what is manufacturing plan in business plan

Manufacturing Business Plan Template

Written by Dave Lavinsky

Manufacturing Business Plan

You’ve come to the right place to create your Manufacturing business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Manufacturing companies.

Below is a template to help you create each section of your Manufacturing business plan.

Executive Summary

Business overview.

Perfect Snacks, located in Lincoln, Nebraska, is a food manufacturing company that specializes in the production of snack foods and packaged goods. We manufacture an extensive line of snack products, including trail mix, gummies, and chocolate. Our company focuses on quality and only uses the best natural ingredients in our products. We will primarily sell our products to grocery stores and other establishments that sell snacks, but will also sell bulk orders to individual customers through our website.

Perfect Snacks was founded by Joe Boseley. Joe has been working on the manufacturing company concept over the past few years and began networking with grocery store clients and locating the land to build his manufacturing and distribution center. As a line manager that oversaw dozens of employees, Joe has the proper knowledge and experience to own, manage, and operate his own manufacturing company.

Product Offering

Perfect Snacks will manufacture an extensive list of sweet, salty, and healthy snacks. Some of our initial products will include:

We will primarily sell our products to grocery stores, recreation centers, and other businesses that sell snacks in bulk. Consumers can find our products in stores or buy them in bulk on our website.

Customer Focus

Perfect Snacks will primarily serve the residents of Lincoln, Nebraska. The community has a large population of families and children, who are the primary consumers of snack foods. Therefore, we will market our products to recreational centers, schools, grocery stores, and other establishments that sell snacks to children and their parents.

Management Team

Perfect Snacks is owned by Joe Boseley, a local entrepreneur who has worked in various warehouses and manufacturing companies in Lincoln, Nebraska. Working in the manufacturing industry and in warehouses, Joe is very familiar with the processing and distribution of packaged foods. As a line manager that oversaw dozens of employees, Joe has the proper knowledge and experience to own, manage, and operate his own manufacturing company.

Joe will utilize his past experience with developing staff roles and functions. He is also very familiar with the manufacturing equipment and plans to purchase the latest technology that is efficient and cost effective. His contacts have allowed him to gain concrete Letters of Intent from local supermarket chains to have his manufactured goods in their stores.

Success Factors

Perfect Snacks will be able to achieve success by offering the following competitive advantages:

• Taste: Perfect Snacks’ snack products will be made with the highest quality ingredients and offer quality over quantity.
• Price: Perfect Snacks is able to offer the highest quality snacks at a competitive price point.
• Community Relations: Perfect Snacks will be a pillar in the community and be heavily involved in family-related activities in the area. It will sponsor events, provide snacks for schools and daycares at a discounted price, and donate a portion of its proceeds to area family-related charities and organizations.
• Proprietary Technology: Perfect Snacks will invest heavily on the latest technology to manufacture the snack foods for distribution. It will ensure the food products are made safely and free from any harmful chemicals and ingredients.

Financial Highlights

Perfect Snacks is seeking a total funding of $1,200,000 of debt capital to open its manufacturing company. The capital will be used for funding capital expenditures, salaries, marketing expenses, and working capital. Specifically, these funds will be used as follows:

• Manufacturing facility design/build-out: $400,000
• Equipment and supplies: $375,000
• Initial inventory: $100,000
• Three months of overhead expenses (payroll, rent, utilities): $250,000
• Marketing costs: $50,000
• Working capital: $25,000

The following graph below outlines the pro forma financial projections for Perfect Snacks.

Company Overview

Who is perfect snacks, perfect snacks history.

After conducting a market analysis, Joe Boseley began surveying the local vacant warehouse space and decided on a parcel of land to construct the warehouse and distribution center. Joe incorporated Perfect Snacks as a Limited Liability Corporation on January 1st, 2023.

Once the land is acquired for the warehouse space, construction can begin to build-out the manufacturing facility.

Since incorporation, the Company has achieved the following milestones:

• Located a vacant lot that would be ideal for a manufacturing facility
• Developed the company’s name, logo, and website
• Hired a general contractor and architect for the build-out of the warehouse, small office, and distribution area
• Determined equipment and necessary supplies
• Determined beginning inventory
• Attained Letters of Intent from supermarket clients
• Began recruiting key employees

Perfect Snacks Services

Industry analysis.

The Manufacturing sector’s performance is largely attributable to the value of the US dollar, commodity prices, policy decisions and US manufacturing capacity. Food manufacturing has a history of success as it produces a basic human need. According to Grand View Research, the industry is currently valued at $121 billion and is expected to expand at a compound annual growth rate of 9.5% from now until 2030.

Commodity prices are currently stabilizing from coronavirus-induced volatility and renewed demand, both in the United States and global economies, which is anticipated to facilitate revenue expansion for manufacturers. Moreover, shifting technological change in the Manufacturing sector is anticipated to benefit large, developed economies, such as the United States. Therefore, now is a great time to start a new food manufacturing company in the U.S.

Customer Analysis

Demographic profile of target market.

Perfect Snacks will serve the community residents of Lincoln, Nebraska and its surrounding areas. The community of Lincoln, Nebraska has thousands of households that have children. Statistics show that the main consumers of snack products are children of all ages. They are regularly placed in school lunchboxes, afterschool snacks and programs, and at weekend sporting events. Therefore, we will market to locations where snacks are bought by children or their parents, such as grocery stores, recreational centers, and schools.

The precise demographics Lincoln, Nebraska is as follows:

Customer Segmentation

Perfect Snacks will primarily target the following customer profiles:

• Grocery stores and recreational centers

Competitive Analysis

Direct and indirect competitors.

Perfect Snacks will face competition from other companies with similar business profiles. A description of each competitor company is below.

Snacks N More

Snacks N More is another local manufacturing company that provides snack food to the immediate area. Established over thirty years ago, the company has the knowledge and expertise in food processing, commercialization, and packaging. They are known as a recognized ingredient supplier for the foodservice industry. Their portfolio of products include a variety of nuts, snacks, confections, and dry-blend ingredients. As a private label manufacturer, Snack’s More produces a full line of non-chocolate candy, nuts, and fruit-flavored snacks. The company is known for their fruit flavored snacks, dried raisins, nut mixes, and producing ingredients for local restaurants and establishments. Their line of nuts and dried fruits are often used for baking purposes.

Jaxon’s Candy

Jaxon’s Candy is a manufacturer of all things candy related. As a contract manufacturer, the company works with many companies to create their custom designed confections. Their large 50,000 square foot facility produces over 300,000 pounds of candy every month. All of the products are highly concentrated either in sugar or chocolate, or both. Jaxon’s Candy also designs and manufactures their own custom packaging. The candy produced is also kosher certified, gluten free, peanut free, and non-GMO.

Jaxon’s Candy currently manufactures candy for the following brands – Tommy Candy, Laffy Town, Chocowhoawhoa, Jellylicious, Healthee Candeee, and Sticky Teeth. Jaxon’s Candy can be found in grocery stores and convenient stores along the west coast of the United States.

Gimmy Candy

Gimmy Candy is located in the midwestern portion of the United States and boasts a facility of over 1 million square feet. Their fleet of transportation trucks distributes throughout the continental United States and is considered one of the largest candy manufacturers in the country. Their product portfolio includes assorted chocolates, gummy candy, hard candy, fruit candy, as well as gums and mints. Gimmy Candy was established in 1947 and has grown to be a model of manufacturing companies the industry uses as a model of sustainability and profitability. Their lineup of candy products can be found in every single grocery store and convenient store in the country. Gimmy Candy is considering expanding its distribution globally and start exporting its candy products to Asia, Canada, Europe, and South America. As one of the largest privately held companies in the United States, Gimmy Candy is also considered a top employer in the country and offers its employees a generous benefits package.

Competitive Advantage

Perfect Snacks will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

Perfect Snacks will offer the unique value proposition to its clientele:

• Fresh and comforting taste
• Community family advocate
• Developed with proprietary technology
• Manufactured with fresh, quality ingredients
• Affordable price

Promotions Strategy

The promotions strategy for Perfect Snacks is as follows:

Social Media

Perfect Snacks will invest heavily in a social media advertising campaign. The brand manager will create the company’s social media accounts and invest in ads on all social media accounts. It will use targeted marketing to appeal to the target demographics.

Website/SEO

Perfect Snacks will invest heavily in developing a professional website that displays all of the features and benefits of the snack products. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.

Major Publications

We will also invest in advertising in selected larger publications until we have achieved significant brand awareness. Advertisements such as billboards and commercials will be shown during peak tv watching time and the billboards will be placed in highly trafficked areas.

Sponsorships

Perfect Snacks will also invest in sponsoring certain athletic and school events so that their banners and collateral material are displayed all over the event where numerous parents and children are at.

Perfect Snacks’s pricing will be moderate so consumers feel they receive great value when purchasing our snack products.

Operations Plan

The following will be the operations plan for Perfect Snacks.

Operation Functions:

• Joe Boseley will be the CEO of Perfect Snacks. He will oversee the general operations and executive aspects of the business.
• Joe is joined by Candace Smith who will act as the warehouse manager. She will train and manage the staff as well as oversee general production of our products.
• Joe will hire an Administrative Assistant, Marketing Manager, and Accountant, to handle the administrative, marketing, and bookkeeping functions of the company.
• Joe will also hire several employees to manufacture our products and maintain the equipment and machinery.

Milestones:

Perfect Snacks will have the following milestones complete in the next six months.

• 02/202X Finalize lease agreement
• 03/202X Design and build out Perfect Snacks
• 04/202X Hire and train initial staff
• 05/202X Kickoff of promotional campaign
• 06/202X Launch Perfect Snacks
• 07/202X Reach break-even

Financial Plan

Key revenue & costs.

Perfect Snacks’s revenues will come primarily from its snack food sales. The company will sell the packaged snacks in local grocery stores, convenience stores, and other locations. As the company’s revenues increase, it will look to gain a wider distribution area.

The land purchase, equipment, supplies, opening inventory, and labor expenses will be the key cost drivers of Perfect Snacks. Other cost drivers include taxes, business insurance, and marketing expenditures.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Average order value: $250

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Manufacturing Business Plan FAQs

What is a manufacturing business plan.

A manufacturing business plan is a plan to start and/or grow your manufacturing business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Manufacturing business plan using our Manufacturing Business Plan Template here .

What are the Main Types of Manufacturing Businesses?

There are a number of different kinds of manufacturing businesses , some examples include: Garment manufacturing, Food product manufacturing, Diaper manufacturing, Tile manufacturing, and Toy manufacturing.

How Do You Get Funding for Your Manufacturing Business Plan?

Manufacturing businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Manufacturing Business?

Starting a manufacturing business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Manufacturing Business Plan - The first step in starting a business is to create a detailed manufacturing business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your manufacturing business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your manufacturing business is in compliance with local laws.

3. Register Your Manufacturing Business - Once you have chosen a legal structure, the next step is to register your manufacturing business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your manufacturing business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Manufacturing Equipment & Supplies - In order to start your manufacturing business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your manufacturing business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

• Case Studies
• Free Coaching Session

Production Plan in Business Plan: A Comprehensive Guide to Success

Last Updated:  

July 5, 2024

In any business venture, a solid production plan is crucial for success. A production plan serves as a roadmap that outlines the steps, resources, and strategies required to manufacture products or deliver services efficiently. By carefully crafting a production plan within a business plan, entrepreneurs can ensure optimal utilisation of resources, timely delivery, cost efficiency, and customer satisfaction. In this article, we will delve into the intricacies of creating an effective production plan in a business plan , exploring its key components, strategies, and the importance of aligning it with overall business objectives .

Key Takeaways on Production Plans in Business Planning

• A production plan : a detailed outline that guides efficient product manufacturing or service delivery.
• Importance of a production plan : provides a roadmap for operations, optimises resource utilisation, and aligns with customer demand.
• Key components : demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance.
• Strategies : lean manufacturing, JIT inventory, automation and technology integration, supplier relationship management, and continuous improvement.
• Benefits of a well-executed production plan : improved efficiency, reduced costs, enhanced product quality, and increased profitability.

What is a Production Plan?

A production Seamless Searches plan is a detailed outline that specifies the processes, resources, timelines, and strategies required to convert raw materials into finished goods or deliver services. It serves as a blueprint for the entire production cycle, guiding decision-making and resource allocation. The production plan considers factors such as demand forecasting, capacity planning, inventory management, and quality assurance to ensure efficient operations and optimal customer satisfaction.

Why is a Production Plan Important in a Business Plan?

The inclusion of a production plan in a business plan is vital for several reasons. First and foremost, it provides a clear roadmap for business operations, helping entrepreneurs and managers make informed decisions related to production processes. A well-developed production plan ensures that resources are utilised efficiently, minimising wastage and optimising productivity. This is particularly important for any startup platform aiming to streamline its production processes and achieve sustainable growth.

Additionally, a production plan allows businesses to align their production capabilities with customer demand. By forecasting market trends and analysing customer needs, businesses can develop a production plan that caters to current and future demands, thus avoiding overstocking or understocking situations.

Furthermore, a production plan helps businesses enhance their competitive advantage. By implementing strategies such as lean manufacturing and invoice automation , companies can streamline their production processes, reduce costs, improve product quality, and ultimately outperform competitors.

