes in design or material can be applied between different batches.

Lean production

The principle of lean production can be summed up by the sentence “work more and more with less and less”. Derived from Toyota’s operating model back in 1930, the term “lean manufacturing” originated in 1988 and is the foundation of several other production management principles.

Lean production relies on several basic concepts - recognizing the value that the customer wants, the flow of value of each product, removing waste and removing unnecessary activities, among other things. The idea is to look at each stage of production and implement continuous and gradual improvements. The ultimate goal is to achieve perfection - a state in which the amount of time and the number of steps required to meet customer needs continue to decrease.

Agile production

In the evolution of production methods, agile production is often considered the next step after lean manufacturing. Once the process is optimized according to the principles of lean manufacturing, the goal of agile production is to enable a rapid modification or modification of the process according to the changing needs of customers. However, being agile means that the organization must abandon a few lean principles. Some experts have said that organizations should choose between slimness or dexterity - they cannot be both.

Agile production keeps one key principle from lean - the goal of reducing waste. However, they must also have the flexibility to be able to serve the changing needs of customers quickly and efficiently. To achieve this, they must have facilities that can be quickly rebuilt and teams with different skill groups. They must also have very strong networks with service providers and suppliers that will allow them to negotiate new agreements in response to changing market trends.

Mass customization

The goal of mass customization is to combine the economy of mass production with the possibilities of adaptation at the individual level. This is achieved by the concept of "delayed differentiation" - leaving the possibility of adjusting the product to the last possible moment.

A relatively new branch in the manufacturing industry, mass customization relies on modular manufacturing technologies that enable further product customization. This requires a paradigm shift towards customization, which is a joint effort of both the manufacturer and the customer.

Manufacturing processes

There are different ways of production, ie the processes through which the final product is created. They differ in several characteristics - materials, processing, cost, time required to finalize production and more.

Some of these processes are:

  • Casting - Casting is a manufacturing process in which liquid material is usually poured into a mold containing a cavity of the desired shape and then allowed to harden.
  • Molding - the process of manufacturing by forming a liquid or flexible raw material using a rigid frame called a mold or die. It may itself have been made using a pattern or model of the final object.
  • Forging - is the process of processing metal by shaping metal parts and objects by mechanical deformation; the workpiece is reshaped without adding or removing material, and its mass remains unchanged.
  • Machining - a process in which a material (often a metal) is cut into the desired final shape and size by a controlled material removal process. Processes that have this common feature, controlled material removal, are today commonly known as subtractive production, as opposed to controlled material addition processes, which are known as additive production.
  • Additive manufacturing - 3D printing or additive production, is the construction of a three-dimensional object from a CAD model or digital 3D model. The term "3D printing" can refer to various processes in which a material is deposited, joined or cured under computer supervision to create a three-dimensional object, with the addition of material (such as plastic, liquid or powder) joined together, usually layer by layer.

The future of production

Production processes change along with the skills needed to perform them. As more cost-effective methods are sought and automation in production increases, the number of jobs in this sector is expected to decline. However, those who stay are likely to be more specialized and highly paid.

Increasingly sophisticated technology means that production will require the skills and training of management staff, while new materials and processes are changing certain industries. Nanotechnology is changing electronics manufacturing, while lighter materials like aluminum and carbon fiber have changed the automotive industry. By the way, pharmaceutical products have revolutionized bioengineering, and 3D printing allows the creation of specialized custom components for industries such as the aerospace and medical industries. As robots become more sophisticated, many manufacturing processes are automated, and big data allows manufacturers to analyze and target customer needs to drive product development.

Over the next decade, 4 million jobs in production are likely to be needed, and 2.1 million are expected to remain unfilled if we do not encourage more people to pursue a modern manufacturing career. Moreover, according to a recent report by the Institute of Manufacturing, the cost of these missing jobs could be as little as $ 1 trillion in 2030 alone.


Manufacturing remains an important aspect of the industry, not only to provide goods for the market but also to drive the economy. As manufacturing processes continue to evolve, so do the necessary skills.
Manufacturing requires a careful balance of supply and demand, whether through the production of items for stock, for order or for assembly, as well as the ability to read market demands.

With the development of the market, manufacturers responded by adopting new production methods. Some of them have existed for a very long time, such as mass production or one-time production. Others represent a new way of working, such as lean production and agile production.

As technology advances, we expect only the advancement of production methods to better meet customer needs and gain an advantage in a highly competitive market.

Klara Markotić
Content Creator at MachineDesk with a particular interest in marketing and social media.