The manufacturing process adds value to the raw materials or components by incorporating labor, technology, and other resources, ultimately creating finished products with higher market value. This value-added aspect allows businesses to sell their products at a price that exceeds the cost of the initial raw materials used. The manufacturing sector is closely monitored and analyzed by organizations like the conference board, and it is a subject of extensive examination by economists due to its significant impact on economic indicators and overall economic performance.
Manufacturing is a very simple business; the owner buys the raw material or component parts to manufacture a finished product. To function as a business the manufacturer needs to cover costs, meet demand and make a product to supply the market.