Key Components of a Production Plan

To create an effective production plan, it is crucial to consider several key components. These components work together to ensure efficient operations and successful fulfilment of customer demands. Let's explore each component in detail.

Demand Forecasting

Demand forecasting is a critical aspect of production planning. By analysing historical data, market trends, and customer behaviour, businesses can predict future demand for their products or services. Accurate demand forecasting allows companies to optimise inventory levels, plan production capacity, and ensure timely delivery to customers.

One approach to demand forecasting is quantitative analysis, which involves analysing historical sales data to identify patterns and make predictions. Another approach is qualitative analysis, which incorporates market research, customer surveys, and expert opinions to gauge demand fluctuations. By combining both methods, businesses can develop a robust demand forecast, minimising the risk of underproduction or overproduction. Utilising a free notion template for demand forecasting can further streamline this process, allowing businesses to organise and analyse both quantitative and qualitative data efficiently in one centralised location.

Capacity Planning

Capacity planning involves determining the optimal production capacity required to meet projected demand. This includes assessing the production capabilities of existing resources, such as machinery, equipment, and labour, and identifying any gaps that need to be addressed. By conducting a thorough capacity analysis, businesses can ensure that their production capacity aligns with customer demand, avoiding bottlenecks or excess capacity.

An effective capacity plan takes into account factors such as production cycle times, labour availability, equipment maintenance, and production lead times. It helps businesses allocate resources efficiently, minimise production delays, and maintain a consistent level of output to meet customer expectations.

Inventory Management

Efficient inventory management is crucial for a successful production plan. It involves balancing the cost of holding inventory with the risk of stockouts. By maintaining optimal inventory levels, businesses can reduce carrying costs while ensuring that sufficient stock is available to fulfil customer orders.

Inventory management techniques, such as the Economic Order Quantity (EOQ) model and Just-in-Time (JIT) inventory system, help businesses strike the right balance between inventory investment and customer demand. These methods consider factors such as order frequency, lead time, and carrying costs to optimise inventory levels and minimise the risk of excess or insufficient stock.

Resource Allocation

Resource allocation plays a pivotal role in a production plan. It involves assigning available resources, such as labour, materials, and equipment, to specific production tasks or projects. Effective resource allocation ensures that resources are utilised optimally, avoiding underutilisation or over-utilisation.

To allocate resources efficiently, businesses must consider factors such as skill requirements, resource availability, project timelines, and cost constraints. By conducting a thorough resource analysis and implementing resource allocation strategies, businesses can streamline production processes, minimise bottlenecks, and maximise productivity.

Quality Assurance

Maintaining high-quality standards is essential for any production plan. Quality assurance involves implementing measures to monitor and control the quality of products or services throughout the production process. By adhering to quality standards and conducting regular inspections, businesses can minimise defects, ensure customer satisfaction, and build a positive brand reputation.

Quality assurance techniques, such as Total Quality Management (TQM) and Six Sigma , help businesses identify and rectify any quality-related issues. These methodologies involve continuous monitoring, process improvement, and employee training to enhance product quality and overall operational efficiency.

In addition to the core components of a production plan, it's also important for businesses to consider the broader aspects of their business strategy, including marketing and advertising. Understanding the costs and returns of different marketing approaches is crucial for comprehensive business planning . For instance, direct response advertising costs can vary significantly, but they offer the advantage of measurable responses from potential customers. This type of advertising can be a valuable strategy for businesses looking to directly engage with their target audience and track the effectiveness of their marketing efforts.

Strategies for Developing an Effective Production Plan

Developing an effective production plan requires implementing various strategies and best practices. By incorporating these strategies into the production planning process, businesses can optimise operations and drive success. Let's explore some key strategies in detail.

Lean Manufacturing

Lean manufacturing is a systematic Seamless Searches approach aimed at eliminating waste and improving efficiency in production processes. It emphasises the concept of continuous improvement and focuses on creating value for the customer while minimising non-value-added activities.

By adopting lean manufacturing principles, such as just-in-time production, standardised work processes, and visual management, businesses can streamline operations, reduce lead times, and eliminate unnecessary costs. Lean manufacturing not only improves productivity but also enhances product quality and customer satisfaction.

Just-in-Time (JIT) Inventory

Just-in-Time (JIT) inventory is a strategy that aims to minimise inventory levels by receiving goods or materials just when they are needed for production. This strategy eliminates the need for excess inventory storage, reducing carrying costs and the risk of obsolete inventory.

By implementing a JIT inventory system, businesses can optimise cash flow, reduce storage space requirements, and improve overall supply chain efficiency. However, it requires robust coordination with suppliers, accurate demand forecasting, and efficient logistics management to ensure timely delivery of materials.

Automation and Technology Integration

Automation and technology integration play a crucial role in modern production planning, as well as mobile app development . By leveraging technology, businesses can streamline processes, enhance productivity, and reduce human error. Automation can be implemented in various aspects of production, including material handling, assembly, testing, and quality control.

Continuous Improvement

Continuous improvement is a fundamental principle of effective production planning. It involves regularly evaluating production processes, identifying areas for improvement, and implementing changes to enhance efficiency and quality.

By fostering a culture of continuous improvement, businesses can drive innovation, optimise resource utilisation, and stay ahead of competitors. Techniques such as Kaizen, Six Sigma, and value stream mapping can help businesses identify inefficiencies, eliminate waste, and streamline production workflows.

Frequently Asked Questions (FAQs)

What is the role of a production plan in business planning.

A1: A production plan plays a crucial role in business planning by providing a roadmap for efficient production processes. It helps align production capabilities with customer demand, optimise resource utilisation, and ensure timely delivery of products or services.

How does a production plan affect overall business profitability?

A2: A well-developed production plan can significantly impact business profitability. By optimising production processes, reducing costs, and enhancing product quality, businesses can improve their profit margins and gain a competitive edge in the market.

What are the common challenges faced in production planning?

A3: Production planning can present various challenges, such as inaccurate demand forecasting, capacity constraints, supply chain disruptions, and quality control issues. Overcoming these challenges requires robust planning, effective communication, and the implementation of appropriate strategies and technologies.

What is the difference between short-term and long-term production planning?

A4: Short-term production planning focuses on immediate production requirements, such as daily or weekly schedules. Long-term production planning, on the other hand, involves strategic decisions related to capacity expansion, technology investments, and market expansion, spanning months or even years.

How can a production plan be adjusted to accommodate changes in demand?

A5: To accommodate changes in demand, businesses can adopt flexible production strategies such as agile manufacturing or dynamic scheduling. These approaches allow for quick adjustments to production levels, resource allocation, and inventory management based on fluctuating customer demand.

In conclusion, a well-crafted production plan is essential for business success. By incorporating a production plan into a comprehensive business plan, entrepreneurs can optimise resource utilisation, meet customer demands, enhance product quality, and drive profitability. Through effective demand forecasting, capacity planning, inventory management, resource allocation, and quality assurance, businesses can streamline production processes and gain a competitive edge in the market.

People Also Like to Read...

Are You Ready For Your Expansion Plans?

How To Build Your Digital Marketing Plan

© 2016 - 2024 Robin Waite. All rights reserved.

Manufacturing Business Plan PDF Example

• May 7, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful manufacturing business. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your manufacturing business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a manufacturing business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the manufacturing industry, this guide, complete with a business plan example, lays the groundwork for turning your manufacturing business concept into reality. Let’s dive in!

Our manufacturing business plan covers all essential aspects necessary for a comprehensive strategy. It details operations, marketing strategy , market environment, competitors, management team, and financial forecasts.

• Executive Summary : Provides an overview of the manufacturing company’s business concept, market analysis , management, and financial strategy.
• Facilities & Equipment: Describes the facility’s capabilities, machinery, and technological advancements.
• Operations & Supply: Outlines the production processes, supply chain logistics, and inventory management.
• Key Stats: Offers data on industry size , growth trends, and market positioning.
• Key Trends: Highlights significant trends impacting the industry, such as automation and localization.
• Key Competitors : Analyzes primary competitors and differentiates the company from these rivals.
• SWOT: Analyzes strengths, weaknesses, opportunities, and threats.
• Marketing Plan : Outlines tactics for attracting new contracts and maintaining client relationships.
• Timeline : Sets out key milestones from inception through the first year of operations.
• Management: Information on the management team and their roles within the company.
• Financial Plan: Projects the company’s financial performance over the next five years, detailing revenue, profits, and anticipated expenses.

{{product_image|large}}

Manufacturing Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

{{product_image|medium}}

Executive Summary

The Executive Summary introduces your manufacturing business plan, offering a concise overview of your manufacturing facility and its products. It should detail your market positioning, the range of products manufactured, the production process, its location, size, and an outline of day-to-day operations.

This section should also explore how your manufacturing business will integrate into the local and broader markets, including the number of direct competitors within the area, identifying who they are, along with your business’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the business’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your business’s financial plan.

Make sure to cover here _ Business Overview _ Market Overview _ Management Team _ Financial Plan

Dive deeper into Executive Summary

Business Overview

Facilities & equipment.

Describe your manufacturing facility. Highlight its design, capacity, and technology. Mention the location, emphasizing accessibility to transport routes. Discuss advantages for efficiency and cost management. Detail essential equipment and its capabilities.

Operations & Supply Chain

Detail product range. Outline your operations strategy for efficiency and scalability. Discuss supply chain management. Highlight sourcing of materials, inventory control, and logistics. Emphasize strong partnerships with suppliers and distributors.

Make sure to cover here _ Facilities & Equipment _ Operations & Supplies

Market Overview

Industry size & growth.

Start by examining the size of the manufacturing industry relevant to your products and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing demand for sustainable manufacturing processes, automation, and advanced materials. For example, highlight the demand for products that utilize eco-friendly materials or energy-efficient production techniques, alongside the rising popularity of smart manufacturing.

Key Competitors

Then, consider the competitive landscape, which includes a range of manufacturers from large-scale enterprises to niche firms. For example, emphasize what makes your business distinctive, whether it’s through advanced technology, superior product quality, or specialization in certain manufacturing niches. This section will help articulate the demand for your products, the competitive environment, and how your business is positioned to thrive within this dynamic market.

Make sure to cover here _ Industry size & growth _ Key competitors _ Key market trends

Dive deeper into Key competitors

First, conduct a SWOT analysis for your manufacturing business. Highlight Strengths such as advanced production technology and a skilled workforce. Address Weaknesses, including potential supply chain vulnerabilities or high production costs. Identify Opportunities like emerging markets for your products or potential for innovation in production processes. Consider Threats such as global competition or economic downturns that may impact demand for your products.

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising, trade shows, digital marketing, and strategic partnerships. Emphasize the importance of showcasing product quality and technological advantages to differentiate your business in the market.

Finally, create a detailed timeline that outlines critical milestones for your manufacturing business’s launch, marketing initiatives, customer acquisition, and expansion goals. Ensure the business progresses with clear direction and purpose, setting specific dates for achieving key operational and sales targets.

Make sure to cover here _ SWOT _ Marketing Plan _ Timeline

Dive deeper into SWOT

Dive deeper into Marketing Plan

The Management section focuses on the manufacturing business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the manufacturing business toward its financial and operational goals.

For your manufacturing business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your manufacturing business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your manufacturing business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

Related Posts

Pro One Janitorial Franchise Costs $9K – $76K (2024 Fees & Profits)

• July 5, 2024

Dance Studio Business Plan PDF Example

• June 17, 2024

Carpet and Upholstery Cleaning Business Plan PDF Example

Privacy overview.

Manufacturing Business Plan Template

Written by Dave Lavinsky

Manufacturing Business Plan

Over the past 20+ years, we have helped over 7,000 entrepreneurs and business owners create business plans to start and grow their manufacturing businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a manufacturing business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Manufacturing Business Plan?

A business plan provides a snapshot of your manufacturing business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Manufacturing Company

If you’re looking to start a new manufacturing business, or grow your existing manufacturing business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your manufacturing business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Manufacturing Businesses

With regards to funding, the main sources of funding for a manufacturing business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

Personal savings is the other most common form of funding for a manufacturing business. Venture capitalists will usually not fund a manufacturing business. They might consider funding a manufacturing business with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.  With that said, personal savings and bank loans are the most common funding paths for manufacturing businesses.

Finish Your Business Plan Today!

How to write a business plan for a manufacturing company.

If you want to start a manufacturing business or expand your current one, you need a business plan. Below we detail what you should include in each section of your own business plan:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of manufacturing business you are operating and the status. For example, are you a startup, do you have a manufacturing business that you would like to grow, or are you operating a chain of manufacturing businesses?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the manufacturing industry. Discuss the type of manufacturing business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing strategy. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of business you are operating.

There are many types of manufacturing businesses, such as:

• Clothing manufacturing
• Garment manufacturing
• Food product manufacturing
• Diaper manufacturing
• Tile manufacturing
• Toy manufacturing
• Soap and detergent manufacturing
• Mobile accessories manufacturing
• Mattress manufacturing
• Bicycle manufacturing
• Pillow manufacturing
• Brick manufacturing
• Toilet paper manufacturing
• Furniture manufacturing
• Peanut butter manufacturing
• Cosmetics manufacturing
• Footwear manufacturing

In addition to explaining the type of manufacturing business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, number of wholesale contracts, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the manufacturing industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the manufacturing industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section:

• How big is the manufacturing industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your manufacturing business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of target market segments: wholesalers, other manufacturers, exports, retailers.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of manufacturing business you operate. Clearly, retailers would respond to different marketing promotions than export markets, for example.

Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most manufacturing businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Manufacturing Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other manufacturing businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes manufacturers in other niches, as well as those vertically integrated businesses that make their own product. You need to mention such competition as well.

With regards to direct competition, you want to describe the other manufacturing businesses with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of products do they manufacture?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide high quality manufacturing practices?
• Will you provide services that your competitors don’t offer?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a manufacturing business, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of manufacturing company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to manufacturing, will you provide R&D, design, prototyping or any other services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your manufacturing company. Document your location and mention how the location will impact your success. For example, is your manufacturing business located near a distribution hub, etc. Discuss how your location might be the ideal location for your customers.

Promotions : The final part is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your manufacturing business, including sourcing inputs, designing processes, managing production, coordinating logistics and meeting with potential buyers.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to secure your 1,000 th contract, or when you hope to reach $X in revenue. It could also be when you expect to expand your manufacturing business to a new city.  

Management Team

To demonstrate your manufacturing business’ ability to succeed, a strong team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in managing manufacturing businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in manufacturing or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you offer short-run production, or will you focus strictly on long-run? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your manufacturing business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a manufacturing business:

• Location build-out including design fees, construction, etc.
• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your production facility blueprint, or capabilities specifications.  

Putting together a business plan for your manufacturing business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the manufacturing industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful manufacturing business.

Don’t you wish there was a faster, easier way to finish your Manufacturing business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Launching soon – Support us on Product Hunt 🐱 and get 50% off your first month!   Get 50% Off →

• Sample Business Plans
• Manufacturing & Wholesale

Manufacturing Business Plan

If you are planning to start a new manufacturing , fabrication, or production business, the first thing you will need is a business plan. Use our business plan example created using upmetrics business plan software to start writing your business plan in no time.

Before you start writing your business plan for your new manufacturing business, spend as much time as you can reading through some examples of manufacturing, fabrication, or production business plans.

Reading some sample business plans will give you a good idea of what you’re aiming for. Also, it will show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this business plan example for you to get a good idea about how a perfect manufacturing business plan should look like and what details you will need to include in your stunning business plan.

Manufacturing Business Plan Example Outline

This is the standard business plan outline which will cover all important sections that you should include in your business plan.

• Business Profile Summary
• Market Research Summary
• Marketing Summary
• Business Description
• Unique Value Proposition
• Company History
• Legal Structure
• Vision & Mission
• Professional Advisors
• Goals & Objectives
• Premium Sustainable Leather Designer Bag
• Alternate Sustainable Material Bag
• Heirloom Limited Edition Bag
• Basic Purse
• Industry Profile & Outlook
• Local Market
• Ci Comme Ca
• Target Market
• Customer Survey Summary
• Premium Sustainable Leather Material Bag
• Digital Marketing
• In-Person Marketing
• Print Marketing
• Location(s)
• Legal Issues
• Insurance Issues
• Jennifer Martinez
• Packaging/Shipping/Handling
• Manufacturing Assistant
• Marketing Designer
• Production Flow and Delivery Method of Products and Services
• Risk Assessment
• Breakeven analysis
• Projected Profit and Loss
• Projected Cash Flow
• Projected Balance Sheet

Say goodbye to boring templates

Build your business plan faster and easier with AI

Plans starting from $7/month

After  getting started with upmetrics , you can copy this manufacturing business plan example into your business plan and modify the required information and download your manufacturing business plan pdf and doc file . It’s the fastest and easiest way to start writing your business plan.

What to include in a manufacturing business plan?

Now before you go ahead and write your plan, we’ll discuss a few main sections that’ll help you write a well-rounded plan:

1. Executive Summary

The executive summary section of your business plan sums up everything that your business stands for. It consists of a summary of all the major sections of your business plan including the mission and vision statement, market research, marketing, and finances.

If you want to explain your business idea to someone in under 10 minutes, an executive summary would do the job. If you plan on getting funded, write a good and well-rounded executive summary as this is probably the only section your investor would read.

For example, if you are going to manufacture bags your executive summary would consist of a brief description of your target audience, your product, major points of market analysis and financial plan, your funding requirements and how would you provide a return on that funding.

2. Business description

This section consists of information about your company ranging from your product, and the size of your team to your legal structure. It describes the aims and objectives of your business and what you do to fulfill them.

This section sums up the structural and legal aspects of your business. It serves as a reference whenever you want to make changes to your company’s structure.

Continuing the above example of a bag manufacturing unit, your business description would consist of the following things:

• The part of bag production your unit participates in.
• The number of employees and their position in your company.
• The legal structure of your business .
• The market needs your business fulfilled.

3. Product Description

This section consists of a detailed description of your product, the market it caters to, and your pricing strategy.

This section helps you define your product clearly and concisely. It also helps your customers understand your product and its purpose better.

For example, as a bag manufacturing unit, you will note down the size, the material, and the type of bags you manufacture.

4. Market Research

This section would consist of everything you can find out about your industry through research. It consists of an overview of your industry, market size, major competitors, and target market.

This section comes in handy for formulating your marketing strategy and for finding your USP. Moreover, it helps you optimize your product as per the tastes and preferences of your customers.

For example, like a bag manufacturing business, you’ll research the bag industry, the local market, what market segments buy bags, out of them who will be your target audience, and finally what kind of bags your target audience prefers.

5. Sales and Marketing Strategy

This section would consist of the mediums you will use for reaching out to your target audience. It would also consist of methods of highlighting your USP for attracting a customer’s attention toward your product.

This section is necessary for letting your target audience know about your existence. You can promote your product through various mediums like print, advertising, digital media, etc.

For example, like a bag manufacturing business, your target audience will be bag wholesalers and retailers, you’ll have to find what kind of bags they prefer buying, what terms and conditions do they prefer, and what medium you can use for reaching out to them.

While selling your bags you must always try to find a middle ground between the deal the wholesaler or retailer wants and the one you are willing to offer.

6. Operations Plan

Your operations plan consists of your goals and aims for your business, as well as the ways for achieving them. It typically describes what an average day at your business would look like, and what target would your daily business activities help in fulfilling.

Your operations plan helps you stay organized as a business. It also helps you manage your business smoothly and efficiently.

Continuing the above example your operations plan would consist of the number of bags you’ll manufacture per day, the sales and marketing you’ll carry out on a daily, weekly, or bi-weekly basis, etc.

7. Financial Plan

The financial plan section consists of your funding requirements, projected balance sheet, cash flow , and profits.

A good financial plan helps your business in becoming a profitable one. Moreover, it keeps your business afloat during difficult times.

As a manufacturing business, you will include your cost of production, the number of units you’ll have to sell to reach the break-even point , and how you will optimize the production cost and other miscellaneous costs to make your business a profitable one.

Download a sample manufacturing business plan

Need help writing your business plan from scratch? Here you go; download our free manufacturing business plan pdf to start.

It’s a modern business plan template specifically designed for your manufacturing business. Use the example business plan as a guide for writing your own.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Manufacturing business plan summary

In conclusion, a manufacturing business plan can help you decide everything ranging from your production to marketing and pricing strategy.

Moreover, it eliminates the hassles of doing business and helps you manage your business better. It also helps you recognize loopholes in your ideas and way of working.

Above all, a business plan prepares you equally for threats and opportunities. So if you want to start your manufacturing business, go ahead and start planning.

Related Posts

Clothing Manufacturer Business Plan

Furniture Manufacturing Business Plan

400+ Business Plan Sample

Write Business Plan Cover Page

Best Business Plan Writers

Competitive Analysis Process Guide

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

Plan your business in the shortest time possible

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee

Create a great Business Plan with great price.

• 400+ Business plan templates & examples
• AI Assistance & step by step guidance
• 4.8 Star rating on Trustpilot

Streamline your business planning process with Upmetrics .

Manufacturing Business Plan Template & Guidebook

Starting a manufacturing business is an exciting endeavor, but it can be daunting to know where to start. Fortunately, the #1 Manufacturing Business Plan Template & Guidebook provides entrepreneurs and businesses with a detailed roadmap for success. With this template and guidebook, you will have the guidance you need to plan for success and develop a comprehensive business plan that outlines your vision and strategy.

Get worry-free services and support to launch your business starting at $0 plus state fees.

• How to Start a Profitable Manufacturing Business [11 Steps]
• 10+ Best & Profitable Manufacturing Business Ideas [2023]
• 25 Catchy Manufacturing Business Names:
• List of the Best Marketing Ideas For Your Manufacturing Business:

How to Write a Manufacturing Business Plan in 7 Steps:

1. describe the purpose of your manufacturing business..

The first step to writing your business plan is to describe the purpose of your manufacturing business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a manufacturing business:

Our mission at [Company Name] is to be the premier provider of innovative, high-quality manufacturing solutions that meet our customers' needs, while delivering superior customer service and providing a safe and rewarding workplace for our employees.

2. Products & Services Offered by Your Manufacturing Business.

The next step is to outline your products and services for your manufacturing business. 

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

• What is my business?
• What are the products and/or services that I offer?
• Why am I offering these particular products and/or services?
• How do I differentiate myself from competitors with similar offerings?
• How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your manufacturing business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals. 

A good marketing plan for your manufacturing business includes the following elements:

Target market

• Who is your target market?
• What do these customers have in common?
• How many of them are there?
• How can you best reach them with your message or product?

Customer base 

• Who are your current customers? 
• Where did they come from (i.e., referrals)?
• How can their experience with your manufacturing business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

• How does it work, what features does it have, and what are its benefits?
• Can anyone use this product or service regardless of age or gender?
• Can anyone visually see themselves using this product or service?
• How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

• Which companies are competing with yours today (and why)? 
• Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
• What specific advantages does each competitor offer over yours currently?

Marketing channels

• Which marketing channel do you intend to leverage to attract new customers?
• What is your estimated marketing budget needed?
• What is the projected cost to acquire a new customer?
• How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations. 

In it, you should list:

• The equipment and facilities needed
• Who will be involved in the business (employees, contractors)
• Financial requirements for each step
• Milestones & KPIs
• Location of your business
• Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a manufacturing business?

• Manufacturing equipment
• Raw materials
• Safety equipment and supplies
• Labor and skilled workers
• Legal permits and licensing as required by local ordinance

5. Management & Organization of Your Manufacturing Business.

The second part of your manufacturing business plan is to develop a management and organization section.

This section will cover all of the following:

• How many employees you need in order to run your manufacturing business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
• The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
• How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Manufacturing Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a manufacturing business varies based on many different variables, but below are a few different types of startup costs for a manufacturing business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your manufacturing business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your manufacturing business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses. 

Here are some steps you can follow to devise a financial plan for your manufacturing business plan:

• Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
• Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
• Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
• Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
• Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
• Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Manufacturing Business Plans:

Why do you need a business plan for a manufacturing business.

A business plan for a manufacturing business is essential because it serves as a guide to help the business plan its activities and reach its desired goals. It provides important information such as market analysis, strategy, financial projections, and operational plans. Additionally, it can serve as an important tool to attract potential investors or lenders and help secure funding.

Who should you ask for help with your manufacturing business plan?

You should consult a qualified business consultant, accountant, and/or lawyer who specialise in assisting companies with their manufacturing business plans. Additionally, it is a good idea to reach out to trade organisations, industry bodies, and experts in the manufacturing sector for guidance.

Can you write a manufacturing business plan yourself?

Yes, you can write a manufacturing business plan yourself. Depending on the complexity of your plan, you may want to research best practices and consult experts in the field if necessary. When writing a manufacturing business plan, it is important to include a market analysis, competitive analysis, operations plan, financial projections, and strategic plan. Additionally, you should also include key objectives, milestones and management strategies.

Related Business Plans

Home Inventory Business Plan Template & Guidebook

Home Inspection Business Plan Template & Guidebook

Home Decor Business Plan Template & Guidebook

Health And Wellness Business Plan Template & Guidebook

Hauling Business Plan Template & Guidebook

Hardware Business Plan Template & Guidebook

Handyman Business Plan Template & Guidebook

Hair Extension Business Plan Template & Guidebook

Handbag Business Plan Template & Guidebook

We're newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.

• Contact sales

Start free trial

Process Planning: Steps, Types & Benefits

Manufacturers need to have a process by which to make or assemble their products. Before they go into production, therefore, they must engage in what’s called process planning. This is an important step before manufacturing and must be thoroughly understood.

Learn what process planning is, including why it’s so important and the different types there are. Then find out the steps to process planning and see what a manufacturing process plan is and why it benefits production.

What Is Process Planning?

Process planning is how manufacturers determine the sequence of operations that they’ll take to produce a part or make an assembly leading to the finished goods. When working in a job shop that produces one-of-a-kind products or where the same product is mass-produced, process planning is incredibly important.

However, all manufacturers benefit from process planning. That’s because process planning is the bridge between product design and product manufacturing. The purpose of process planning is to develop the most efficient sequence of operations. This includes having the right equipment and tools and meeting product requirements and specifications.

