Since many other firms and industries are dependent on the products that are created by manufacturing organizations, an explanation of manufacturing models is a logical place to start a discussion of industry models. Distributors and retailers depend on selling products that are manufactured, usually by other organizations. And businesses and people depend on using manufactured goods.
There are two types of manufacturers: discrete manufacturers and process manufacturers. Discrete manufacturers assemble tangible parts into components. Examples of discrete manufacturers include manufacturers of computers, appliances, all types of machines, and anything that has tangible parts. Examples of process manufacturers include chemical companies, paint manufacturers, soft drink manufacturers, and any company that mixes liquids to create products. This chapter will focus mainly on discrete manufacturing although many of the constructs will also apply to process manufacturers.
Manufacturers are principally concerned with issues such as the following:
To answer these questions, manufacturing enterprises need to track information about the following: