New Definition of Manufacturing

Manufacturing is derived from Latin words combined as ‘manufactus’, meaning handmade. This definition of manufacturing was appropriate at the time when it was coined, but not anymore. The definition as given in many text books says manufacturing is, ‘conversion of raw materials into finished goods’.

This definition of manufacturing is better, but not adequate in today’s scenario. Till a few decades back any organisation which had capacity and skills to convert raw materials to finished products was labelled as a successful manufacturing firm. As competition grew and markets expended from local to global, the manufacturing scenario is driven due to ‘pull’ of customer and not due to ‘push’ by manufacturer as was the case a few decades back. Customer centric manufacturing has also led to high competition among manufacturing industries to deliver smarter products faster, cheaper and better.

Another major shift in manufacturing which can be seen is that most of the major manufacturing industries engage in very little in house manufacturing. They depend on large number of suppliers who are geographically distributed and supply parts and sub-assemblies, which are then assembled, tested and marketed. In other words, manufacturing is a collaborative activity involving large supply chains. This new paradigm of manufacturing calls for integration of people, capital, processes, systems and enterprises, and in this context, manufacturing is more of planning than a mere physical activity. Keeping this in mind; the new definition of manufacturing can be stated as, ‘Manufacturing is to plan and deploy an optimum way of transformation of raw material into goods by integration of people, capital, processes, systems and enterprises to deliver products of value to society’.

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