All of this is done to reduce costs and increase productivity. Manufacturers have two ways to achieve these goals; one is manual process planning and the other is using software to aid in process planning.

ProjectManager is award-winning software that helps manufacturers with process planning by using visual workflow tools such as our kanban boards. You can create custom, automated workflows and centralize process planning for full-team visibility. To ensure that only quality moves forward, create task approvals and only authorized managers will be able to approve the job. Get started with ProjectManager today for free.

Benefits of Process Planning

Any kind of planning is always important in manufacturing or, frankly, any industry. You never want to wing it, not when there are money and people’s livelihoods involved. But that’s just a general benefit, there are more specific reasons why manufacturers want to use process planning.

For one, it helps manufacturers evaluate other ways of operating when it comes to the production of their goods. That way they can look at where they’re maximizing resource utilization and how they can better optimize throughput from the start of the production life cycle. In other words, they can better strategize their manufacturing operations to deliver on their goals.

Process planning also gives manufacturers the flexibility to quickly shift production if they find a better way of doing things, such as increasing production efficiencies. It also helps deliver consistent quality over multiple production lines or plants. That means reducing the time to market, which improves customer satisfaction and retention.

Types of Process Planning

There are three main types of process planning: manual process planning, computer-aided process planning and generative process planning. Let’s take a moment to explore each of these.

Manual Process Planning

Also known as man-variant process planning, this is the most commonly used type of process planning. A process planner will select the combination of processes needed to produce the finished part. These are engineering drawings that define the part requirements and the availability and capabilities of machines and processes. The selection leads to criteria, such as production costs or time, machine utilization and routine will also impact the plan. Usually, the criteria are based on a family of parts rather than the processes and machines needed to produce a single part.

Computer-Aided Process Planning

This is a more efficient type of process planning, less tedious and less likely to make mistakes. Automating process planning systems removes the human element in the steps between preparing engineering drawings and finishing the process plan for all manufacturing operations. There still must be human oversight to ensure compatibility with the available processes. Whether to turn, mill or stamp is determined by the product requirements , quantities ordered and capabilities of the processes. This still reduces process planning time, and the skills required of a process planner and makes for more consistent and accurate plans that increase productivity and reduce costs.

Generative Process Planning

Generative process planning takes in-process information and uses it to automatically create a process plan for a new component. This information is pulled from manufacturing databases and doesn’t involve much human oversight. After reviewing the design, the operation sequence is automatically produced. Of course, the software must be encoded with knowledge of manufacturing. In fact, machine selection, tool selection, process optimization and more can also be automated by this system. There are hurdles to clear, however, such as transforming component data and decision rules into the system.

Get your free

Production Schedule Template

Use this free Production Schedule Template for Excel to manage your projects better.

What Is a Manufacturing Process Plan?

A manufacturing process plan defines the steps from product design and development to the manufacturing processes used to create the finished product. It includes operation sequencing, machine process planning, assembly process planning and assembly line planning.

What Should You Consider When Creating a Process Plan?

When you’re putting together a process plan, you’ll want to be flexible. For example, you might need to restructure the engineering bill of materials (all materials and instructions needed for assemblage) so that it reflects the realities of your manufacturing situation. Some assemblies will be made in-house and others not. The process plan needs to bring all this together in one plan.

You’ll also have to think about new relationships between parts. Processes that have multiple parts need to have specific steps to be properly completed. Therefore, you’ll have to manage three aspects; the resources, tools and machines you’re using in your production process . These will be used in different relations to one another depending on the assembly.

There’s also the manufacturing bill of materials, which is different from the engineering bill of materials. That’s because manufacturing involves the complexity of turning one unique structure into another. These steps must be planned out in order not to miss something important.

The manufacturing process plan must also meet the engineering parts, CAD visuals, requirements, deliverables and other assets’ quality expectations. Therefore, the plan must provide information to ensure that these processes are accurate and efficiently done while providing transparency to other teams, such as engineering, in the overall process.

Free Production Schedule Template

There are many things to think about when creating a process plan in manufacturing, and you can’t forget to create and implement a production schedule to keep your project on track. Download this free production schedule for Excel to track order status, product quantities, production dates and more.

Process Planning Steps

To implement your process plan, you have to follow several steps. Following these steps helps find the most efficient path from product design to product manufacturing to accomplish your objectives. Below are the basic steps you should take.

1. Identify Inputs and Outputs of Your Manufacturing Process

Inputs are the materials and other resources that you’ll use to create the finished product. These can be labor, materials, facilities, equipment and so forth. The outputs are the finished products that’ll be delivered to customers. Therefore, it’s crucial to understand what will go in and come out of your manufacturing process to manage that process, reduce waste and increase productivity.

2. Map Out Your Workflows

The workflow maps the activities that will achieve a certain result. This is a crucial part of the process plan as it visualizes processes from start to finish and helps make clear each step in that path, including resources needed to complete the work. It’s also a quality assurance measure as workflows are repeatable and consistent in producing your products.

3. Create Documentation for Production Operators

These documents include everything from production prints to schematics and circuit layouts for associated electronics. You’ll also want to create a bill of materials to gather all the resources needed to build your product and directions for how it will be assembled. Other documentation includes status reports, invoices, batch records to identify job numbers and personnel.

4. Train Your Employees

Plan training and exercises for your personnel. This is an important step to make sure everyone knows what they have to do and how they should do it. This step is critical to building confidence in your workforce as well as motivating them to do their jobs well.

ProjectManager Helps With Process Planning

Process planning takes users’ instructions and from there figures out what is necessary to turn inputs into outputs. That process is facilitated by project management software that can help you track schedules and monitor progress. ProjectManager is award-winning software that gives you the tools you need to plan, manage and track production in real time. Our tool gives you the features you need to sequence operations and prepare for manufacturing and then make sure you’re staying on track during production.

Track Production Schedules With Gantt Charts

Production schedules rely on resource planning, estimation and forecast demand as well as knowing your inventory and monitoring progress. Our robust Gantt charts allow you to organize tasks, resources and costs. Then you can set a baseline to capture the process plan and be able to compare it to your actual progress in real time. Now you can quickly catch issues that are causing delays and easily adjust the Gantt chart to make production more efficient.

Monitor Progress & Budgets With Real-Time Dashboards

Of course, once production is running, process planners need to keep an eye on progress to make sure everything is going as planned. Setting the baseline in the Gantt means that you can monitor production from various tools on our software. For instance, you can get a high-level view of production on one or all of your projects with the real-time dashboard . It automatically collects data and displays metrics such as time, cost, workload and more in easy-to-read graphs and charts. Unlike lightweight tools, there’s no time-consuming configuration required, even with our portfolio dashboard that shows metrics across all of your projects.

Other tools can help with process planning. For example, our customizable reports are easy to generate and provide more detail on aspects of production, such as timesheets, variance and status reports. All can be filtered to focus only on the data you’re interested in to better run your production line. Reports can also be shared in a variety of formats or printed out to keep stakeholders updated.

ProjectManager is online project management software that empowers process planners to plan, manage and track production in real time. There are also task management, resource management and risk management features that keep manufacturing running smoothly. Get started with ProjectManager today for free.

Deliver your projects on time and on budget

Start planning your projects.

Business Plan Example and Template

Learn how to create a business plan

What is a Business Plan?

A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing .

A business plan should follow a standard format and contain all the important business plan elements. Typically, it should present whatever information an investor or financial institution expects to see before providing financing to a business.

Contents of a Business Plan

A business plan should be structured in a way that it contains all the important information that investors are looking for. Here are the main sections of a business plan:

1. Title Page

The title page captures the legal information of the business, which includes the registered business name, physical address, phone number, email address, date, and the company logo.

2. Executive Summary

The executive summary is the most important section because it is the first section that investors and bankers see when they open the business plan. It provides a summary of the entire business plan. It should be written last to ensure that you don’t leave any details out. It must be short and to the point, and it should capture the reader’s attention. The executive summary should not exceed two pages.

3. Industry Overview

The industry overview section provides information about the specific industry that the business operates in. Some of the information provided in this section includes major competitors, industry trends, and estimated revenues. It also shows the company’s position in the industry and how it will compete in the market against other major players.

4. Market Analysis and Competition

The market analysis section details the target market for the company’s product offerings. This section confirms that the company understands the market and that it has already analyzed the existing market to determine that there is adequate demand to support its proposed business model.

Market analysis includes information about the target market’s demographics , geographical location, consumer behavior, and market needs. The company can present numbers and sources to give an overview of the target market size.

A business can choose to consolidate the market analysis and competition analysis into one section or present them as two separate sections.

5. Sales and Marketing Plan

The sales and marketing plan details how the company plans to sell its products to the target market. It attempts to present the business’s unique selling proposition and the channels it will use to sell its goods and services. It details the company’s advertising and promotion activities, pricing strategy, sales and distribution methods, and after-sales support.

6. Management Plan

The management plan provides an outline of the company’s legal structure, its management team, and internal and external human resource requirements. It should list the number of employees that will be needed and the remuneration to be paid to each of the employees.

Any external professionals, such as lawyers, valuers, architects, and consultants, that the company will need should also be included. If the company intends to use the business plan to source funding from investors, it should list the members of the executive team, as well as the members of the advisory board.

7. Operating Plan

The operating plan provides an overview of the company’s physical requirements, such as office space, machinery, labor, supplies, and inventory . For a business that requires custom warehouses and specialized equipment, the operating plan will be more detailed, as compared to, say, a home-based consulting business. If the business plan is for a manufacturing company, it will include information on raw material requirements and the supply chain.

8. Financial Plan

The financial plan is an important section that will often determine whether the business will obtain required financing from financial institutions, investors, or venture capitalists. It should demonstrate that the proposed business is viable and will return enough revenues to be able to meet its financial obligations. Some of the information contained in the financial plan includes a projected income statement , balance sheet, and cash flow.

9. Appendices and Exhibits

The appendices and exhibits part is the last section of a business plan. It includes any additional information that banks and investors may be interested in or that adds credibility to the business. Some of the information that may be included in the appendices section includes office/building plans, detailed market research , products/services offering information, marketing brochures, and credit histories of the promoters.

Business Plan Template

Here is a basic template that any business can use when developing its business plan:

Section 1: Executive Summary

• Present the company’s mission.
• Describe the company’s product and/or service offerings.
• Give a summary of the target market and its demographics.
• Summarize the industry competition and how the company will capture a share of the available market.
• Give a summary of the operational plan, such as inventory, office and labor, and equipment requirements.

Section 2: Industry Overview

• Describe the company’s position in the industry.
• Describe the existing competition and the major players in the industry.
• Provide information about the industry that the business will operate in, estimated revenues, industry trends, government influences, as well as the demographics of the target market.

Section 3: Market Analysis and Competition

• Define your target market, their needs, and their geographical location.
• Describe the size of the market, the units of the company’s products that potential customers may buy, and the market changes that may occur due to overall economic changes.
• Give an overview of the estimated sales volume vis-à-vis what competitors sell.
• Give a plan on how the company plans to combat the existing competition to gain and retain market share.

Section 4: Sales and Marketing Plan

• Describe the products that the company will offer for sale and its unique selling proposition.
• List the different advertising platforms that the business will use to get its message to customers.
• Describe how the business plans to price its products in a way that allows it to make a profit.
• Give details on how the company’s products will be distributed to the target market and the shipping method.

Section 5: Management Plan

• Describe the organizational structure of the company.
• List the owners of the company and their ownership percentages.
• List the key executives, their roles, and remuneration.
• List any internal and external professionals that the company plans to hire, and how they will be compensated.
• Include a list of the members of the advisory board, if available.

Section 6: Operating Plan

• Describe the location of the business, including office and warehouse requirements.
• Describe the labor requirement of the company. Outline the number of staff that the company needs, their roles, skills training needed, and employee tenures (full-time or part-time).
• Describe the manufacturing process, and the time it will take to produce one unit of a product.
• Describe the equipment and machinery requirements, and if the company will lease or purchase equipment and machinery, and the related costs that the company estimates it will incur.
• Provide a list of raw material requirements, how they will be sourced, and the main suppliers that will supply the required inputs.

Section 7: Financial Plan

• Describe the financial projections of the company, by including the projected income statement, projected cash flow statement, and the balance sheet projection.

Section 8: Appendices and Exhibits

• Quotes of building and machinery leases
• Proposed office and warehouse plan
• Market research and a summary of the target market
• Credit information of the owners
• List of product and/or services

Related Readings

Thank you for reading CFI’s guide to Business Plans. To keep learning and advancing your career, the following CFI resources will be helpful:

• Corporate Structure
• Three Financial Statements
• Business Model Canvas Examples
• See all management & strategy resources
• Share this article

Create a free account to unlock this Template

Access and download collection of free Templates to help power your productivity and performance.

Already have an account? Log in

Supercharge your skills with Premium Templates

Take your learning and productivity to the next level with our Premium Templates.

Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI's full course catalog and accredited Certification Programs.

Already have a Self-Study or Full-Immersion membership? Log in

Access Exclusive Templates

Gain unlimited access to more than 250 productivity Templates, CFI's full course catalog and accredited Certification Programs, hundreds of resources, expert reviews and support, the chance to work with real-world finance and research tools, and more.

