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Textile factory (Germany, circa 1975).

Manufacturing is the production of merchandise for use or sale using labour and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be used for manufacturing other, more complex products, such as aircraft, household appliances or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users – the "consumers".

Manufacturing takes turns under all types of economic systems. In a free market economy, manufacturing is usually directed toward the mass production of products for sale to consumers at a profit. In a collectivist economy, manufacturing is more frequently directed by the state to supply a centrally planned economy. In mixed market economies, manufacturing occurs under some degree of government regulation.

Modern manufacturing includes all intermediate processes required for the production and integration of a product's components. Some industries, such as semiconductor and steel manufacturers use the term fabrication instead.

The manufacturing sector is closely connected with engineering and industrial design. Examples of major manufacturers in North America include General Motors Corporation, General Electric, Procter & Gamble, General Dynamics, Boeing, Pfizer, and Precision Castparts. Examples in Europe include Volkswagen Group, Siemens, and Michelin. Examples in Asia include Sony, Huawei, Lenovo, Toyota, Samsung, and Bridgestone.

History and development[edit]

Assembly of Section 41 of a Boeing 787 Dreamliner
A female industrial worker amidst heavy steel semi-products (KINEX BEARINGS, Bytča, Slovakia, c. 1995–2000)
  • In its earliest form, manufacturing was usually carried out by a single skilled artisan with assistants. Training was by apprenticeship. In much of the pre-industrial world, the guild system protected the privileges and trade secrets of urban artisans.
  • Before the Industrial Revolution, most manufacturing occurred in rural areas, where household-based manufacturing served as a supplemental subsistence strategy to agriculture (and continues to do so in places). Entrepreneurs organized a number of manufacturing households into a single enterprise through the putting-out system.
  • Toll manufacturing is an arrangement whereby a first firm with specialized equipment processes raw materials or semi-finished goods for a second firm.

Manufacturing systems: changes in methods of manufacturing[edit]

Industrial policy[edit]

Main article: Industrial policy

Economics of manufacturing[edit]

According to some economists, manufacturing is a wealth-producing sector of an economy, whereas a service sector tends to be wealth-consuming.[1][2] Emerging technologies have provided some new growth in advanced manufacturing employment opportunities in the Manufacturing Belt in the United States. Manufacturing provides important material support for national infrastructure and for national defense.

On the other hand, most manufacturing may involve significant social and environmental costs. The clean-up costs of hazardous waste, for example, may outweigh the benefits of a product that creates it. Hazardous materials may expose workers to health risks. These costs are now well known and there is effort to address them by improving efficiency, reducing waste, using industrial symbiosis, and eliminating harmful chemicals.[3] The increased use of technologies such as 3D printing also offer the potential to reduce the environmental impact of producing finished goods through distributed manufacturing.[4]

The negative costs of manufacturing can also be addressed legally. Developed countries regulate manufacturing activity with labor laws and environmental laws. Across the globe, manufacturers can be subject to regulations and pollution taxes to offset the environmental costs of manufacturing activities. Labor unions and craft guilds have played a historic role in the negotiation of worker rights and wages. Environment laws and labor protections that are available in developed nations may not be available in the third world. Tort law and product liability impose additional costs on manufacturing. These are significant dynamics in the ongoing process, occurring over the last few decades, of manufacture-based industries relocating operations to "developing-world" economies where the costs of production are significantly lower than in "developed-world" economies.

Manufacturing and investment[edit]

Capacity utilization in manufacturing in the FRG and in the USA

Surveys and analyses of trends and issues in manufacturing and investment around the world focus on such things as:

  • the nature and sources of the considerable variations that occur cross-nationally in levels of manufacturing and wider industrial-economic growth;
  • competitiveness; and
  • attractiveness to foreign direct.

In addition to general overviews, researchers have examined the features and factors affecting particular key aspects of manufacturing development. They have compared production and investment in a range of Western and non-Western countries and presented case studies of growth and performance in important individual industries and market-economic sectors.[5][6]

On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand.[7] Further, while U.S. manufacturing performs well compared to the rest of the U.S. economy, research shows that it performs poorly compared to manufacturing in other high-wage countries.[8] A total of 3.2 million – one in six U.S. manufacturing jobs – have disappeared between 2000 and 2007.[9] In the UK, EEF the manufacturers organisation has led calls for the UK economy to be rebalanced to rely less on financial services and has actively promoted the manufacturing agenda.

Countries by manufacturing output using the most recent known data[edit]

Data is provided by Worldbank.[10][11] It shows the total value of manufacturing in US dollars for its noted year.

Rank Country/Region (Millions of $US) Year
 World 11,917,240 2013
1  China 2,922,520 2013
9999999  European Union 2,312,723 2013
2  United States 1,943,810 2013
9999999 Logo European Central Bank.svgEurozone 1,793,895 2013
3  Japan 904,590 2013
4  Germany 771,183 2014
5  South Korea 389,581 2014
6  India 325,246 2014
7  Italy 299,017 2014
8  France 283,663 2014
9  Russia 267,591 2013
10  United Kingdom 246,900 2014
11  Brazil 218,802 2014
12  Mexico 216,066 2014
13  Indonesia 186,743 2014
14  Spain 168,995 2014
15  Canada 162,074 2010
16  Turkey 126,344 2014
17   Switzerland 123,855 2013
18  Thailand 121,677 2014
19  Netherlands 96,953 2014
20  Australia 92,768 2014

Manufacturing processes[edit]



See also[edit]


  1. ^ Friedman, David (2006). "No Light at the End of the Tunnel". Los Angeles Times. New America Foundation. Retrieved 2007-05-12. 
  2. ^ Joseph, Keith (1976). "Monetarism Is Not Enough". Center for Policy Studies. Margaret Thatcher Foundation. Retrieved 2007-05-12. 
  3. ^ For example, entire academic journals such as The Journal of Cleaner Production and The Journal of Industrial Ecology dedicated to reducing environmental impact of manufacturing.
  4. ^ Megan Kreiger and Joshua M. Pearce (2013). Environmental Life Cycle Analysis of Distributed 3-D Printing and Conventional Manufacturing of Polymer Products, ACS Sustainable Chemistry & Engineering, DOI: 10.1021/sc400093k Open access.
  5. ^ Manufacturing & Investment Around The World: An International Survey Of Factors Affecting Growth & Performance, ISR Publications/Google Books, revised second edition, 2002. ISBN 978-0-906321-25-6.
  6. ^ Research, Industrial Systems (2002-05-20). "Manufacturing and Investment Around the World: An International Survey of Factors Affecting Growth and Performance". ISBN 978-0-906321-25-6. 
  7. ^ Bailey, David and Soyoung Kim (June 26, 2009).GE's Immelt says U.S. economy needs industrial renewal. UK Guardian. Retrieved on June 28, 2009.
  8. ^ Brookings Institution, Why Does Manufacturing Matter? Which Manufacturing Matters?, February 2012
  9. ^ "Factory jobs: 3 million lost since 2000". April 20, 2007.
  10. ^ "Manufacturing, value added (current US$)". access in February 20, 2013.
  11. ^ "Manufacturing, value added (current US$) for EU and Eurozone". access in February 20, 2013.


  • Kalpakjian, Serope; Steven Schmid (August 2005). Manufacturing, Engineering & Technology. Prentice Hall. pp. 22–36, 951–988. ISBN 0-13-148965-8. 

External links[edit]