Page 4: The production process
Market research will determine what customers want from the product. This will indicate if a demand exists and what the consumer wants in terms of features, specification, quality and price. There will then be a research and development phase which brings together the above demands, together with the technical possibilities for manufacturing the product.
Before an innovative design can be put into full production, a prototype should be produced or testing of the product carried out. This increasingly involves the use of Computer Aided Design/Computer Aided Manufacturing (CAD/CAM) technology, allowing rapid changes to be made to the product. Stringent quality and safety tests must be undergone before production can fully commence. These may be in the form of recognised safety tests laid down by independent bodies, such as the British Standards Institute (BSI), or international standards, such as harmonised European standards.
Firstly, all raw materials must be obtained. This may be achieved through either producing the components or inputs - alternatively, they may be bought in from suppliers, who may be better placed to exploit economies of scale in this area.
Manufacturing the end product will ideally be achieved by lean production to ensure costly amounts of stock do not build up through the use of methods such as Just in Time. This approach also enables a rapid response to meet changing consumer demands. Much of the production process may now be automated, with repetitive tasks performed by machines.
Quality control is an important part of the production process and many companies now empower all employees to undertake quality control activities at any stage of the process.Distribution channels enable the finished goods to reach the end consumer. The distribution function involves sales and marketing, transport and logistics and accounts and finance. This ensures customers know the product is available, it is received in a timely manner and that the goods are paid for once received.
Depending on the nature of the product, it may be supplied to the end consumer through direct sales from the factory – either through telephone-sales or the Internet - or more traditionally through retailers, who purchase larger quantities of the goods and act as ‘middle-men’. Retailers may also provide feedback to the manufacturer on the success of the product.
Ultimately, the product becomes available to the customer, who may choose to consume it, providing the product is close enough to the goods they demand - the specification identified by the market research.