Already have a Full-Immersion membership? Log in

Develop A Manufacturing Strategy That Works: Examples, Tips & Free Template

Manufacturing companies need a rock-solid strategic plan to thrive in today's ultra-competitive business environment. But, let's face it, executing that plan with precision and consistency is where the real hustle begins.

According to Deloitte , “In 2024, manufacturers are expected to face economic uncertainty, the ongoing shortage of skilled labor, lingering and targeted supply chain disruptions, and new challenges spurred by the need for product innovation.”

But hey, with a solid plan in place and the ability to pivot on a dime, you can overcome these challenges and come out on top!

In this article, we'll explore the ins and outs of manufacturing strategy, from its key elements and benefits to best practices and success stories. And to make your life easier, we'll also hook you up with Cascade's manufacturing strategy templates —a powerful tool for crushing your goals!

What Is A Manufacturing Strategy?

A manufacturing strategy outlines how a company will use its resources to produce goods and services that meet the needs of its customers while achieving its financial goals. It involves a range of considerations, including the allocation of resources , the use of technology and equipment, the management of inventory and supply chains, and the optimization of production processes to achieve the company's overall business goals.

A well-designed manufacturing strategy can help a company optimize its operations, increase efficiency, reduce costs, improve quality, and ultimately increase profitability.

What Are The Key Elements Of A Manufacturing Strategy?

To develop an effective manufacturing strategy, a company must consider several key elements. While the specific goals, initiatives, and objectives may vary, some essential components are common to all successful strategies.

Product development and design

This involves creating products that meet customer needs while being produced efficiently. Key considerations include product features, specifications, functionality, and cost.

For instance, a company designing a new smartphone would need to decide on the size, weight, screen resolution, processing power, camera quality, and other features that meet the target market's needs.

Technology and equipment

Selecting and deploying appropriate manufacturing technology and equipment is crucial to manufacturing products efficiently and effectively. This includes deciding on equipment types, maintenance, and updates.

For example, an organization may invest in robotic equipment to automate its assembly line, resulting in faster and more accurate production and reduced labor costs.

Sourcing and management of materials

Identifying and sourcing raw materials and supplies are crucial components to ensure the efficient manufacturing of products. Key considerations include the quality, availability, and cost of the materials.

As an example, a company may source high-quality leather from a reliable supplier to produce premium leather bags.

Production processes and operations

Managing production processes and manufacturing operations is essential to ensure the efficient and effective manufacturing of products. Key considerations include resource use, labor management, and quality control.

A company may adopt lean manufacturing principles, for example, to optimize its production processes and eliminate waste, leading to reduced costs and increased efficiency.

Quality control and assurance

Implementing quality control and assurance measures ensures that products meet customer specifications and quality standards. Key considerations include testing, inspection, and continuous improvement.

A company may use statistical process control to monitor and improve product quality, resulting in fewer defects and higher customer satisfaction.

Inventory management and logistics

Managing inventory levels and logistics is essential to ensure products are available when and where needed. Key considerations include inventory control, order fulfillment, and supply chain management.

For instance, a company may use just-in-time inventory management to minimize inventory holding costs while ensuring on-time delivery to customers.

Continuous improvement and innovation

Continually improving and innovating manufacturing processes enhances efficiency, reduces costs, and improves product quality. Key considerations include the adoption of new technologies, process improvements, and customer feedback.

For instance, a company may use customer feedback to design and launch new products that meet evolving market needs, such as a smartphone with a longer battery life or a car with advanced safety features.

What Are The Benefits Of A Manufacturing Strategy?

A well-designed manufacturing strategy can offer numerous benefits to a company, including:

• Improved efficiency : Optimizing production processes can reduce costs and increase profitability by allowing a company to produce goods more efficiently. ‍
• Increased flexibility : Responding to changes in demand or the market becomes easier with a strong manufacturing strategy in place, enabling a company to adjust production levels, product mix, or other factors as needed. ‍
• Better quality control : Implementing quality control measures improves product quality, reducing inefficiencies, the likelihood of defects or product recalls, and enhancing customer satisfaction. ‍
• Enhanced competitiveness : Manufacturing strategies can help companies produce goods more efficiently, offer better quality products, or deliver products more quickly than competitors, giving them a competitive edge in the marketplace. ‍
• Improved supply chain management : Better supply chain management, achieved through a manufacturing strategy, can lead to cost savings and better customer service by reducing lead times and improving reliability. ‍
• Greater innovation : Manufacturing strategies that focus on continuous improvement and innovation can help companies develop new products, processes, or technologies, which gives them a competitive advantage. ‍
• Increased profitability : By improving efficiency, quality, flexibility, and innovation, a manufacturing strategy can help a company increase its profitability and growth potential.

6 Examples Of Manufacturing Strategies To Adopt

Companies can adopt several manufacturing strategies, depending on their specific goals, market conditions, and production processes. Let’s take a look at some examples!

Lean Manufacturing

This strategy aims to reduce waste, increase efficiency, and improve quality by streamlining production processes and eliminating non-value-added activities. Companies that use this approach focus on continuous improvement, employee empowerment, and the use of visual management techniques.

Toyota is a well-known example of a company that has successfully implemented lean manufacturing practices. The Toyota Production System (TPS) empowers employees to identify and eliminate non-value-added activities in the production process to reduce waste, increase efficiency, and improve quality.

Mass Customization

Producing customized products on a large scale using flexible production processes and advanced technology is the focus of this strategy. Companies that use this approach aim to meet the individual needs of customers while achieving economies of scale through efficient production processes.

Nike uses mass customization to offer a wide range of personalized products to customers. Nike's iD program allows customers to customize the colors, materials, and other features of their shoes, which are then manufactured and delivered within a few weeks.

Agile Manufacturing

Emphasizing flexibility, responsiveness, and innovation, this strategy enables companies to quickly adapt to changes in demand or new product opportunities. Companies that use this approach typically have highly automated production processes, advanced data analytics capabilities, and a culture of continuous improvement.

Apple is known for its agile manufacturing practices, which enable the company to quickly respond to changes in demand and introduce new products to the market. Apple's advanced supply chain management and manufacturing processes enable rapid scaling of production and response to changes in customer demand.

Total Quality Management (TQM)

To improve product quality and customer satisfaction, this strategy embeds quality control and assurance measures throughout the production process. Companies focus on process improvements, employee involvement, and data-driven decision-making to achieve higher levels of quality and customer satisfaction.

Ford has implemented a TQM strategy to improve product quality and customer satisfaction. Ford's Quality Operating System (QOS) focuses on continuous improvement, employee involvement, and data-driven decision-making to achieve higher levels of quality and customer satisfaction.

Just-in-Time (JIT) Manufacturing

To minimize inventory levels, reduce waste in the production process, and produce goods based on customer demand, this strategy is used. Companies aim to achieve higher levels of efficiency, reduce costs, and improve customer responsiveness by producing and delivering products quickly and reliably.

Dell is known for its use of just-in-time manufacturing practices, producing and delivering custom-configured computers quickly and efficiently. Dell's advanced supply chain management and manufacturing processes enable the company to produce and deliver products in a matter of days.

Green Manufacturing

This strategy revolves around bolstering sustainability by mitigating the environmental impact of production processes, minimizing waste, and optimizing resource efficiency. Companies aim to meet the growing demand for sustainable products and production processes while achieving cost savings through reduced energy use, waste reduction, and improved supply chain management.

Patagonia sets the benchmark as an exemplary company that has implemented green manufacturing practices to reduce its environmental impact. Patagonia's Worn Wear program promotes repairing and reusing clothing, reducing the amount of waste that ends up in landfills. The company also uses sustainable materials and production processes to reduce its environmental impact.

Jumpstart Your Manufacturing Strategy With Customizable Templates!

Developing a manufacturing plan from scratch can be a challenging task. To ease this burden, we have designed multiple templates that offer a systematic approach to creating a manufacturing strategy.

These templates are flexible and can be tailored to meet the unique needs of your manufacturing business.

Manufacturing Strategy Template

Develop a clear and effective manufacturing strategy with our Manufacturing Strategy Template , a comprehensive tool that helps organizations develop a clear and effective manufacturing strategy. Customize it to fit your business needs, covering inventory, production, quality, supply chain, and performance measurement.

👉 Click here to start building your own.

Production & Manufacturing Strategy Template

Get a comprehensive plan for your production and manufacturing processes. Improve processes, plan capacity, manage quality, and handle supply chain. It’s easy-to-use and adaptable to different organizations.

Manufacturing Quality Plan Template

Our Manufacturing Quality Plan Template is ideal for companies looking to develop a quality plan for their manufacturing processes. It covers all aspects of quality management, including quality control, quality assurance, and quality improvement.

Manufacturing Capacity Plan Template

Manage your manufacturing capacity with a detailed plan with this template covering all aspects of capacity planning, including forecasting demand, managing production schedules, and optimizing resource utilization. It’s pre-filled with examples and easily adaptable to your organization.

Manufacturing Contingency Plan Template

Be prepared for contingencies in your manufacturing processes with this Manufacturing Contingency Plan Template. Identify potential risks, develop contingency plans, and implement measures to ensure your manufacturing business not only thrives but succeeds!

Common Manufacturing Sub-Industries (+ Templates)

Manufacturing is a diverse industry with many sub-industries, each with its own unique characteristics and challenges. Some of the most common manufacturing sub-industries include pharmaceutical, food and beverage, industrial, metal and mineral, and computer and electronic product manufacturing. Depending on the sub-industry, manufacturing strategies can vary significantly.

Pharmaceutical manufacturing requires strict compliance with regulations and quality standards. A manufacturing strategy for this sub-industry would focus on quality control and regulatory compliance. To create a manufacturing plan for pharmaceuticals, use our Pharmaceutical Manufacturing Strategy Template .

Food and beverage manufacturing , on the other hand, requires compliance with food safety regulations. A manufacturing strategy for this sub-industry would focus on supply chain management and inventory control. To create a manufacturing plan for food and beverage products, use our Food and Beverage Manufacturing Strategy Template .

Industrial manufacturing encompasses a wide range of products, including machinery, tools, and equipment. A manufacturing strategy for this sub-industry would focus on efficiency and cost-effectiveness. To create a manufacturing plan for industrial products, use our Industrial Manufacturing Plan Template .

Metal and mineral manufacturing involves the extraction and processing of raw materials, such as iron and aluminum, into finished products. A manufacturing strategy for this sub-industry would focus on reducing waste and improving resource efficiency. To create a manufacturing plan for metal and mineral products, use our Metal and Mineral Manufacturing Strategy Template .

Lastly, computer and electronic product manufacturing requires constant innovation and adaptation to keep up with rapid technological advancements. A manufacturing strategy for this sub-industry would focus on research and development, as well as supply chain management. To create a manufacturing plan for computer and electronic products, use our Computer and Electronic Product Manufacturing Strategy Plan Template .

Execute Your Manufacturing Strategy With Cascade 🚀

Getting started with your Manufacturing Strategy is easy with Cascade . Here’s a step-by-step guide to set it up and use it for your organization’s planning:

1. Get your manufacturing strategy template

Getting started with your manufacturing strategy template is as easy as 1, 2, 3.

• Choose one of the manufacturing templates shared in this article and click on the link.
• Sign up for a free forever account in Cascade .
• Your template will automatically load on your Cascade workspace and be ready to use.

💡 Want to explore other templates? Check out our Strategy Template Library with over +1,000 free, ready-to-use templates.

2. Customize your template

Your template will feature prefilled focus areas, goals, actions, and metrics. But changing them is easy to do. You can tailor your strategy’s:

• Focus Areas
• Project Titles
• Dependencies

Click on the items/title/metric or other variables you want to adjust to tweak them to fit your goals. If some variables align with your planning, keep them in, alter them, or add to them. Remember, this is your manufacturing strategy—make it your own!

3. Invite your team

Send an invite to your team members to collaborate on shared KPIs and ensure everyone is on the same page. With Cascade, you can assign roles and responsibilities, set up notifications, and communicate with your teams in one place.

4. Bring your data into one place

By connecting your existing data and inputs to your template, you can create a single source of truth for your plan and its execution. This provides unprecedented accuracy and control over the performance of your plan.

With Cascade’s +1,000 integrations , you can:

• Add collaboration tools like Teams , Slack , and Outlook .
• Integrate metrics and KPIs from Google Sheets , Excel , Jira , and Salesforce .
• Sync your plan, objectives, and their due-dates with your existing calendar in Google , Outlook , and iCalendar.

💡 Bonus Tip : If you have a custom integration requirement, contact our team, and we’ll help set it up.

5. Start executing the right way

Keep your plan from sitting idle for the rest of the year. You now have a living manufacturing strategy that can be shared and worked on in one place.

From here on out, you can add additional role players, set up teams for different projects, and track progress against projected outcomes.

If plans need to be adjusted, you can quickly make changes on the platform and update the entire team in one go.

💡 Bonus Tip : If you want to improve your manufacturing process, use Cascade’s key features to centralize your strategy execution for better and faster decision-making.

Reports : A simplified yet powerful approach to creating beautiful strategy reports on your progress. Spend less time finding data points and formatting and more time driving execution forward.

