The Most Important Components of a Manufacturing Business

The manufacturing business involves producing resources on a large scale, making it

an essential sector in a country’s economy. It is responsible for converting raw materials
into semi-final and final items. These are the items you will find in retail and wholesale
stores. This sector is known for utilizing massive machinery and equipment. It also
employs a more considerable number of workers than any other sector. You will find an
excellent example of the manufacturing business on the website.

Here are the most important components of a manufacturing business.

1. Vision

A manufacturing business does not have to go into depth about technical
details. However, the top executives must create a vision of what their company
will look like and operate as a business. The management must understand that
technology has transformed how businesses create value. This sector is moving
from the optimization of individual units to the optimization of the entire
production ecosystem. This change demands that manufacturing businesses
rethink their source of competitive advantage and renew their strategic direction
and vision with technology at the forefront.

2. Location

Facility location is one of the most strategic and critical pieces of the
manufacturing puzzle. Once you build a manufacturing facility, you have made a
significant investment of time, resources, and capital that cannot be changed for
a long time. Some of the factors to consider when choosing a location include;

  • Proximity to customers, suppliers, and labor.
  • Environmental regulations
  • Quality-of-life considerations
  • Potential for expansion

3. Layout

The layout helps you design a workflow that maximizes employee and
production efficiency. The facility layout is often complex because you must
consider the available space, work process, delivery of components and parts,
worker safety, and operational efficiency. A poor layout will create inefficiencies,
costs and lead to worker frustrations. The manufacturing sector has four primary
types of layouts; process, product, cellular, and fixed layouts.

a. Process Layout. This layout improves efficiency by arranging equipment
according to its function. You should always design your production line to
eliminate material flow, inventory handling, and manage waste. This layout
involves assembling similar operations and machinery in each department
instead of arranging them according to the production sequence. For instance, you can have the paint department where one will do everything related to paint.

b. Product layout. This layout involves a series of workstations that assemble
ready-made parts. Here, you will arrange your employees, equipment, and
departments in an assembly line.

c. Cellular Layout. This is a lean method of producing similar products using
cells, team members, workstations, and equipment. This layout eliminates
set-ups and unnecessary costs between operations. The cellular structure
aims to move the manufacturing process as quickly as possible and make
a variety of similar products with as little waste as possible. This layout is
ideal for single-piece and one-touch production methods.

d. Fixed Layout. The fixed-position layout is ideal for manufacturing large
items like ships or airplanes. The product stays in one place, and workers
go to the product.

4. Material-Requirements Planning (MRP)

This is a production planning, scheduling, and inventory control system used to manage the manufacturing process. Most MRP systems are software-based, but you can also do MRP by
hand. An MRP system meets the following objectives;
Ensure availability of materials and products
Maintain the lowest possible material and product levels
Plan manufacturing activities, delivery schedules, and purchasing activities.

Some manufacturing firms use Enterprise Resource Planning (ERP) instead of
MRP. The ERP system provides an integrated and continuously updated view of
core business processes using a shared database. The ERP system tracks cash,
raw materials, and production capacity.

5. Just-in-Time (JIT) Manufacturing

This is a strategy that companies use to increase efficiency and decrease waste by receiving goods only when needed in the production process. The JIT system involves having parts and materials arrive at your warehouse when required. The manufacturer and suppliers work together to prevent JIT from becoming just-isn’t-there. As such, operation
managers must forecast the needed material accurately.

6. Sales and Marketing

The operations of production, marketing, and sales are strongly intertwined. Your manufacturing process should be ready to deliver products in large quantities if the sales revenue grows. Ensure that you have a sales and marketing department to oversee production marketing since the department will make your products known to the customers. This will attract customers to your manufacturing business.

Knowledge and a broad perspective of the manufacturing business are critical to an
efficient manufacturing process. Also, ensure that you stay updated on the current
trends since technology is changing how we do business.


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