Manufacturing is the transformation of raw materials into intermediate products by means of machines, human labor, and chemicals or biological or chemical processing. It forms the essence of secondary industry of the modern economy. Manufacturing includes a wide range of activities related to the design and manufacture of equipment and material used in various processes. Some of the manufacturing industries are automotive, chemical, electrical, optical, petroleum, food, and fabricated metal industries. These manufactures raw materials, products manufactured from these materials, and intermediate products required in the process of various processes. In other words, manufacturing includes the transformation of raw materials into intermediate products.
Industries engaged in the manufacture of finished goods are known as manufacturing industries. The term manufacturing can have diverse meanings according to geographical area, time period, and purpose. In the manufacturing of finished goods, raw materials are transformed into final products by the means of human labor or other specialized equipment, chemicals or biodegradable substances, and other processes. The final goods are sold for revenue in retail markets or in other outlets.
The development of factories and other large-scale manufacturing plants and the method of operation thereof are described in the following. In the early periods, manual labor has to be employed to manufacture most of the items that are produced in large scale. As the development of mass production techniques and improved machinery enable manufacturers to produce more items per hour with fewer laborers, it is now possible to employ only semi-skilled and unskilled labor to produce most of the items that enter the market. Although mass production techniques have enabled manufacturers to substantially reduce costs, the concept of value for money still plays an important role in the operation of most businesses.
Large manufacturers usually engage in the manufacturing of consumer goods such as automobiles, household goods, clothing, shoes, and electronics. In mass production of these items, the items are produced in large quantities, at high levels of production capacity and in a short time. The components are then packed, packaged and shipped to the final destination in a considerable time. Large manufacturers also have access to large numbers of skilled and unskilled labor. In some cases, the two categories of skilled and unskilled labor can be combined in what is known as joint venture manufacturing processes.
The term factory automation refers to the utilization of computerized systems to control all aspects of a manufacturing process. Some types of factory automation systems include Computer Aided Manufacturing (CAM) and Computer Numerically Controlled (CNC) welding and foundry. The term pre-finished products refers to those products that are manufactured on-site before they are delivered to the customer. Most of the finished products that enter the market are already partially assembled. The assembly of these finished products occurs on-site, mostly in a clean room.
Financial analysts consider the manufacturing sector to be a very significant part of the overall economy because almost all of the world’s intermediate goods are manufactured in China. If China is forced to halt its production levels for any reason whatsoever, the United States and the global economy would suffer a great deal. As such, the analysis of this sector requires great attention from financial analysts. By assisting companies in the development of efficient machinery and by assuring the quality of raw materials used, financial analysts can help improve the profitability of their companies.