Dashboards : Set up custom dashboards to monitor execution as your teams work towards goals. Choose the metrics that matter to you and get real-time updates on how your teams move forward.

Timeline View (Roadmap) : With the Timeline View feature, you can get a visual Gantt-style chart view of the Manufacturing schedule, complete with deadlines, priorities, and timelines.

Alignment Map : Build multiple plans in Cascade and visualize how they all work together to achieve your goals. You can easily see how your manufacturing strategy connects to your overarching business strategy or even to functional plans like your finance or marketing strategy.

The Key to Manufacturing Success: An Execution-Ready Strategic Plan

In the competitive world of manufacturing, having a solid strategic plan is essential, but it's only the beginning. The key to success is executing that plan flawlessly. That's where Cascade comes in to revolutionize the traditional approach to strategic manufacturing management and planning. With Cascade, you can turn your vision into an actionable and achievable plan that's ready to be executed.

So, if you're looking to take your manufacturing business to the next level, Cascade is the solution you’re looking for. Whether it's optimizing your production processes, streamlining your supply chain, or improving your quality control, Cascade can help you achieve your goals and maximize your performance.

Don't wait any longer to unlock your manufacturing potential. Book a guided 1:1 tour with one of our Cascade in-house strategy execution experts.

Popular articles

How To Write KPIs In 4 Steps + Free KPI Template

35 Noteworthy Vision Statement Examples (+ Free Template)

How To Write A Vision Statement In 4 Steps + Tips & Examples

McKinsey GE Matrix: Importance & How To Use It (2024)

Your toolkit for strategy success.

• Send a message
• Partnering with Unleashed
• (NA) +1 888 813 6691
• (GB) +44 117 205 1394
• (AU) +61 3 7003 6819
• (NZ) +64 9 801 6337
• +64 9 801 6337
• General Enquiries
• Product Feedback
• Get Support
• Help Articles & How-tos
• Community Forum
• Company News

• Contact Sales
• Start a free trial
• Benefits of Unleashed
• The ROI of Unleashed
• Support & Onboarding
• Customer Success Stories
• Purchase Costs
• Purchase Orders
• Purchase Order Recosting
• Supplier Management
• Supplier Returns
• Receipt Purchases
• Batch Tracking
• Product Management
• Serial Number Tracking
• Barcode Scanning
• Inventory Optimization
• Demand Planning
• Disassembly
• Sales Orders
• Sales Quotes
• Freight and Charges
• Order Management
• Customer Pricing
• Quantity Discounts
• Business Intelligence
• Advanced Inventory Manager
• Integrations
• Manufacturing
• Distribution
• Food Manufacturing
• Health Supplements
• Coffee Roasters
• Solar and electronics
• Medical Devices
• The Unleashed Basics
• Advanced Unleashed Training
• Business Insights and Advice
• What's New in Unleashed
• Supply Chain Podcast
• Inventory Calculators
• The Backorder Newsletter
• Manufacturing Health Index Report
• Inventory Management Guide
• Inventory Accounting Guide
• Modern Manufacturing Guide
• Supply Chain Management Guide
• Manufacturing Productivity Guide
• Send a Message

What is Production Planning? Process & Strategies

• Oliver Munro
• 10 months ago

• October 24, 2023

Efficiency in manufacturing comes from having the right preparation and the most cost-effective processes in your arsenal. The first step in achieving these aims is called production planning.

Production planning is where you map out how your business will operate – the resources, strategies, equipment, and labour required to hit your production goals. Stay tuned as we explore this topic and uncover how you can get the most out of your production planning process.

In this production planning guide

What is production planning.

Production planning is the process of developing a strategy for the production of a company’s products and services. It describes how goods will be manufactured, the expected demand for those goods, and any production requirements such as materials or labour.

In most cases, the production planning process will outline the company’s production goals and how they’ll track success, as well as include a schedule for ensuring products are made in time to meet the forecasted demand.

A production plan should consider all aspects of operating a manufacturing business .

Common elements found in a production plan include:

• Production targets
• Manufacturing processes
• Workforce and equipment requirements
• Goals and KPIs
• Production schedules
• Market analysis
• Demand forecasting
• Quantities of materials required

Production planning allows manufacturers to optimise processes and reduce lead times before production begins, or before making any major investments. It also lowers the risks of overproduction and stockouts, greatly increasing the likelihood that production jobs will be finished on time and to the standard customers expect.

What is a production plan?

A production plan is the deliverable which comes out the other end of the production planning process. This document describes in detail every step of the production process investigated and outlined during the planning phase.

Think of your production plan as an instruction manual for manufacturing your products – it tells you what to do and what you’ll need to do it.

Production planning vs production scheduling

Production planning and production scheduling deal with different stages of the manufacturing process. Where production planning provides a top-level overview of how you intend to produce the goods and services customers need, production scheduling is where you get into the weeds of how a product will be made – for example, the exact production times and labour allocation required.

At the end of the production planning process, you will have a detailed plan for achieving your production goals. Production scheduling is the act of putting that plan into action.

The production scheduling process notes down specific times, dates, and deadlines, checks for conflicts and interdependencies, and sets production into motion. It can be a more complex process to manage, particularly when it involves multiple products.

Advantages of production planning

Effective production planning helps companies minimise the cost of manufacturing products while improving customer satisfaction and company profitability . When you have a tight production plan based on accurate forecasting and data analysis, your business will be in a better financial position.

The main benefits of production planning include:

• Business-wide visibility: A production plan lays out all the manufacturing processes and required materials, including what you need to procure and what’s already available. This bird’s eye view of your resources paints a complete picture of your company’s financial health and current production capacity.
• More efficient processes: Production planning highlights inefficiencies, bottlenecks, and causes for concern in your existing manufacturing systems – before production begins. This enables you to tighten up or rethink your approach in advance, so you don’t waste money or effort on slow processes.
• Lower production costs: When your production plan is based on accurate forecasting and careful assessment of your production needs, there will be many opportunities to reduce your expenditure through more efficient processes and smarter purchasing decisions.
• Reduced waste: Optimising processes and inventory means gaining a more accurate understanding of your requirements. When you can identify the wasteful activities and excessive resources slowing you down – and how to eliminate them – your business will operate more productively and be more cost-effective.
• Improved customer satisfaction: Proper production planning helps to reduce manufacturing lead times so customers can receive orders sooner. It also helps prevent missed sales caused by stockouts, as you’re more likely to have the resources and inventory available to meet demand.

In summary, production planning equals improved productivity and cost savings; productivity equals happier customers and faster production; and cost savings result in more revenue and higher margins.

While smaller firms with simple production requirements may be able to survive for a while without any formal production planning in place, it’s an essential process for any business producing a variety of products or dealing with complex manufacturing requirements.

Next, let’s look at the different types of production planning that exist.

5 types of production planning

There are five common types of production planning methods manufacturers may find useful. Here’s a quick recap of what they are and who they’re effective for.

1. Batch production planning

Batch production refers to the production of many similar items all at once – as opposed to producing items individually or one by one. Batch production planning is how you prepare for this method of manufacturing. It involves determining how to maximise resources without causing overproduction or excessive downtime.

In batch production, assembly is generally completed in steps. Items go through the first step of the production process and are then queued for the next stage of the process. This method is known as batch and queue. When performing batch production planning, it’s helpful to identify specific bottlenecks that occur between batches – or when items are in the queue stage.

2. Job production planning   

Job-based production planning, also known as shop or project-based production planning, refers to the production of items one item at a time, either by a single craftsperson or a team.

Often used by smaller or medium-sized manufacturers, job shop production planning is beneficial in circumstances where it’s difficult to bulk-produce a line of products, such as custom furniture.

Job production planning should focus on ensuring there is capacity for customer-requested customisations in the production plan. This may mean purchasing or preparing extra resources, which can be dangerous for more complex jobs, so accurate forecasting is especially important.

3. Flow production planning

Flow production refers to the continuous production of similar and consistently in-demand goods. Flow production planning generally focuses on the assembly line, where the standardisation of goods and equipment can allow for a highly efficient (and constant) flow of production to take place.

The flow production method aims to minimise the amount of finished goods and work-in-process inventory . Correct planning and preparation improve efficiencies and reduce costs right along the supply chain, making it a beneficial practice for you as well as your suppliers and B2B customers.

4. Mass production planning

Mass production planning is the process of prepping to manufacture a large number of identical items in a short time. Because items subject to mass production typically follow the same production process, factory automation and assembly line optimisation are key areas to focus on.

When you’re creating a plan for mass production, it’s helpful to look for ways to reduce changeover time and increase total production output. The benefits of doing so will have a compounding effect wherein a single optimisation, applied to a large quantity of items, results in a massive time or cost saving.

5. Process manufacturing planning

Process manufacturing, or process production, refers to the manufacturing of items that require predetermined formulas or recipes to produce. Unlike discrete manufacturing, process manufacturing deals with goods that are not typically measured in discrete units such as liquids or gases.

Planning for process manufacturing is crucial because of long changeover periods and a high risk of botched production due to errors. This method can also result in a lot of waste, so it’s especially important to try to minimise the number of resources consumed in production.

• Related: The Ultimate Manufacturing Guide for Production Firms

Production planning process explained

The elements of a perfect production plan are exclusive to each business. In other words, what works for another business may not work for you.

Keeping that in mind, there are some distinct steps in the production planning process that almost every manufacturer ought to follow. Here’s a breakdown of what a typical production planning process might look like.

1. Forecast demand

The first step in the production planning process is to determine your upcoming production requirements based on predicted demand for products.

Demand forecasting involves leveraging historical sales data and analytics to estimate future sales.

This information can be used to set your production goals and can be extrapolated to break inventory and labour requirements for an entire period. Additionally, market research can help you predict whether demand is going to change based on external factors such as product popularity and seasonality.

To ensure accurate demand forecasting, many firms rely on inventory optimisation software to automate the number-crunching and data collection processes.

2. Determine inventory needs and production capacity

Once you have an idea of what products you’ll need to manufacture and their quantities, the next step is to figure out how that translates into materials, resources, and labour.

First, you’ll want to determine the quantities of raw materials and components needed to match the requirements of your forecasted demand levels for each product. It’s also important to note down the machinery and staffing needed to turn those materials into finished goods.

How you manage inventory impacts the efficiency with which you can operate on any given day. Effective inventory management results in less waste and wider profit margins. It also ensures you’re making the best use of your storage facilities.

Your organisation’s current production capacity will tell you if you’re ready to tackle the upcoming period’s schedule – or let you know whether you need to consider hiring more staff, renting or buying more equipment, or outsourcing work to third parties.

3. Map out production steps

After confirming how much resources and production time will be needed, it’s time to map out the processes and steps required to produce your goods. This includes identifying any equipment, tools, and service providers you may need.

Once you’ve mapped out your production steps, you’ll be able to work out which processes can be done simultaneously, which are dependent on each other, and which ones need to be outsourced. It’s also a chance to prepare contingencies in case of equipment failure or other issues.

All this feeds into the foundation of the next step in the process: creating your production schedule .

4. Production scheduling

The production scheduling phase is where you assign tasks to your various workstations, communicate the plan to relevant stakeholders, and plot timelines for each stage of production.

This can be a complex effort, which is why accurate data is vital for the earlier planning stages.

Your production schedule should include how, when, and where items will pass through the various stages of manufacturing – and who is responsible for ensuring they do so successfully.

• Learn more about Access’ advanced production planning and scheduling software, Orchestrate

5. Production control and continuous improvement

Once production has begun, monitor your progress and look for further opportunities to improve or optimise specific processes.

Tracking your performance against your goals and deadlines offers two distinct benefits: It allows you to act quickly to resolve unforeseen challenges, and it tells you how accurate or effective your production planning method was this time around.

As you collect production data, use it to make continuous improvements to the way things are run. Rather than look at your production plan as a one-and-done project, think of it as the beginning of a cycle of constant optimisation.

How to schedule a production plan

Production scheduling is a process involving turning your production plan into an actionable timeline with all the necessary details laid out for the involved parties to access.

To schedule a production plan, you’ll need to go through these four phases:

• Routing: Figure out each step in the journey your raw materials take from the supply chain to the final product. Is it the most economical process or can it be improved?
• Scheduling & Communication: Take your plan and the steps written out in the prior phase and attach dates and timelines to them. Then communicate those expectations to key stakeholders.
• Dispatch & Execution: Dispatching is the giving of orders to personnel and assigning people to their tasks. Execution is the delivery of those actionable tasks.
• Maintenance: This refers to any on-the-fly adjustments of a production schedule necessary to eliminate bottlenecks once production has begun. It involves monitoring and optimising each aspect of your production plan.

Remember the importance of clear communication when it comes to scheduling a production plan. The more time you spend on getting everybody up to speed in the beginning, the less time you’ll have to spend repeating instructions or fixing mistakes later.

Production planning strategies

Let’s take a quick look at some of the strategies you can use to optimise your production planning process. Keep in mind your specific business needs and only use the information that’s relevant to you.

1. Make-to-stock strategy

Make-to-stock refers to producing items to stock them on your shelves until customers buy them.

It’s a particularly useful method in any industry where customers may wish to view an item before purchasing it, such as a car or a musical instrument.

