What is a Manufacturing Business? An A to Z Guide of a Manufacturing Business

. 7 min read
What is a Manufacturing Business? An A to Z Guide of a Manufacturing Business

What does Manufacturing mean?

Manufacturing is the process of large-scale manufacturing of products using human labour and machinery to process raw materials, pieces, and components into finished goods. The finished items may be offered to end customers or to wholesale suppliers or other distributors, who either sell them to supermarkets or use them to produce more complex products.

What is a Manufacturing Business/Company?

A manufacturing sector assembles finished products from raw materials, pieces, and modules. Manufacturing companies often utilise devices, robotics, computers, and people to create their products. They often use an assembly line, which allows a product to be assembled phase by phase as it moves from one workspace to another.

Importance of Manufacturing Business - The manufacturing industry is regarded as the bedrock of growth in general and industrial development in our country due to the following reasons:

  • Manufacturing industries contribute to agricultural modernisation and alleviate people's reliance on agrarian income by generating employment in secondary and tertiary industries.
  • Economic growth is essential for our nation to eliminate unemployment and poverty. It was the guiding principle behind India's public sector industries and joint sector ventures. Additionally, it sought to reduce regional inequalities by developing factories in tribal and underdeveloped regions.
  • Exporting imported products helps to increase trade and commerce while still bringing in much-needed foreign currency.
  • Prosperous countries turn their raw resources into a diverse array of final products at a higher valuation.
  • Manufacturing sectors also aided in the eradication of hunger and unemployment.
  • It also aided in the development and expansion of the economy.

Budget 2021 presents an opportunity to mobilise the skills necessary to enact structural changes and strengthen manufacturing structures to contribute 25% of GDP by 2025.

Types of Manufacturing production- The three main types of manufacturing production are:

  • Make-to-stock (MTS)
  • Make-to-order (MTO)
  • Make-to-assemble (MTA)

Make-to-stock: Make-to-Stock (MTS) is a conventional manufacturing approach that forecasts customer demand and plans development output using sales history data. It is most effective where a predictable market exists for a commodity, such as toys. This approach’s disadvantage is that it predicts potential demand using historical evidence, which raises the risk of forecasts being inaccurate, leaving the producer with excess or insufficient inventory.

Make-to-order: The make-to-order (MTO) approach enables consumers to order items tailored to their requirements, which is highly beneficial for highly customised goods. Computers and computing accessories, cars, construction machinery, and other high-ticket pieces are also examples of make-to-order products. Businesses may use MTO to resolve inventory issues, but the consumer wait period is typically much longer. This demand-driven approach is not relevant to all commodity groups.

Make-to-assemble: MTA is a technique that focuses on market forecasting to store the specific components but begins assembly after the order is issued. The benefit of this approach is that it enables rapid product customisation in response to consumer demand. For example, the restaurant industry, which stocks various raw materials in advance, only starts assembling upon acceptance of a consumer request. Customers can tailor their items to get them faster when the vendor has the core components on hand, but if orders do not come in, the supplier is left with an inventory of obsolete parts.

man adjusting the object on the conveyer belt

Manufacturing Business examples

The examples of manufacturing companies are bakeries, shoemakers, tailors, automotive companies etc. since they all manufacture goods rather than delivering services.

  • List of Top-Notch Manufacturing Companies in India

Please note that the list is based on 2020 sales.

  • UltraTech Cement Ltd: UltraTech Cement Limited is India's largest producer of grey cement, ready-mixed concrete (RMC), and white cement. Additionally, it is a world leader in the production of cement.
  • UPL Ltd: UPL is in the sector of manufacturing and selling agrochemicals, agricultural chemicals, petroleum intermediates, and growing and selling field crops and vegetable seeds.
  • JSW Steel Ltd: JSW Steel started in 1982 with a single plant and has evolved to become India's largest producer of high-grade steel items. Karnataka, Tamil Nadu, and Maharashtra are among the states where the company operates factories.
  • Maruti Suzuki India Ltd: In 1981, the Company was founded. In 1982, the Government of India and Suzuki Motor Corporation (SMC) of Japan entered into a joint venture arrangement. The Company has evolved to become SMC's largest affiliate in terms of manufacturing volume and revenue.
  • Mahindra & Mahindra Limited: Mahindra & Mahindra Ltd., a mobility device and farm solution provider, is Mahindra Group's flagship business. The company's product and service portfolio include SUVs, hybrid cars, pickup trucks, recreational vehicles, tractors, two-wheelers, and construction machinery.
  • Tata-Steel Ltd: Tata Steel was established in India in 1907 as Asia's first integrated private steel firm. Tata Group owns the business. Tata Steel is Europe's second-largest steelmaker, with a crude steel manufacturing capacity of more than 12.1 million tonnes per annum. It is India's largest steel company.

What is Manufacturing Operations Management?
Manufacturing operations management is a broad term that encompasses the techniques and processes used to optimise output, which involves handling company capital such as personnel, technologies, machinery, and other properties that lead to the manufacturer's production and productivity.

How to start a manufacturing business?

The guidance for preventing pitfalls throughout the transformation from concept to a marketable product:

Step1- Overall estimation: You must have the overall idea about your business

  • Do I have what it takes to own a manufacturing business?
  • What kind of substance am I going to manufacture?
  • How can I safeguard my product rights?
  • Which manufacturing method is the most efficient for my product?
  • How much would the commodity cost to manufacture?
  • What is the demand for my product, who will purchase it, and how will I market it?
  • How do I obtain financing for my business? Etc.

Step2 - Product Choice: Choosing the best product is the most critical aspect of manufacturing industry growth. When you decide what you want to manufacture, you can analyse your product and move on to the next phase. Develop a place in the market. An in-depth review of the costs you're expected to face at every phase can aid in your decision making.

Step3 - Target Audience: It is important to understand who would purchase the goods. Conduct ample analysis to determine your target audience. This will assist you in creating a successful communications plan for approaching them. Your commodity and market share also influence which path to take in sales. If your product has a niche demand, you can sell directly to consumers; if your product has a wider audience, you will sell wholesale.

Step4- Monetary Support: Without financial help, no manufacturing company will develop. This financial requirement can be divided into the following stages:

  • Bank Loan: Bank loans are typically the default option when seeking financing for your company.
  • Venture Capital: Investors collect funds for start-ups and small companies considered to have long-term development capacity. It is a critical method for raising capital.
  • Angle Investments: These investors finance start-up businesses. They will also help you develop a marketable strategy. Many profitable companies have begun with angel capital investment, though it could boost the company’s stake.

Step5 - Costing: There are several cost categories, such as fixed costs, variable costs, and indirect costs. Analysing your spending will make you do your work better. Also, it can allow you to get the best value in the industry.

  • Direct Cost: There are production-related expenses, which involve the payment of raw materials, labour, machinery, and supplies. Direct expenses such as fuel and electricity are also included.
  • Indirect Cost: These involve administrative expenses, plant overheads, and utility costs, and others. Equipment and facility depreciation are also called indirect expenses.
  • Variable Cost: There are varying costs that vary according to the output amount. They increase in response to an increase in demand and decrease in response to a reduction of output.
  • Fixed Cost: Fixed costs are those that stay stable regardless of the volume of output. It involves capital expenditures on infrastructure, equipment, and supplies.
man controlling the machine with the tablet in his hands

Step6 - Policies: There are several different industrial sectors, all of which have other laws and regulations that affect how they run. You must research the numerous Acts and regulatory bodies that relate to your company.


Manufacturing provides products for the marketplace, and it still acts as a critical driver for the economy. In the future, as manufacturing methods grow, so will the necessary skills. Supply and demand have to be carefully balanced and the willingness to read the business expectations to be met.

Also Read:

1) Profitable Small Businesses Worth Starting in 2021
2) What Business Can I Start With 5 Lakhs in a Small Town?
3) Best Businesses You Can Start with No Money
4) OkCredit: Simple, Paperless & Secure solution for businesses


Q. How many types of manufacturing industry are there?

Ans. There are two types of manufacturing industries.

  1. Agro-based Industries- Cotton, jute, silk, sugar, etc
  2. Mineral-based Industries- Iron & Steel, Cement, aluminium, etc

Q. How can technology be used in manufacturing?

Ans. Sophisticated technology, such as artificial intelligence, the internet of things, and 3-D printing, are reshaping the future of manufacturing by decreasing development costs, increasing operational speed, and reducing errors.

Q. How does technology help manufacturing?

Ans. There are many advantages in adopting new technologies into the production process as it helps increase production efficiency in the manufacturing chain.  

Q. What are the different types of manufacturing industries?

  • Clothing & Textiles
  • Electronics, Computers and Transportation
  • Food Production
  • Metal Manufacturing
  • Wood, Leather and Paper Manufacturing