Types of manufacturing companies and their main challenges

The manufacturing industry is a broad and diverse sector.

We could be talking about anything from a local bakery to large manufacturers of cosmetics, textiles, pharmaceuticals, food products, or even chemicals.

All these companies share one common element: the production of items through the modification of raw materials.

Maybe your company falls within this sector, and you wonder about the most important challenges that need to be addressed.

To give you a more comprehensive understanding of the challenges ahead, we have prepared this article that explains everything you need to know about manufacturing companies.

Keep reading for more details!

What is the manufacturing industry?

It is a collection of companies focused on transforming raw materials to produce finished or semi-finished products.

To achieve this goal, three key production factors are used:

• Labor
• Machinery
• Automation or robotics systems

The operation of this type of industry is based, first and foremost, on purchasing raw materials from extractive companies and introducing them into the assembly line to produce finished or semi-finished products.

In many cases, the company covers a significant portion of the supply chain stages or even markets the product through its own brands.

Therefore, it is the most classic type of industry that has existed since the first Industrial Revolution, to which successive technological advances have been added, allowing for the improvement and acceleration of production models thanks to the rise of Industry 4.0.

What are the types of manufacturing companies?

When talking about manufacturing companies, different classifications can be made.

By Company Size:

• Large or Medium-sized Industries: Generally, manufacturing industries tend to be B2B companies, manufacturers that in some cases also handle distribution or retail sales through their own brands.
• Small Producers: Small and medium-sized enterprises such as bakeries, butcher shops, or those producing their own products are also manufacturing industries, even if they are limited to selling their own production.

By Sector:

‍According to the type of final or intermediate products that manufacturing companies produce, we can distinguish between different segments.

• Textile
• Automotive
• Chemicals
• Pharmaceutical
• Agro-food
• Wood
• Ceramics
• Steel
• Paper
• Robotics
• Computer, electrical, and optical products
• Furniture
• Machine tools
• Rubber and plastics

These are just some of the most well-known industries, but the manufacturing sector is enormously broad.

To give you an idea, you can find examples of manufacturing companies in Spain in companies as diverse as Inditex, Seat, Grupo Bimbo, Gamesa, Grupo Antolín, or Acerinox.

By Production Approach:

• MTS (Make to Stock): These are inventory-based manufacturing companies that produce products according to demand and must adapt to their sales forecast and effectively manage inventory.
• MTO (Make to Order): These companies focus on producing specific products for a customer. This requires proper control of production times.
• ETO (Engineer to Order): These are complex, custom-made products that need to be adapted to a specific design and characteristics. They also require many tests. For this, it is crucial to have solutions that help capitalize and manage the company's know-how and transfer it to product design professionals, programmers, maintenance technicians, etc.
• JSM (Job Shop Manufacturing): This is the small-scale manufacturing model followed by small businesses selling their own products.
• BM (Batch Manufacturing): Also known as "batch production," it is a production approach where products are manufactured in batches or groups, so production is not continuous. If demand forecasting is effective, this type of industry can be highly efficient.

Challenges in the manufacturing industry

The manufacturing sector generates multiple positive synergies for the economy: it creates stable and quality employment, reflecting its high productivity, and promotes technological diffusion throughout society, as shown in this sectoral analysis by Caixabank Research.

In Spain, it is also a fairly fragmented sector, immersed in the implementation of technologies that help enhance its competitiveness, sustainability, and efficiency.

1. Intelligent demand forecasting

‍Today, industries in the sector need to make an intelligent demand forecast to optimize the number of units produced for each item.

This can be done more precisely today thanks to Big Data and software tools available on the Internet.

Additionally, intelligent demand forecasting can lead to increased labor when needed if using an application like Uktena, which eliminates the learning curve.

2. Improving efficiency

‍If the competitiveness and profitability of manufacturing companies are based on their production processes, efficiency is undoubtedly one of the key aspects to improve.

In manufacturing companies, processes such as injection molding, forging, casting, extrusion, welding, assembly, or laser cutting are carried out. These tasks are typically performed in medium or large industries through automation systems, which allow for greater efficiency.

This means producing more in less time, minimizing defective units, and adapting quickly to demand needs.

3. Complying with environmental and safety regulations

Manufacturing companies must ensure compliance, i.e., the set of policies, procedures, and actions to ensure that environmental, labor, and safety regulations are met.

It is also essential to meet product quality standards and consider all legal aspects to avoid penalties in case of inspection, ensure products can be marketed, and help protect staff from any potential risks.

To achieve this goal, staff training is key, as well as providing the necessary tools for the teamwork of technical professionals who must perform tasks.

Solutions like Uktena help monitor, advise, and train technicians, supervisors, and operators working in manufacturing companies.

4. Enhancing production processes

Improving production processes through the implementation of new technologies can impact various areas, such as costs, product quality, or production speed.

One key to making a manufacturing industry more competitive today is optimizing production times through industrial robotics solutions.

But we must not only think about machines, but also about the work done by operators, technicians, supervisors, and production managers.

The Internet of Things, Mixed Reality, and Artificial Intelligence are helping companies have solutions to resolve incidents faster, avoid production stoppages, and improve their competitive advantages.

5. Optimizing product design

Manufacturing industries focused on producing custom products often need to make multiple revisions and controls to verify that the item meets the buyer's needs.

One of the challenges for industries is to harness the potential of technologies and Artificial Intelligence to optimize complex product design processes, which primarily affect manufacturing companies in this area.

This way, they can optimize their processes, determine the best materials, designs, and manufacturing processes, and effectively capitalize on their knowledge to offer better customer service.

Do you have a company in the manufacturing sector? We invite you to talk with us about your technology needs to enhance efficiency in your industry!