Manufacturing is basically the conversion of raw materials into full-fledged products that are sold in the market. For a thriving economy, a healthy manufacturing industry is essential. Due to the rapid growth of technology, there's a shift in the country's economy toward service provision. However, nearly every area of the economy requires a healthy manufacturing industry.

Manufacturing Industry Definition

Manufacturing is the production of goods by transforming raw materials into finished products. The conversion process can be by means of labour and tools, chemical or biological processing, or formulation. Besides, some industries may involve manufacturing by hand, like baked goods, hand-crafted jewelry, etc. Manufacturing is the essence of the secondary industry.

What Manufacturing Industries Do:

The process of production of tangible goods is manufacturing. The manufactured goods vary according to various companies and industries. Though there is a place for hand-made products in the market, most manufacturing companies exploit machinery and industrial equipment for production en masse. The manufacturing process involves value creation, meaning the less valuable input commodities and raw materials are transformed into more valuable output, i.e. products. For example, any of the wood components of the tree is not valuable on their own. But when the timber is formed into different kinds of furniture, value is added.

Before the industrial revolution, human labour was exploited to manufacture goods by hand. The industrial revolution made mass production possible with less waste of time due to the introduction of machinery and equipment. This caused the manufacturing of goods to be more precise and drastically drove down the price to the cost within reach of the general public. In addition, the introduction of the assembly line and conveyor belt skyrocketed production and caused a substantial change in the manufacturing industry.  

Today's technological advancement has contributed to a considerable increase in production over the last decade. Thousands of goods can be produced instantly. Computer technology brings about a faster and more efficient way to assemble, test, and track production. The rapid growth of technology also results in the cost-effective manufacture of items. However, automation also causes unemployment.

Why Manufacture Industries Matter:

The United States remains highly competitive in the field of manufacturing, which in turn provides commercial innovation and high-wage jobs. The U.S has a history of sustaining one of the largest manufacturing sectors, which caused the nation to keep money flowing seamlessly into the economy. Since manufacturing contributes about 75 percent of all privately funded research and development in the country, it propels the nation's innovation and forward-thinking. Today, the U.S continues to be at the forefront of the manufacturing industry, chief among aerospace, chemical, and automobiles.

Manufacturing industries are one of the few industries that don't demand an advanced degree for a worker. Hence factory jobs as middle-class-job facilitate earning above-average wages. The manufacturing industry, being one of the largest employment sectors in the country, provides many middle-class families means to earn their living wage. The industry also holds up roughly 1-in-6 service jobs. The industry demands the need for lawyers, accountants, doctors, financial advisors, and other service professionals.

Many industries contribute to the manufacturing industry, either directly or indirectly. Construction, transportation, printing, and engineering are a few examples. We need an engineer to build a new factory along with an architect and a construction crew. The products made in a factory have to be transported to stores. Without engineers and product designers, and a research and development team, new products will not hit the marketplace. Manufacturing industries are deeply intertwined with the world economy, as countless companies would cease to exist without manufacturing.

Some economists believe that the U.S is moving into a post-good economy, while others make their point that manufacturing will continue to grow along with the evolution of technology. Hence it is quite clear that economists are not in consensus on whether the manufacturing sector will continue to thrive or decline. It is more important to hire engineers than blue-collar workers as manufacturing jobs are becoming highly skilled in technical jobs. Though the future of the manufacturing industry is unpredictable, it is apparent that manufacturing has an important role in both the economy and the labour force.

The Difference between Production & Marketing

Though in simple conversation, people use the terms "production" and "manufacturing" interchangeably, they don't refer to the same thing. Technically, these two are distinctly different from each other.

What is Production

Production refers to the process of creating consumable utilities using material and non-material utilities. In simple words, it is a process used to produce consumer goods from raw materials with human effort.

One way of illustrating how the production process is used to create consumable utilities is to follow the path of Salty Sombrero corn tortillas:

We start with the cultivation and harvesting of corn to produce tortillas. Then, the corn is soaked in an alkaline solution to improve its malleability and taste. It is then dried and ground into flour. The dough is created by mixing water and salt, which is kneaded to form individual balls. Each ball if flattened to cook. Then the finished tortillas are sent to the distribution center and, from there, finally transported to grocery stores.

The output created from inputs of raw materials and human labour is a utility in this example. But sometimes, not all utilities produced are ready for consumption as they can be parts or ingredients that customers use to create the final products.

What is Manufacturing?

Production and manufacturing are two different concepts related to micro and macro processes.

Manufacturing is specifically a type of production that involves machinery. Manufacturing generally is a man-machine set-up, though certain goods are manufactured using human labour only.

Production Vs Manufacturing

Manufacturing is one of the production methods. Production is a broader term that involves other production methods besides manufacturing, such as development, assembly and processing.

    In the tortilla production example, we see that all steps occurred within a Salty Sombrero manufacturing ecosystem. Thus the process involved as a whole can be referred to as manufacturing. Hence, in the example of tortilla, it is hard to distinguish between manufacturing and processing. In the case of manufacturing a product on a large scale, there may be an overlap between processing and manufacturing. However, the key difference between manufacturing and processing is that it is technically the act that changes the food's chemical makeup, while manufacturing involves all the acts that transform raw materials into consumable products.