So what is a manufacturer, what is its role and what are the current types of production? Let's explore the details with Intech Group in the article below.

1. What is a manufacturer?

This is an individual, organization or business that plays a central role in the process of creating products and equipment. These units transform raw materials, components or semi-finished products into finished products through specialized production and manufacturing processes. They not only directly participate in this process but also maximize the exploitation of resources such as machinery, technology, equipment and human resources to create value for the product.

2. Outstanding features of a manufacturer

- Manufacturers hold essential factors such as factories, machinery, technology and human resources to operate the production line.

- To increase productivity and quality, they always seek to improve processes, integrate advanced technologies and modern production techniques to optimize costs and time.

- One of the most important roles of manufacturers is to transform raw materials into finished products with high use value, thereby meeting consumer demand and contributing to the global supply chain.

3. Role and function of manufacturers

What is the role of manufacturers?

Manufacturers play a core role in the supply chain and economic development. Specifically:

- Creating products to serve the market: Being a unit that provides products that meet the basic to advanced needs of consumers such as food, smartphones, industrial machinery, etc.

- Creating use value and economic value: By transforming raw materials or discrete components into finished products, businesses not only increase the use value of products but also create profits, contribute to the income of workers and the development of businesses.

- Promoting economic growth: Production activities help create jobs, stimulate related industries, increase GDP value and create momentum for sustainable economic development.

What is the function of a manufacturer?

To perform its role, the manufacturer undertakes many key functions in the production process:

- Production planning: Develop a detailed plan on output, schedule, scale and effective use of resources such as human resources, machinery, and raw materials.

- Raw material procurement: Search for and cooperate with reputable suppliers, ensuring the quality and stability of input materials for production.

- Applying technology to production: Using appropriate technology to automate processes, improve productivity and optimize production costs.

- Human resource management: Recruiting, training and developing a workforce, while building an efficient, cohesive and creative working environment.

- Product quality control: Establishing a strict quality control system to ensure that products meet technical, design, durability, functionality and safety standards before being released to the market.

4. Distinguishing the manufacturer from the subjects in the supply chain

The roles of the manufacturer and related subjects such as suppliers, distributors and retailers are all linked together. However, each role undertakes a separate function in the supply chain of goods. Below is a detailed comparison table:

5. Common types of manufacturers today

In the modern manufacturing sector, manufacturers are not only different in terms of industry but also in terms of operating models. Below are typical models you need to know.

• Match manufacturer - Made to Stock (MTS)

MTS (Made to Stock) is a form in which the facility carries out mass production based on market demand forecasts, then stores the products ready for distribution. This is a popular model in industries such as food, beverage, fashion, consumer electronics, etc. With the advantage of fast delivery time because the products are already in stock. However, it also depends a lot on the accuracy of the forecast. If the inventory management software predicts incorrectly, it can lead to excess inventory or product shortages.

• Manufacturer to order – Made to Order (MTO)

MTO (Made to Order) is a model in which the organization only starts the production process when there is an order from a customer. This model is suitable for products that require high personalization such as furniture, specialized machinery, medical equipment, etc., helping to limit inventory risks and avoid wasting unsold products. However, the production time is longer, customers have to wait a long time; it is difficult to respond well when demand increases suddenly.

• Manufacturer by assembly style – Made to Assemble (MTA)

MTA (Made to Assemble) is an intermediate form between MTS and MTO. In this model, the business prepares basic components and only assembles them when there is an order. This is a popular model in industries such as automobiles, electronics or computers, helping to shorten delivery times compared to MTO, and is more flexible in product customization. If the forecast of specific product demand is incorrect, it can cause spare parts inventory, affecting production efficiency.

6. Factors affecting the manufacturer's operations

For manufacturers, operational efficiency not only depends on internal factors of the enterprise but is also strongly affected by the external environment. When managing these factors well, it will maintain competitiveness and sustainable growth.