This production planning strategy can increase inventory holding costs and therefore requires accurate demand forecasting. Consider using specialised software to ensure better predictions.

2. Make-to-order strategy

Make-to-order refers to the production of goods only when a customer has placed their order.

Businesses that manufacture unique items or offer a high degree of customisation can benefit from this strategy because it ensures that production always matches demand.

This method typically has slower lead times, but also lower holding costs.

3. Assemble-to-order strategy

Assemble-to-order (or make-to-assemble) is a common production planning strategy among companies which produce perishable goods, as it involves holding all the raw materials you might need but only assembling the product when a customer order comes in. Cake manufacturers, for example, would use an assemble-to-order production plan.

This method results in similar holding costs to make-to-stock strategies, but it can help reduce the chance of wastage and obsolescence; you’re not at risk of producing products customers won’t buy.

4. Chase strategy

A chase strategy refers to the idea of chasing demand with production. In this way, it is also known as a demand-driven production planning strategy.

Following the chase strategy, goods are only made when there is demand for them and production increases or diminishes as demand changes. Companies producing seasonal goods can benefit from applying a chase strategy.

Generally, production planning with this method assumes there will be no leftover stock after the demand wave has died down.

5. Level production

The opposite of a chase strategy is level production, whereby production is constant throughout the year and units are produced equally regardless of the time of year or customer demand.

This production planning strategy is common among manufacturers with cyclical product demand. Snowboard manufacturers, for example, know that demand falls in summer and picks up again before winter.

Inventory holding costs can be quite high in level production. Materials are still stocked to full capacity even when demand is low, but it levels out again during the busy season.

Production factory layout plan: Tips for optimising

Good factory layout planning is key to optimal production and is something you should be considering during the production planning process as it’s your best opportunity to make changes before production begins.

Here are some quick tips for optimising your production factory layout plan:

• Leave room for growth: It’s expensive and disruptive to redesign your factory layout while production is underway. If possible, leave room for flexibility in case of unforeseen changes in production volume or equipment.
• Keep similar manufacturing processes near each other: Keep similar or compatible workstations in close proximity to one another to allow goods to move more efficiently from one stage of production to the next. For example, if drilling follows cutting then see if your drilling machine will slot in beside your drop saw.
• Plan for waste: Where is your waste output going to go? You might require floor space for different types of waste, such as waste which must be thrown out and waste which can be recycled.
• Collaborate with staff: Factory floor planning is best achieved in collaboration with the people who walk that floor every day. Ask your staff where they think the layout could be optimised and what equipment or access might facilitate smoother production.

Finally, don’t forget to consider the cost of making changes to your factory layout.

You may need to close the entire assembly line for a day (or more) to install new equipment, install a mezzanine, or reorganise aisles. In addition to the cost of new equipment, consider how much you’ll lose if manufacturing must be paused.

Production planning KPIs and metrics

When you move from the planning phase into the execution of your manufacturing processes, you’ll need a way to objectively monitor progress.

That’s where these common production planning KPIs can help:

• Production rate: the number of units you’re producing per hour or day.
• Capacity rate: how close your equipment and workforce get to full capacity.
• Downtime: how much of your manufacturing time is unproductive.
• On-time delivery rate: the number of orders delivered on schedule, at the quality expected.
• Rejection rate: the number of products which fail quality control checks.
• Cost per unit: what it costs your business to produce one single unit.

For a longer list of production planning and management metrics, including formulas and definitions, check out our complete guide to manufacturing KPIs .

Article by Oliver Munro in collaboration with our team of specialists. Oliver's background is in inventory management and content marketing. He's visited over 50 countries, lived aboard a circus ship, and once completed a Sudoku in under 3 minutes (allegedly).

There are many types of manufacturing software available to help manufacturers streamline processes and increase workplace efficiency. While some tool...

UK electronics manufacturers have seen a sales revenue lift of 30% in 2021 vs 2020, outpacing the average performance of manufacturers of 24%, accordi...

Brew Tea Co are a beverage manufacturer on a mission - to create the perfect high-quality blend, with the help of Unleashed.

• (Global) +64 9 801 6337
• B2B eCommerce
• Unleashed Integrations
• Integrate with Us
• Health and Supplements
• Help Center
• Learning Academy

Please wait while you are redirected to the right page...

• Search Search Please fill out this field.

What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

• How to Start a Business: A Comprehensive Guide and Essential Steps
• How to Do Market Research, Types, and Example
• Marketing Strategy: What It Is, How It Works, How To Create One
• Marketing in Business: Strategies and Types Explained
• What Is a Marketing Plan? Types and How to Write One
• Business Development: Definition, Strategies, Steps & Skills
• Business Plan: What It Is, What's Included, and How to Write One CURRENT ARTICLE
• Small Business Development Center (SBDC): Meaning, Types, Impact
• How to Write a Business Plan for a Loan
• Business Startup Costs: It’s in the Details
• Startup Capital Definition, Types, and Risks
• Bootstrapping Definition, Strategies, and Pros/Cons
• Crowdfunding: What It Is, How It Works, and Popular Websites
• Starting a Business with No Money: How to Begin
• A Comprehensive Guide to Establishing Business Credit
• Equity Financing: What It Is, How It Works, Pros and Cons
• Best Startup Business Loans
• Sole Proprietorship: What It Is, Pros & Cons, and Differences From an LLC
• Partnership: Definition, How It Works, Taxation, and Types
• What is an LLC? Limited Liability Company Structure and Benefits Defined
• Corporation: What It Is and How to Form One
• Starting a Small Business: Your Complete How-to Guide
• Starting an Online Business: A Step-by-Step Guide
• How to Start Your Own Bookkeeping Business: Essential Tips
• How to Start a Successful Dropshipping Business: A Comprehensive Guide

A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

Harvard Business Review. " How to Write a Winning Business Plan ."

U.S. Small Business Administration. " Write Your Business Plan ."

SCORE. " When and Why Should You Review Your Business Plan? "

• Terms of Service
• Editorial Policy
• Privacy Policy

Stellar Food for Thought

[Infographic] 4 Steps in Developing a Manufacturing Plan

• Food process & packaging engineering
• Strategic planning

A manufacturing plan is a key piece of your food business’ overall strategic plan. Your manufacturing plan is a clear set of actions driven by gaps and discoveries from your manufacturing analysis, or the analysis of your business’ manufacturing processes.

It defines what your manufacturing strategy will look like in the future, whether it’s multiple facilities, renovations or even consolidating operations or products.

The goal is to ensure the appropriate technology is in place and to optimize current production practices to meet your sales goals. Developing the manufacturing plan helps identify where constraints exist and highlights areas to improve production efficiency.

To learn more about strategic planning, download our e-book The Strategic Planning Guide for Food Processors.   

Conversation Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Post Comment

Strategies for manufacturing: How to plan for the future

Strategies for manufacturing ensure a business stays on track with production and keeps a competitive advantage. Read all about it here.

James Humphreys

The reality is that very few manufacturing businesses will be successful without a solid strategy in place. But why are strategies for manufacturing important? How have they evolved, and what manufacturing strategies are easy for companies to implement?

In this article, we’ll answer all these questions and more.

What is a manufacturing strategy? 

A manufacturing strategy has been previously defined as “a long-range plan to use the resources of the manufacturing system to support the business strategy and, in turn, meet the business objectives. (Cimorelli and Chandler, 1996).  

The connection that binds all the eras together is manufacturing strategy. Whether it’s a humble artisan in a side-street pottery shop or a technological wiz-kid wanting to build a smart factory, they both need a manufacturing strategy.   

As already identified, strategies for manufacturing have been around for many years.   

The definition of a what is a manufacturing strategy has also been around for a long time. According to  Hayes and Wheelwright, 1984 , it is “a sequence of decisions that, over time, enables a business unit to achieve the desired manufacturing structure, infrastructure, and set of specific capabilities.”   

Nowadays, manufacturing strategy is often intertwined with a company’s digital strategy, with the tactical management of production and technology at the heart of everything a company achieves.  

As was noted by Gündüz Ulusoy back in 2003, formulating a  marketing strategy requires making three strategic choices  in three key areas: Competitive priorities, manufacturing objectives, and action plans.   

Competitive priorities include choices on:  

• Quality levels  
• Reliability  
• Design change  
• Deliveries   
• New products  

Manufacturing objectives involve decision-making on:  

• Unit costs  
• Market share  
• Profitability  
• Product development time  

And action plans include making decisions about:   

• Production  
• Energy saving  
• Employee empowerment  
• Staff training  

Once these decisions have been made and a company’s priorities have been identified, an overarching marketing strategy can be formulated.   

The history of manufacturing strategy   

Whether you are a B2B (business-to-business) or a  D2C (direct-to-consumer) manufacturing company , the chances are high that you have a structured manufacturing process in place. Hopefully, this relates back to your manufacturing strategy. This relationship between process and strategy has existed for hundreds of years.  

The art of manufacturing has humble beginnings. Way before industrialization was conceptualized, skilled artisans worked to produce commodities. They relied on their craftmanship and secrecy to ensure that their products were in demand and couldn’t be copied.   

The first example of a manufacturing strategy was probably when forward-thinking artisans realized they could  sub-contract  their work to others, thus producing more products and increasing their profits.   

Manufacturing was transformed dramatically and definitively in the 18th century during the Industrial Revolution. The invention of machines that could do the work on a mass scale meant that industries such as glassmaking, mining, textiles , and agriculture could produce much more on a much cheaper scale. The mass production concept followed, bringing us to where we are today.   

Interestingly, we are on the brink of another transformation in the industrial sector, with the birth of the Fourth Industrial Revolution, 4IR, or Industry 4.0. This is the notion that interconnectivity, smart automation, and digital process management will considerably strengthen production flow, improve quality, and reduce costs. In short, the various parts of a supply chain will interact without human interference.  

This may seem almost like a sci-fi fantasy to some, but we are speeding quickly toward this new norm. Who knows what the future of manufacturing looks like? But, the reality is that strategies for manufacturing will always be a priority in the transformation of this fast-paced industry.   

Why is a manufacturing strategy important?   

A manufacturing strategy is the backbone of how a business operates when you break it down. To ensure your manufacturing strategy is aligned with the overall business strategy, it must be focused on:   

• maximizing quality   
• minimizing costs   
• avoiding wastage  
• improving flexibility   

All the while being motivated by more lofty goals such as increasing market share and profitability.   

Strategies for marketing  ensure that a company avoids inefficiencies, optimizes production, and ultimately reaches the goals it is aiming for.   

As Steve Lam, Senior Vice President of Patheon’s Biologics Business, states, whether you are processing  medicines ,  clothing ,  beauty products , or the latest  tech-gadgets , “considering your manufacturing strategy early on in development pays dividends down the line.”   

So why is a manufacturing strategy important? The answer to this is another question:   

Would your business survive without it? 

Easy strategies for manufacturing that companies can implement

When choosing a new manufacturing strategy, it’s important to remember it’s not a case of a one-size-fits-all approach but rather finding one that is relevant for your business.   

Just because a manufacturing strategy is world-class for some doesn’t mean it will be for others. Be sure to strategize with intent and ensure that your manufacturing strategy gives your company the competitive edge it needs in an increasingly competitive environment. Start by articulating your competitive advantage and then build your strategy around it.   

Every decision, from the machinery you use to the  automation system  you choose, needs to take you one step closer to maximizing that competitive advantage.  

So, what are some manufacturing strategy examples that you could implement? 

1. Adopt technology

It is crucial to have an agile IT function that can respond flexibly to your business’s demands. Identifying which technologies are applicable and useful to your manufacturing processes is often the first building block in a sturdy manufacturing strategy. Is there a service or app out there that you have not yet considered?  

2. Shrink your costs and production waste

This is a no-brainer. If your business has holes in its  manufacturing processes  that let money flow out of them, then this part of your manufacturing strategy must be robust. Production times, processes, and product quality are things that cannot be compromised on. 

3. Stock inventory

Adopting the  principles of lean inventory  saves you a fortune and gives you a serious competitive edge. Having a better understanding of your stock levels and responding to your customer’s needs more intuitively could result in huge improvements for your business. 

4. Automate your processes

The automation of day-to-day tasks can make your business leaner and more efficient. Services like  Katana cloud inventory platform  can be the bridge that finally connects your procurement, order processing, supply chain, customer service, production, and operations together. Automatically monitoring the movement of your inventory will minimize waste like never before. Furthermore, Katana’s software easily integrates with e-commerce platforms like  Shopify  and  WooCommerce  to reduce the risk of stock-outs and to keep your products moving to the customers who want them. 

5. Look to the future

Industry 4.0 is just the latest in many changes in the industrial and manufacturing world. Do your research and ensure your manufacturing strategies are robust yet flexible enough so you can pivot if you need to.  

Designing manufacturing strategies for success

Strategies for manufacturing are essential to keep a business moving. The most successful businesses over time have been the ones that have chosen strategies that support their long-term ambitions.  

Innovative software, visibility, and control are often the backbones of any successful manufacturing strategy, but how you implement these must be unique to your business.  

For example, adopting a  manufacturing ERP software  would be the perfect manufacturing strategy for businesses struggling to keep track of the movement of their inventory.  

