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Manufacturing in Supply Chain Management: Introduction to Manufacturing Processes, Planning, and Control
Manufacturing (the act of making finished goods from raw materials) is an important process to consider in supply chain management. For many companies, manufacturing is one of the most costly and capital intensive business processes in the supply chain.
There are two primary types of manufacturing.
- Craft manufacturing
- Mass manufacturing
Craft manufacturing describes products manufactured by hand. Because they’re done by hand, no two products are exactly the same (they’re unique). The handmade products available for purchase on a site like Etsy are good examples of craft manufacturing.
Mass manufacturing describes products produced “assembly line” style by machines programmed to produce numerous identical copies of a design specification. This is by far the most common manufacturing method for making consumer goods like clothing, and is also the prevalent manufacturing technique in heavy industry.
The Types of Manufacturing Processes: Project, Job Shop, Batch, Line, and Continuous Flow
Depending on the industry and specific task at hand, a business can utilize any one of five primary manufacturing methods:
- Job Shop
- Continuous Flow
Project manufacturing is a one-off manufacturing process. Manufacturers will utilize a project process to make “items” with very specific requirements. “Items” is in quotation marks because project manufacturing generally refers to projects that are stationary – like a football stadium, a house, or a highway. Assembly takes place on site.
Job shop manufacturing is a one-off manufacturing process in which the manufacturer builds a specific (movable) product to unique customer specifications. This process is used by many supercar manufacturers – for example, the Hennessey Venom recently purchased by Aerosmith frontman Steven Tyler wasn’t just mass manufactured and shipped to a car dealership. It was, over the period of a year, built to his exact specifications.
Batch manufacturing is a process wherein similar items go through a process with a series of steps – for example, in a clothing manufacturer, the steps could be dying, cutting, and sewing.
Line manufacturing is the process most often used by equipment or “heavy industry” manufacturers. Raw materials are transformed into (variable) final products by going through a set sequence of operations. This is the method used to produce cars and appliances. Manufacturing lines either follow a U shape or a circle shape.
Continuous flow manufacturing is the process of sending raw materials through a continuous sequence of steps. It is used by companies that don’t produce quantifiably discrete products – that is, products that are liquid or gaseous in nature. This is the method used by oil companies.
Choosing a Manufacturing Process
The specific manufacturing process use is often determined by the needs of the business. However, under certain circumstances, multiple setups could work.
If a choice is to be made, it’s important to consider the effect of a certain process on four different categories: man (workers), machine, method, and materials. Project manufacturing and continuous flow manufacturing are extrema on a continuum, and factors change as a company travels from one side to the other. For example, as a business travels towards continuous flow, the requirement for manual labor decreases (because of increasing mechanization). Similarly, the ability to customize products decreases, as the continuous flow promotes standardization.
Manufacturing Management: Master Production Scheduling and Materials Requirements Planning
Master Production Scheduling (MPS) and Material Requirements Planning (MRP) are important concepts in manufacturing management. They’re the primary tools used to control manufacturing in the supply chain.
A Master Production Schedule incorporates customer orders (or demand forecasts) for end products to create a manufacturing schedule that will allow the business to fulfill all orders and/or demand. The MPS is the manufacturing plan for the factory. The plan is updated based on new demand forecasts or orders.
Related to the MPS is the process of Materials Requirement Planning. Once it has been determined how much production the factory will undertake in a certain period of time, business managers need to procure the correct quantity of raw materials to fulfill the production needs. (You can’t manufacture products without materials.) MRP takes two documents into account: the Bill of Materials (BOM) which is essentially a product blueprint describing what you need to make it, and the Inventory File, which describes how much inventory is on hand.
Manufacturing Management: Further Reading
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