• Internal factors affecting manufacturers

Internal factors are the foundation that determines the performance and long-term development of manufacturers, including:

- Technology and level of automation: Applying technology, machinery, loading and unloading robots, conveyors, and modern conveyor belts in production helps increase productivity, reduce costs and ensure consistent quality. Digital transformation in production is a trend that helps improve operational efficiency.

- High-quality human resources: Professional, skilled and well-trained employees will help improve labor productivity and adaptability to new technology. Therefore, investing in training, attractive remuneration policies and a positive working environment will help them retain talent.

- Efficiency in production management: Reasonable production planning, strict material management, strict quality control and cost optimization are core factors for stable operation.

Financial capacity: Investment capital is a prerequisite for expanding scale, innovating equipment, applying technology and improving production capacity. A financially strong unit will easily adapt and develop in a competitive business environment.

• External factors affecting manufacturers

Manufacturer to order – Made to Order (MTO)
MTO (Made to Order) is a model in which the organization only starts the production process when there is an order from a customer. This model is suitable for products that require high personalization such as furniture, specialized machinery, medical equipment, etc., helping to limit inventory risks and avoid wasting unsold products. However, the production time is longer, customers have to wait a long time; it is difficult to respond well when demand increases suddenly.

Manufacturer by assembly style – Made to Assemble (MTA)
MTA (Made to Assemble) is an intermediate form between MTS and MTO. In this model, the business prepares basic components and only assembles them when there is an order. This is a popular model in industries such as automobiles, electronics or computers, helping to shorten delivery times compared to MTO, and is more flexible in product customization. If the forecast of specific product demand is incorrect, it can cause spare parts inventory, affecting production efficiency.

6. Factors affecting the manufacturer's operations
For manufacturers, operational efficiency not only depends on internal factors of the enterprise but is also strongly affected by the external environment. When managing these factors well, it will maintain competitiveness and sustainable growth.

Internal factors affecting manufacturers
Internal factors are the foundation that determines the performance and long-term development of manufacturers, including:

- Technology and level of automation: Applying technology, machinery, loading and unloading robots, conveyors, and modern conveyor belts in production helps increase productivity, reduce costs and ensure consistent quality. Digital transformation in production is a trend that helps improve operational efficiency.

- High-quality human resources: Professional, skilled and well-trained employees will help improve labor productivity and adaptability to new technology. Therefore, investing in training, attractive remuneration policies and a positive working environment will help them retain talent.

- Efficiency in production management: Reasonable production planning, strict material management, strict quality control and cost optimization are core factors for stable operation.

Financial capacity: Investment capital is a prerequisite for expanding scale, innovating equipment, applying technology and improving production capacity. A financially strong unit will easily adapt and develop in a competitive business environment.

External factors affecting manufacturers
In addition to internal factors, external factors also significantly affect the operations of manufacturers, including:

- Market demand and consumption trends: Market fluctuations and changes in consumer habits force them to flexibly adjust products, scale and strategies. Timely grasping of trends will help businesses increase consumption capacity and develop strongly.

- Legal policies and state support: Tax rates, environmental regulations, capital support packages or technology transfer can all create opportunities or challenges. A favorable legal environment will help manufacturers expand their scale and invest long-term.

- Industry competition and changes in competitors: Fierce competition from domestic and foreign competitors requires businesses to constantly innovate, improve products and improve service quality.

- Force majeure factors: Natural disasters, epidemics, occupational safety incidents or supply chain crises can all cause production disruptions, property damage and seriously affect business operations.

It can be seen that manufacturers need to be flexible, adapt to market changes and find ways to control and minimize potential risks. By capturing and analyzing influencing factors, manufacturing plants can move towards building a smart factory model through effective and sustainable business strategies.

Intech Group, with more than 13 years of experience in the field of automation and manufacturing, understands the challenges that manufacturing plants are facing. Contact Intech Group today, we provide comprehensive solutions to help manufacturing plants optimize production operations, improve efficiency, and increase competitiveness in the market.