What is manufacturing?

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Inspired by Seth Stephens-Davidowitz’s ‘Everybody lies - Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are’, we’ve been looking into what people really want to know about manufacturing, based on what they plug into Google (other search engines are available) with a view to providing a one-stop repository of the answers.

First up, we get to grips with the seemingly simple question of what is manufacturing.


Manufacturing definition

Is there a simple definition of manufacturing? Yes, mostly.

There are two broad ways of defining the sector. The first is the composition of sub-sectors that make up the manufacturing industry – these include sectors from food & drink, chemicals and electronics to metals production and aerospace, among others.

What does the UK manufacture

subsectors 

Note: You can find the full list of sector bulletins on our website

These are the basis for measuring and comparing manufacturing activity and how national statistical agencies (and economists) tend to define manufacturing. Indeed, in most of our publications we often use these breakdowns as a means of telling a clearer story about what’s happening in manufacturing and identifying different drivers of growth. Our annual fact card, for example, provides a lot of information about manufacturing, broken by sector and allows us to look at where concentrations of manufacturing activity exist around the country.

Where does manufacturing take place

 

sub-sector-output-breakdown  

how-mfg-is-spread-around-the-UK

Manufacturing from a manufacturer's perspective

I said there were two ways of defining the sector. The second is how a manufacturer describes what she does. Many will not think about it in terms of end products, but as a series of processes that deliver a whole solution to their customer – an example of this is shown below, and can be described as the value chain definition of manufacturing.

Once upon a time, this could have been simply drawn as inputs of raw materials, machines, people and a bit of know-how to churn out physical products. But today, manufacturers engage in some or all parts of the value chain outlined below – the development of a solution, innovation to design and manufacture the solution, additional services or business model innovation which determines ownership of the product, right through to recycling, reuse or disposal.

what-is-it

How manufacturing companies create value

The particular combination of these activities determines the basis on which companies compete for global market share or their position in the supply chain. Importantly, these are probably not static, with the primary activities and the basis on which companies derive value from them evolve with customer demands and technological change.

Many of these points will be explored in future blogs and the accompanying minisode podcasts, where we talk about what the data tells is about why manufacturing matters, the future, the environmental impact of the sector and who works in industry.

 

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