Manufacturing Business: Definition & Characteristics

manufacturing business

Manufacturing business deals with producing the resources on a large scale therefore manufacturing business becomes vital and one of the biggest fundamentals in the Indonesian economy.

The manufacturing business includes a variety of factors in the operational sector and labour. To help you understand this topic better, check out the further explanation below.

What is a Manufacturing Business?

Manufacturing companies engage in the transforming raw materials into manufactured items. This sector is well-known for utilizing massive manufacturing machinery and equipment.

The number of workers employed is also bigger than any other company. As a result, the existence of manufacturing companies in a country is regarded as crucial since it may generate job opportunities.

Manufacturing business is responsible for more than just the processing of raw materials into final items. However, it is also possible to convert from raw to semi-finished items, or from partially to finished goods. Later, the value-added items will be offered to customers via multiple networks such as retailers and wholesalers.

What is a Manufacturing Business According to Experts

According to experts, a manufacturing business is defined as:

CIRP 1983

A united set of operations that begin with product design, planning, selecting materials or commodities, manufacturing methods, guaranteeing quality control, and implementing corporate administration and sales is called manufacturing companies.


Manufacturing companies are industries that manufacture something by hand or machine in order to make a product. It is also crucial to note that raw resources are basic necessities that must constantly be taken into account.

Manufacturing, on the other hand, may be considered as a process that converts different materials into a product with better quality.

Technical Understanding of Manufacturing Business

A manufacturing company is technically defined as an act of processing raw materials through physical and chemical processes in order to alter the form, appearance, or characteristics in order to make goods and their elements.

Not just that, but manufacture typically entails the assembly of numerous components to form a product. Manufacturing, in principle, is a production method that generates raw materials that are close to their completed form.

Economical Understand of Manufacturing Business

A manufacturing company is defined economically as a transformation process that begins with raw resources that have added value and progresses through the steps of operations until they finally have a market value.

The Characteristics of Manufacturing Business

This is how to distinguish manufacturing businesses from other businesses. These are the characteristic of manufacturing business:

Production Process

Since the distribution of work is distributed throughout several sectors, this procedure is known to be extremely complicated. The administrator, for example, would handle the company’s administrative duties, the operator will operate the current equipment, and the quality control department will ensure that the items produced meet the feasibility criteria.

Production Cost

The manufacturing production costs are high due to the vast quantity of items produced. The expenses are often used to assist the manufacturing –raw resources, equipment maintenance, personnel expenditures, and so on.

Product Processing

Product processing is defined as transforming raw resources into finished items to be sold to the customers. This method is not as simple as it seems since it needs a substantial amount of time and work.

The Availability of Heavy Machinery

Furthermore, the availability of high machinery is a well-known characteristic of manufacturing enterprises. Of course, this equipment is utilized to manufacture a specific amount and quality of items. Aside from big machines, industrial production processes still need the employment of human labor to operate and monitor the hardware.

Sales and Marketing

The operations of production, marketing, and sales are strongly intertwined. When the sales revenue grows, the manufacturing process should be prepared to deliver the product in large quantities to make the products available to the public.

Product marketing performed by the sales and marketing department is essential because through the marketing process, the company will make its own product to be publicly known and attract customers to buy the products.

Examples of Manufacturing Business

Every industry has a manufacturing company that is well known to the public. The following are examples of the most popular manufacturing companies in Indonesia.

Consumer Goods Industry

  • Unilever Indonesia Tbk (UNVR)
  • Kalbe Farma Tbk (KLBF) – Kimia Farma Tbk (KAEF)
  • Indofood CBP Sukses Makmur Tbk (ICBP)

Chemical Industry

  • Beton Jaya Manunggal Tbk (BTON)
  • Semen Baturaja Persero Tbk (SMBR)
  • Holcim Indonesia Tbk (SMCB)
  • Barito Pacific Tbk (BRPT)

Electronic and Automotive Industry

  • Astra Otopart Tbk (AUTO)
  • Astra International Tbk (ASII)
  • Sumi Indo Kabel Tbk (IKBI)
  • Asia Pacific Fibers Tbk (POLY)

Textile and Handicraft Industry

  • Centex Tbk (CNTX)
  • Argo Pantes Tbk (ARGO)
  • Apac Citra Centertex Tbk (MYTX)
  • Eratex Djaja Tbk (ERTX)

Business Activity of Manufacturing Industry

A manufacturing company needs to implement several business activities to make the operational activities function properly. Below is the process of manufacturing industry:


Procurement is the process of making the material or goods available. This is the fundamental process that will make the production run smoothly.

In Out Inventory

In out inventory is the process that assembles raw material into finished goods.


Production is a process that is associated with promoting or selling goods. The company’s sales are derived from these goods.


General administration is an essential procedure since it involves policy components such as documentation, supervision, punishment, decision making, and etc.


Finally, the financial procedure. This procedure is often carried out in order to maintain a company’s finances in fine condition and to ensure that all transactions are properly managed.

How to Start a Manufacturing Business?

Every industry has a particular degree of risk, and industrial companies are considered to be extremely risky. Why? Because the skill of analyzing market targets is required here. Not to mention the big number of products that are manufactured.

But, do not worry because we have some tips for you who plan to start a manufacturing company.

Business Management

It is impossible to run a business without effective management. Furthermore, manufacturing businesses are large-scale industries that should pay attention to the various factors, including planning, production, and sales. Proper management ensures all your business operations are focused and effective.


Before you start a manufacturing company, it is essential to consider the business strategy that must be implemented. Because the cost of manufacturing and expenditure will be much higher if there is just a limited supply of goods. Make sure, everything you do has a significant and lasting impact.

Good Financial Management

Good financial management is the foundation of a company’s success. As a businessman, you must consider how to organize your revenue, costs, assets, and revenues.

In contrast to service and trade firms in general, the manufacturing industry typically has a particular report, namely the cost of manufacturing, as the main report.

In summary, a manufacturing company is a business that manufactures products on a massive scale. These operational activities distinguish manufacturing businesses from other businesses.

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