Product manufacturing is a process that involves the creation and assembly of various components to come up with a complete product that consumers can buy and use. The process of manufacturing is the main difference between simply having a business idea and a product for sale. Without this process, your idea cannot really make you any money.
Types of Manufacturing Strategies
Manufacturing can be done in three major ways. The strategies used will depend on the future buying trends of consumers or their specified requirements.
1. Stock-Based Manufacturing
Make-to-stock manufacturing is the product manufacturing process that is based on forecasts and future buying trends of consumers. You will be required to make products which will then be stocked by distributors and retailers without any assurance that consumers would purchase them.
If you get your forecasts right, stock-based manufacturing can bring in a lot of money since there will be no waiting time for customers. On the other hand, if your forecasts are wrong, your manufactured products will remain on the shelves and you will incur losses.
2. Order-Based Manufacturing
Make-to-order manufacturing is the product manufacturing process that is based on specific customer requirements. This process is usually a demand-driven one, wherein the manufacturer only makes what the customer orders, as opposed to making something that people may not like.
Order-based manufacturing may be more expensive because you have to get the client specifications right. It will also require clients to wait for longer to get their products. However, this manufacturing strategy is a good one because the chances of incurring losses are lower since you will only make what the market needs.
3. Assembly-Based Manufacturing
Make-to-assemble manufacturing is the product manufacturing process that marries the order-based and the stock-based manufacturing processes. This manufacturing strategy involves manufacturing various components of a product based on buyer trend predictions. You then have to wait until your customers place their orders before assembling a customized product.
Assembly-based manufacturing is a good strategy to use if you want to reduce the production time and take advantage of possible high demand in the future. Your risk of incurring losses is relatively lower when compared to stock-based manufacturing, but still higher than order-based manufacturing. If the demand is lower than anticipated, you can simply assemble the remaining components into what is needed when the demand rises again.
Product Manufacturing Options
Where product manufacturing is concerned, you can either outsource the job or do it yourself.
1. Outsourcing Product Manufacturing
If you want to sell a product and do not want to deal with production hassles, you can simply outsource the product manufacturing aspect of your business. In that case, you could simply collaborate with a reliable manufacturer who will then be responsible for production depending on the orders placed on your business.
Product manufacturing outsourcing is usually a more convenient way of doing things. However, this option will eat into your business profits.
2. Becoming the Product Manufacturer
If you identify a need in the market and have a business idea that you think can work, you can become your own product manufacturer. This option is less convenient but allows you to retain control over all aspects of product manufacturing. If you like maintaining that kind of control, starting your own manufacturing plant may be the best option for you.
There is no one-size-fits-all solution to any product manufacturing challenge. You need to find a manufacturing option and approach that works for your business needs and simply go for it!