What Is a Manufacturing Business? – Definition & Examples – Video & Lesson Transcript | Study.com

Aaron has worked in the financial industry for 14 years and has Accounting & Economics degree and masters in Business Administration. He is an accredited wealth manager.

Definition of a Manufacturing Business

Although you don’t shop directly at these locations, many of the products you use every day come from a manufacturing business! Look around your home or apartment. The television, the phone sitting next to you, and the computer you’re using right now are all products that were assembled and created as part of a manufacturing business. The tires on your car and the picture frame hanging on the wall were also most likely produced by this type of business.

A manufacturing business is any business that uses components, parts or raw materials to make a finished good. These finished goods can be sold directly to consumers or to other manufacturing businesses that use them for making a different product. Manufacturing businesses in today’s world are normally comprised of machines, robots, computers, and humans that all work in a specific manner to create a product.

Manufacturing plants often use an assembly line, which is a process where a product is put together in sequence from one work station to the next. By moving the product down an assembly line, the finished good can be put together quicker with less manual labor. It’s important to note that some industries refer to the manufacturing process as fabrication.

Manufacturing businesses can be very simple, with only a few parts required for assembly, or they can be very complicated, with hundreds of parts needed to create a finished product. Compared to other businesses, manufacturing businesses usually have more legal regulations and environmental laws to deal with. These things can range from scrutinized labor laws to environmental and pollution issues. Although labor unions are not as common as they were 50 years ago, they still heavily exist in the manufacturing industry, where wages, benefits, and other rights are negotiated. Let’s take a look at a few examples of manufacturing businesses.