The Manufacturing Business

It requires the use of raw materials to come up with finished goods. Sometimes raw materials suffice as final product and can be sold directly as finished good. Manufacture comes from the Latin words manu and factus meaning made by hand.

Manufacturing covers a huge range of industries from shell craft manufacturers to guitar makers to clothing industries and so many others. Almost all of the conceivable product and technology we use daily are produced through manufacturing.

Manufacturing is also identified with engineering and industrial design. Major manufacturers include car manufacturers such as General Motors, Chrysler, Boeing and others. Examples of manufacturing sectors are: biological and medical devices, electronic devices, aviation and aeronautics, metals and plastics fabrication, food, beverages and cosmetics, printing, leisure and entertainment equipment, transportation and paper and chemical processing.

Manufacturing involves a number of functions such as quality control, production, purchasing and other important functions. These functions are important in order to convert the raw materials to finished goods or to come up with the final product.

Important Components in a Manufacturing Business

Materials

• Raw Materials – these are the materials needed for production in its original or natural state.
• Work in Process – these are raw materials being processed or in the middle of being converted into finished goods.
• Finished Goods – final product.
• Labor – pertains to the skills needed to convert raw materials to finished goods. Labor is necessary for the whole manufacturing process. It could be direct labor which is necessary for the production of the good such as sewers for clothing. Or, it could be indirect labor such as human resources personnel which compute the salary of all employees of a manufacturing concern.
• Capital – this is the money used to buy raw materials, pay for labor or to come up with the finished product.