Production Processes

The Essentials

The essentials to the production process include: capital, land, and organization.  Form Utility is the value producers produce materials in the creation of goods and services.  Manufactures take raw materials and change into a final products.  Service providers provide services to patrons.  Production processes have three requirements:

  1. Build and Deliver products in response to demand
  2. Provide a quality level
  3. Provide at low cost

Process manufactures alter materials on a chemical or physical level.  Assembly processes combines goods together into a finished product.  Production processes can occur over an extended run, or short run (continuous or intermittent).  Chemical companies tend to be continuous, while intermittent processes change up equipment for different orders.

Production operations take inputs like land, labor, capital, entrepreneurship, knowledge.  Inputs, processes applies controls like planning, routing, scheduling, dispatching, follow-up.

Production Strategies

Improve Techniques

Firms intend to supply High-Quality goods and services according to demand.  Design capabilities go into improving equipment, production time, quantity per yield, and cost of supplies.  Manufactures now work towards the success with several strategies.

Computer-Aided Design

Computer-Aided Design and manufacturing help customize products to meet demand at low cost.

Flexible Equipment and Machine Layouts

Means extension of utility of of machines to conduct multiple tasks.  Firms work to significantly decrease turnaround time from the moment an order is received.

Lean Manufacturing

Is the process to produce goods using less of everything, or yield more.  Less human labor, space, investment, time, and effort towards development.  One common need is to reduce inventory significantly as finished products are not lying around, but raw materials to make new ones.


Manufacturer tailors products to meed the demand of the market.  Firms work towards real time significant customer customization.  Until then, car manufacturers are the first to  popularize the ability to create customized products from made parts.


Industrial robotics do not need to be paid, provided healthcare, receive work limitations, require less insurance premiums, and overall cost less than human labor.  Automation programs, software and robotics can provide the lowest costs for manufacturers.

Cut Costs

Production processes start with an emphasis on economies of scale.  Firms produce a limited quantity of goods in bulk to lower costs.  Firms also have to hold raw inventory materials in house to anticipate demand.  Costs are important to cut, otherwise other firms may have opportunity to grab market share.  This became a problem with manufacture operations in the  United States, as international companies could obtain better production technology and use cheap labor to build their advantage, and lower their costs in comparison to firms in the United States.

Mass Customization

Make an item unique to different demands.  The Customer can choose model, size, color, design, and special functionality.  Adidas and M&M’s have already custom manufacture functions.

Advance Manufacture processes are driven by computers and software more and more everyday.  Sensors help measure, data mine and establish controls on production processes.

Production Requirements

Facility Location

Location of facilities is vital to obtain efficient and competitive distribution chains.  Firms try to be near major distribution vehicles, such as planes, trains, and trucks.  Layout and organization are vital to online ventures.  Search Engines rank websites on their organization structure.

Materials Requirement Planning

Computer based software systems can cooperate with operations to manage sales forecast and inventory purchases.  Computer systems can manage order fulfillment operations to assist in inventory planning.  Inventory planning, that can have less waste and be more responsive to demand.  Most firms today invest in a custom company software, a huge asset for any company to have.  Entrepreneurs have many options to outsource key functions as many software companies charge a small fee for their use.


Manufacturers used to rely on many suppliers, but now relationships between manufacturers and suppliers are closer and exclusive to help protect intellectual property and consolidate capital to one more sustainable supply chain.

Just In Time Inventory Control

One major costs of wastes happens with inventory.  When a market sees saturation of a product we see a new model takes it place, when inventory ages out, becomes obsolete it sits in inventory as a lost.

Quality Control

Different technologies assist in unique measures of quality control.  Beverage container manufacturers use flashes of light to verify cans do not have any leaks or differences in thickness of construction.  Water Desalination plants uses permeable barrier filters to remove particulates and chemicals to kill bacteria, later removing bacteria from treated water.  More technologies will be introduced to create better quality manufacture operations.  As an entrepreneur, we hope you are one of them.




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