Manufacturer Definition – A person or company that produces finished goods from raw materials and sells the goods for the production of more complex goods.
What is a Manufacturer?
A manufacturer is a person or business that turns raw materials into finished products using a variety of tools, machinery, and procedures, and then sells those products to consumers, wholesalers, distributors, retailers, or other manufacturers who can use them to make more complicated products.
History of Manufacturing
The economy is said to be significantly influenced by manufacturers. Manufacturing has a long history dating back to antiquity. The usual manufacturer, however, was a single skilled artisan with helpers for many centuries. Each craftsperson guarded the methods of production and only taught apprentices. Only manual processes might be used for production.
For manufacturers, the Industrial Revolution marked a turning point. The invention of new technology (such as steam engines) that allowed for the mechanisation of production, which increased the volume of the items produced, was one of the outcomes of the Industrial Revolution. As a result, during the start of the 20th century, producers began using mass production to create their products.
Nowadays, a successful economy must have manufacturing as a fundamental element. Modern manufacturers are typically thought of as mass producers. Mechanization of manufacturing processes is made possible by technological improvements, which also increase productivity and efficiency as a whole.
Types of Manufacturers
1. Made to Stock (MTS)
Before their ultimate sale, producers who produce to order hold large volumes of their finished goods. MTS companies strive to predict market demand for their products and then manufacture the appropriate amount of items to meet that demand.
The capacity of made-to-stock manufacturers to accurately predict market demand is a key factor in determining their success. They will experience under- or overproduction if the forecast drastically differs from the actual demand.
2. Made to Order (MTO)
Made-to-order producers, in contrast to MTS producers, only create products in response to consumer orders. Forecasting future demand for the products is not necessary due to the nature of MTO manufacture. As a result, MTO enterprises won’t experience overproduction.
However, the lead time between placing an order and having it fulfilled is typically longer for MTO producers. Additionally, a sudden rise in the items’ existing demand tends to place additional strain on the operations, which will result in even longer lead times.
3. Made to Assemble (MTA)
Made-to-assemble producers first produce the fundamental components of a final good that may be rapidly put together when a customer order is received, as opposed to creating the final good right away. Lead times for client orders are greatly shortened by MTA production. However, the company can encounter decreasing demand for several sorts of fundamental components.