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I know almost everyone of you knows the joy and ecstasy of purchasing a new product such as a mobile phone, a refrigerator or your favourite automobile at the individual level, or the relief of seeing your stores filled with finished products for sales, which are in high demand. But did you ever reflect what all happens between the time you placed an order or created a demand for a particular product and the point of time when the imagination or desire becomes a concrete reality in this material world. This is exactly what is meant by the manufacturing cycle and given below are the main steps in which this cycle can be divided in the same order.
Step 1: Ordering – Manufacturing is all about demand of finished goods and the supply by the manufacturers and hence the first step in the manufacturing cycle is the placement of orders for manufacture of certain quantity of products. This quantity is governed by various factors such as current stocks, volume of sales, future trends and so forth. Take for example that when hot summers are about to begin in countries near the equator, the demand for fans, coolers, air-conditioners tends to increase and hence most dealers tend to fill their storehouses with sufficient supply of these products.
Step 2: Production – Obviously the next step of ordering should be to schedule production in such a manner so as to take optimum advantage of the manufacturing facilities so that adequate volume of goods are produced within the stipulated time period which helps to cater to the demand generated in the first step described above. It goes without saying that timing is of utmost importance in this step as there would be no use to produce air conditioners by the time summer period is over. Similarly keeping the manufacturing costs to a minimum is also a requirement of the production scheduling process.
Step 3: Manufacturing – After production has been ideally scheduled based on available machinery and production lines, the next step is to actually carry out the manufacturing of that product in tune with the schedule decided in the previous step
Step 4: Transportation – After the goods have been manufactured they need to be transported to different physical and geographical locations including warehouses, distributors, dealers, retailers etc and the means of transport depend on the type & nature of goods as well as the geographical spread of the different locations to which they have to be transported.
Step 5: Receipt – Once goods are transported they need to be received and acknowledged at the end of the chain. Inventory records need to be updated as well as fund transfer takes place at this stage as well.
Hence you can see that all manufactured goods have to pass through a series of stages and phases and in getting converted from useless raw material (from the end consumers point of view) to a usable commodity which is of some useful purpose to a consumer and also gives profit to the manufacturer.