What is Manufacturing?
Manufacturing is the making of goods by hand or by machine that upon completion the firm sells to a customer. Items used in manufacture may be raw materials or component parts of a larger product.
The manufacturing usually happens on a massive scale manufacturing line of machines and skilled labour.
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Types of Manufacturing Processes
Manufacturing is a really simple business; the owner buys the raw material or component parts to make a finished product. To be a company the manufacturer should cover costs, meet demand and generate a product to offer the market.
A mill operates one of 3 Types of manufacturing production:
- Make-To-Stock (MTS) — A factory produces goods to stock stores and showrooms. By calling the marketplace for their goods, the manufacturer will plan production activity beforehand. If they create a lot of they may want to sell surplus at a loss and in creating too little they may miss the current market, not sell enough to cover costs.
- Make-To-Order (MTO) — The manufacturer waits for orders before manufacturing stock. Inventory is far easier to control and the owner does not need to rely as much on market demand. Customer waiting time is more though and the manufacturer requires a steady stream of orders to keep the mill in creation.
- Make-To-Assemble (MTA) — The mill produces component parts in anticipation of requests for assembly. Using this technique, the manufacturer is going to fulfill customer requests but if orders do not materialize, the producer will have a stock of pieces that are undesirable.
Maintaining Risks Under Control is Crucial
With all three types of manufacturing there are risks. Supply too much and you flood the market, causing a drop in price and a drop in earnings. By not fulfilling demand, the customer may go elsewhere using a drop in earnings to the manufacturer. Quality control is also a massive part in successful manufacturing.
The manufacturer will need to keep a close eye on quality of product from beginning to end, with many tests along the way. If mistakes happen, the long-term consequences may be serious.
A manufacturing company may need many parts for the intricate assembly of an superb product or just the couple for producing simple great. Maintaining manufacturing costs to a minimum, having great excellent management and superior sales management are crucial to reducing the threat in any kind of manufacturing.
Stock Keeping Unit (SKU)
What is a Stock Keeping Unit (SKU)?
SKU (pronounced”skew”), short for stock keeping unit, is used by retailers to identify and track its stock, or inventory. A SKU is a particular code consisting of letters and numbers which identify characteristics about each product, such as manufacturer, brand, style, color, and size.
Companies issue their own different SKU codes unique to the great and services it sells. Two companies selling exactly the same thing, such as yoga pants, would likely issue two different internal SKUS.
The purpose of SKUs is to help companies more accurately and quickly account for each and every bit of their stock. They are different from version numbers, but model numbers could be incorporated into a SKU if a provider so chooses.
Where SKUs are Employed
You will typically find SKUS Being Used in:
- Retail stores
- Product fulfillment centers
How SKUs are Formed
Businesses have their own systems for generating unique SKUs, but there is always a specific method involved.
A SKU for a pair of purple Ugg boots in the Bailey Bow layout, size 7 might look something like this: UGG-BB-PUR-07.
Or a bottle of Tropicana orange juice, no pulp variety, in an 89-ounce plastic jar could be issued a SKU by a corner bodega that reads: TROP-NP-PLAS-89.
There is absolutely no established means to create a SKU, but firms that produce their own system will wish a method which everyone knows and follows, therefore it’s not tough to decipher the code. SKUs are human readable, meaning you don’t need any equipment to read and break down the code.
What a SKU Is Not
SKUs are occasionally regarded as interchangeable with UPC bar codes, but they are not. A SKU is an internal code which each and every business can make for itself. A UPC, however, is the exact same no matter who sells the merchandise.
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