Manufacturing Company: Definition, Characteristics, Examples and Types

Manufacturing companies may not sound foreign. Lots of manufacturing companies produce daily needs, such as food, kitchen equipment, and others.

In distribution, companies can choose whether to sell goods directly to customers, or sell them to manufacturers, distributors, or wholesale stores.

Are you interested in learning more about manufacturing companies? Check out the following article, OK!

Definition of Manufacturing Company

A manufacturing company is a company that transforms raw materials, components or parts into finished products through various production processes. This means the company turns something that is raw, into something that can be used.

Manufacturing companies usually operate in sectors such as automotive, electronics, pharmaceuticals, consumer goods, textiles, food and beverages, and many more. These companies play an important role in the economy by creating products that meet consumer demands and drive economic growth.

The manufacturing process involves several stages, including design, procurement of raw materials, production planning, assembly, quality control, packaging and distribution. Each stage requires specialized knowledge, equipment and skilled workforce to ensure efficient and high-quality production.

Manufacturing companies may have their own facilities and machines. They use various manufacturing methods such as mass production, batch production, or customized production, depending on market demands.

These companies frequently invest in research and development to innovate and improve their products and processes to stay competitive, and meet changing customer needs.

Manufacturing companies also focus on supply chain management to ensure a steady flow of raw materials, efficient production and timely delivery of finished goods. They may have partnerships with suppliers, distributors, and retailers to facilitate the movement of products from production facilities to final consumers.

Characteristics of a Manufacturing Company

Manufacturing companies have characteristics that set them apart from other companies. Here are the general characteristics that exist in most manufacturing companies.

Product Oriented

Manufacturing companies focus on the production of tangible goods. Their main goal is to transform raw materials or components into finished products through various manufacturing processes.

Adequate Physical Infrastructure

Manufacturing companies usually have physical facilities such as factories, warehouses, and production lines. These facilities house the special machinery, equipment and tools required for the production process.

Supply Chain Management

Manufacturing companies manage complex supply chains involving raw material sourcing, procurement, logistics, and distribution. They collaborate with suppliers, manage inventory and ensure timely availability of materials to support production.

Strict Quality Control

Ensuring product quality is an important aspect for manufacturing companies. The company implements quality control measures throughout the production process to maintain consistency, meet industry standards and deliver products that meet customer expectations.

Skilled Workforce

Manufacturing companies need workers with specific skills and knowledge related to the production process. This includes operators, technicians, engineers, quality control inspectors and other professionals who contribute to efficient and effective manufacturing operations.

Scope and Examples of Manufacturing Companies

Manufacturing companies are divided into many scopes. Following are some types of manufacturing scope and examples of their companies.

• Automotive: This company generally makes motorcycles, cars, and trucks. Examples of companies are for example Toyota, BMW, Honda.
• Electronics: Electronics manufacturing companies produce a variety of electronic devices, including cell phones, computers, televisions, and others.
• Pharmacy: This company makes and sells medicines or health products. An example is Kimia Farma.
• Food and Beverages: This company sells processed foods such as milk and chocolate. An example of a company is Nestle.
• Textiles and Apparel: Textile manufacturing companies produce fabrics, fibers, yarns, and apparel companies produce ready-to-wear garments such as shirts, trousers and shoes. Examples are Nike, H&M, Zara.

Manufacturing Engineering

There are three main types in manufacturing techniques, namely MTM, MTO and MTA. Each has its own goals and market.

Make to Stock (MTS)

MTS or Make to Stock is an old manufacturing strategy that relies on existing sales data, before producing goods. The goal is to find out the interest of buyers, and plan the right production volume.

Make to Order (MTO)

MTO or Make to Order. This manufacturing process allows buyers to have specific products made to their liking.

The manufacturing process is carried out after the company's request is received.

This manufacturing process takes a lot of time, but is effective for cutting unnecessary waste products.

Make to Assemble (MTA)

MTA or Make to Assemple is a strategy that the company does by combining the MTS and MTO approaches.

The company will stock the basic components of a product, but the new assembly will take place after they receive their orders.

Buyers will receive their goods faster than companies with an MTO strategy, but there is a risk that the company must bear, namely components that the company does not need.

Each type has its own risks. Making too many items will lead to financial losses.

However, producing too few meant that the company was unable to meet demand.

It is therefore important for companies to focus on low production costs and maintained quality control. Don't forget to focus on good sales management as well.

Manufacturing Type

There are several types of manufacturing that are common in manufacturing companies. Here is an explanation.

Additive Manufacturing

People generally refer to this type of manufacturing as 3D printing. This process involves using stacked layers, to create 3D patterns and shapes.

The 3D printer is a tool that companies use throughout the process.

Advanced manufacturing

This method utilizes new technology so that the production process can be further developed. Companies can even add value to raw materials, so that their target market becomes more satisfied.

Newer technologies are also capable of accelerating product production faster and increasing yields.

Contract Manufacturing

This is the most common type in the manufacturing industry. The company will cooperate with other companies, which need manpower outsourced for a particular manufacturing process.

For example, an auto company will look for a manufacturing company that can make the special parts that cars need.

So, that was a complete explanation about manufacturing companies and examples of companies. You can now better understand what a manufacturing company is and how it works.