Manufacturing & Industrial Goods
Manufacturing & Industrial Goods
Manufacturing is the organised activity devoted to the transformation of raw materials into marketable goods. The manufacturing system usually employs a series of value-adding processes to convert raw materials into more useful forms, and eventually into finished products. The outputs from one manufacturing system may be utilised as the inputs to another. A manufacturing system is, therefore, a typical input-output system, which produces outputs i.e. finished products through activities of transformation from inputs (raw materials).
Every manufacturing industry is plagued by its own supply chain constraints depending upon the kind of raw material required, their sourcing location, market etc. Commodities which are of low value and high bulk in nature have their outward freight accounting for a huge portion of the total manufacturing cost. In addition, raw material transportation also adds to the total costs in a big way in all such commodities. In this scenario, the location of the manufacturing plant becomes crucial.
While deciding on the plant location, there is a trade-off between proximity to raw material sources and proximity to markets. The plant also has to address issues of logistics (evacuation of product by rail, road or waterways), power availability in the region, and availability of materials. On the other end of the spectrum are high valued goods where the challenge is to keep innovating and improving the product and at the same time keep the prices down. In such a scenario, product life cycle takes on a whole new meaning with decreasing lead times, JIT and Lean manufacturing etc. Since, the location of the manufacturing plant is driven by the proximity of the raw material availability, there are bound to be regional disparities in terms of the to
Last Updated On:10/14/2008 11:38:03 AM
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