The key is to be smart about it — Be sure to identify the manufacturing strategies that fit your business model right now and will help you to stay ahead of the competition in the future. Evaluating and measuring your success every step of the way will ensure that you can provide your customers with the products they need before they even know they need them! 

Table of contents

Get inventory trends, news, and tips every month, explore all categories, get visibility over your sales and stock.

Wave goodbye to uncertainty by using Katana Cloud Inventory for total inventory control

Recommended

City council defuses ‘nuclear bomb’ plan to regulate luxury restaurants at nyc hotels amid backlash.

It won’t be last call for many of the city’s most popular restaurants and bars after all.

The City Council axed a portion of a bill to regulate hotels that would have doomed scores of top-rated eateries and rooftop bars  — heeding outcry from chefs and restaurant owners, as well as a harsh rebuke by The Post.

The flashpoint bill sponsored by Council member Julie Menin requires hotels to renew licenses every year and to implement hiring and safety measures long sought by the Hotel & Gaming Trades Council union.

A section of the proposed law — which hotel-industry advocates denounced as a “nuclear bomb” — would have spelled the end of restaurants that are inside hotels but leased to, or managed by, outside companies.

Such so-called “third-party” operations would come under control of the hotels, and their employees would become hotel union members if the dining rooms included “public access” to the rest of the hotel.

Nearly all do — such as Jean-Georges at the Trump International, Daniel Boulud’s Le Gratin at the Beekman and Cafe Carmellini at the Fifth Avenue Hotel.

Several, such as Wolfgang Puck’s CUT at the Four Seasons and new Bourbon Steak at the Essex House, even sit in the hotels’ lobbies.

Tom Colicchio, who runs Temple Court at the Beekman, had blasted the bill on X  as “a disaster.”

New York City Hospitality Alliance executive director Andrew Rigie warned it would “essentially terminate countless leases and management agreements between third-party food and beverage companies and the hotels in which they operate.”

But after the backlash by the Hospitality Alliance and a New York Post column , the Council decided to spare on-site restaurants from the other provisions.

Now, hotel workers covered under the bill “shall not include cooks, stewards, bartenders, servers” and others who “primarily work in food service” — regardless of whether they’re “directly employed by the hotel or by another person.”

Rigie said, “After we explained the threat to independently owned restaurants and bars in hotels, and their workers, [Menin]  amended it so they will remain open with absolutely no change to the way they have successfully operated for many years.”

Menin told The Post on Monday the threat to restaurants was “an unintended consequence” of the original bill.

She said once it was called to her attention, “We met [the objection] quickly.”

Menin rescheduled until an unspecified date in the fall a public hearing on the entire bill that was originally set for last week — which could have paved the way to a vote this month in the Council, where enough members were in support to make it law.

Advertisement

Press Releases

Intel reports second-quarter 2024 financial results; announces $10 billion cost reduction plan to increase efficiency and market competitiveness, related documents.

NEWS SUMMARY

• Second-quarter revenue of $12.8 billion, down 1% year over year (YoY).
• Second-quarter GAAP earnings (loss) per share (EPS) attributable to Intel was $(0.38); non-GAAP EPS attributable to Intel was $0.02.
• Forecasting third-quarter 2024 revenue of $12.5 billion to $13.5 billion; expecting third-quarter GAAP EPS attributable to Intel of $(0.24); non-GAAP EPS attributable to Intel of $(0.03).
• Implementing comprehensive reduction in spending, including a more than 15% headcount reduction, to resize and refocus.
• Suspending dividend starting in the fourth quarter of 2024. The company reiterates its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.
• Achieved key milestones on Intel 18A with the 1.0 Process Design Kit (PDK) released and key power-on of first client and server products on Intel 18A, Panther Lake and Clearwater Forest.

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Intel Corporation today reported second-quarter 2024 financial results.

“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones. Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation,” said Pat Gelsinger, Intel CEO. “These actions, combined with the launch of Intel 18A next year to regain process technology leadership, will strengthen our position in the market, improve our profitability and create shareholder value.”

“Second-quarter results were impacted by gross margin headwinds from the accelerated ramp of our AI PC product, higher than typical charges related to non-core businesses and the impact from unused capacity,” said David Zinsner, Intel CFO. “By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet. We expect these actions to meaningfully improve liquidity and reduce our debt balance while enabling us to make the right investments to drive long-term value for shareholders.”

Cost-Reduction Plan

As Intel nears the completion of rebuilding a sustainable engine of process technology leadership, it announced a series of initiatives to create a sustainable financial engine that accelerates profitable growth, enables further operational efficiency and agility, and creates capacity for ongoing strategic investment in technology and manufacturing leadership. These initiatives follow the establishment of separate financial reporting for Intel Products and Intel Foundry, which provides a "clean sheet" view of the business and has uncovered significant opportunities to drive meaningful operational and cost efficiencies. The actions include structural and operating realignment across the company, headcount reductions, and operating expense and capital expenditure reductions of more than $10 billion in 2025 compared to previous estimates. As a result of these actions, Intel aims to achieve clear line of sight toward a sustainable business model with the ongoing financial resources and liquidity needed to support the company’s long-term strategy.

The plan will enable the next phase of the company’s multiyear transformation strategy, and is focused on four key priorities:

• Reducing Operating Expenses: The company will streamline its operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026. Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024.
• Reducing Capital Expenditures: With the end of its historic five-nodes-in-four-years journey firmly in sight, Intel is now shifting its focus toward capital efficiency and investment levels aligned to market requirements. This will reduce gross capital expenditures* in 2024 by more than 20% from prior projections, bringing gross capital expenditures in 2024 to between $25 billion and $27 billion. Intel expects net capital spending* in 2024 of between $11 billion and $13 billion. In 2025, the company is targeting gross capital expenditures between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion.
• Reducing Cost of Sales: The company expects to generate $1 billion in savings in non-variable cost of sales in 2025. Product mix will continue to be a headwind next year, contributing to modest YoY improvements to 2025's gross margin.
• Maintaining Core Investments to Execute Strategy: The company continues to advance its long-term innovation and path to leadership across process technology and products, and the increased efficiency from its actions is expected to further support its execution. In addition, Intel continues to sustain investments to build a resilient and sustainable semiconductor supply chain in the United States and around the world.

Intel is taking the added step of suspending the dividend starting in the fourth quarter, recognizing the importance of prioritizing liquidity to support the investments needed to execute its strategy. The company reiterates its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.

Q2 2024 Financial Highlights

In the second quarter, the company generated $2.3 billion in cash from operations and paid dividends of $0.5 billion.

Business Unit Summary

Intel previously announced the implementation of an internal foundry operating model, which took effect in the first quarter of 2024 and created a foundry relationship between its Intel Products business (collectively CCG, DCAI and NEX) and its Intel Foundry business (including Foundry Technology Development, Foundry Manufacturing and Supply Chain, and Foundry Services (formerly IFS)). The foundry operating model is a key component of the company's strategy and is designed to reshape operational dynamics and drive greater transparency, accountability, and focus on costs and efficiency. The company also previously announced its intent to operate Altera ® as a standalone business beginning in the first quarter of 2024. Altera was previously included in DCAI's segment results. As a result of these changes, the company modified its segment reporting in the first quarter of 2024 to align to this new operating model. All prior-period segment data has been retrospectively adjusted to reflect the way the company internally receives information and manages and monitors its operating segment performance starting in fiscal year 2024. There are no changes to Intel’s consolidated financial statements for any prior periods.

Intel Products Highlights

• CCG: Intel continues to define and drive the AI PC category, shipping more than 15 million AI PCs since December 2023, far more than all of Intel's competitors combined, and on track to ship more than 40 million AI PCs by year-end. Lunar Lake, the company’s next-generation AI CPU, achieved production release in July 2024, ahead of schedule, with shipments starting in the third quarter. Lunar Lake will power over 80 new Copilot+ PCs across more than 20 OEMs.
• DCAI: More than 130 million Intel ® Xeon ® processors power data centers around the world today, and at Computex Intel introduced its next-generation Intel ® Xeon ® 6 processor with Efficient-cores (E-cores), code-named Sierra Forest, marking the company’s first Intel 3 server product architected for high-density, scale-out workloads. Intel expects Intel ® Xeon ® 6 processors with Performance-cores (P-cores), code-named Granite Rapids, to begin shipping in the third quarter of 2024. The Intel ® Gaudi ® 3 AI accelerator is also on track to launch in the third quarter and is expected to deliver roughly two-times the performance per dollar on both inference and training versus the leading competitor.
• NEX: Intel announced an array of AI-optimized scale-out Ethernet solutions, including the Intel AI network interface card and foundry chiplets that will launch next year. New infrastructure processing unit (IPU) adaptors for the enterprise are now broadly available and supported by Dell Technologies, Red Hat and others. IPUs will play an increasingly important role in Intel’s accelerator portfolio, which the company expects will help drive AI data center growth and profitability in 2025 and beyond. Additionally, Intel and others announced the creation of the Ultra Accelerator Link, a new industry standard dedicated to advancing high-speed, low-latency communication for scale-up AI systems communication in data centers.

Intel Foundry Highlights

• Intel is nearing the completion of its promised five-nodes-in-four-years strategy, with Intel 18A on track to be manufacturing-ready by the end of this year and production wafer start volumes in the first half of 2025. In July 2024, Intel released to foundry customers the 1.0 PDK for Intel 18A. The company’s first two Intel 18A products, Panther Lake for client — the first microprocessor to use RibbonFet, PowerVia and advanced packaging — and Clearwater Forest for servers, are on track to launch in 2025.
• Ansys, Cadence, Siemens, and Synopsys announced the availability of reference flows for Intel’s embedded multi-die interconnect bridge (EMIB) advanced packaging technology, which simplifies the design process and offers design flexibility. The companies also declared readiness for Intel 18A designs.
• During the quarter, Intel named industry veteran Kevin O'Buckley to lead Foundry Services. The company also recently appointed Dr. Naga Chandrasekaran to lead Intel Foundry Manufacturing and Supply Chain. Their leadership will support Intel’s continued development of the first systems foundry for the AI era.

Other Highlights

Intel announced its second Semiconductor Co-Investment Program (SCIP) agreement, the formation of a joint venture with Apollo related to Intel’s Fab 34 in Ireland. SCIP is an element of Intel’s Smart Capital strategy, a funding approach designed to create financial flexibility to accelerate the company’s strategy, including investing in its global manufacturing operations, while maintaining a strong balance sheet.

Q3 2024 Dividend

The company announced that its board of directors has declared a quarterly dividend of $0.125 per share on the company’s common stock, which will be payable Sept. 1, 2024, to shareholders of record as of Aug. 7, 2024.

As noted earlier, Intel is suspending the dividend starting in the fourth quarter.

Business Outlook

Intel's guidance for the third quarter of 2024 includes both GAAP and non-GAAP estimates as follows:

Reconciliations between GAAP and non-GAAP financial measures are included below. Actual results may differ materially from Intel’s business outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below. The gross margin and EPS outlook are based on the mid-point of the revenue range.

Earnings Webcast

Intel will hold a public webcast at 2 p.m. PDT today to discuss the results for its second quarter of 2024. The live public webcast can be accessed on Intel's Investor Relations website at www.intc.com . The corresponding earnings presentation and webcast replay will also be available on the site.

Forward-Looking Statements

This release contains forward-looking statements that involve a number of risks and uncertainties. Words such as "accelerate", "achieve", "aim", "ambitions", "anticipate", "believe", "committed", "continue", "could", "designed", "estimate", "expect", "forecast", "future", "goals", "grow", "guidance", "intend", "likely", "may", "might", "milestones", "next generation", "objective", "on track", "opportunity", "outlook", "pending", "plan", "position", "possible", "potential", "predict", "progress", "ramp", "roadmap", "seek", "should", "strive", "targets", "to be", "upcoming", "will", "would", and variations of such words and similar expressions are intended to identify such forward-looking statements, which may include statements regarding:

• our business plans and strategy and anticipated benefits therefrom, including with respect to our IDM 2.0 strategy, Smart Capital strategy, partnerships with Apollo and Brookfield, internal foundry model, updated reporting structure, and AI strategy;
• projections of our future financial performance, including future revenue, gross margins, capital expenditures, and cash flows;
• projected costs and yield trends;
• future cash requirements, the availability, uses, sufficiency, and cost of capital resources, and sources of funding, including for future capital and R&D investments and for returns to stockholders, such as stock repurchases and dividends, and credit ratings expectations;
• future products, services, and technologies, and the expected goals, timeline, ramps, progress, availability, production, regulation, and benefits of such products, services, and technologies, including future process nodes and packaging technology, product roadmaps, schedules, future product architectures, expectations regarding process performance, per-watt parity, and metrics, and expectations regarding product and process leadership;
• investment plans and impacts of investment plans, including in the US and abroad;
• internal and external manufacturing plans, including future internal manufacturing volumes, manufacturing expansion plans and the financing therefor, and external foundry usage;
• future production capacity and product supply;
• supply expectations, including regarding constraints, limitations, pricing, and industry shortages;
• plans and goals related to Intel's foundry business, including with respect to anticipated customers, future manufacturing capacity and service, technology, and IP offerings;
• expected timing and impact of acquisitions, divestitures, and other significant transactions, including the sale of our NAND memory business;
• expected completion and impacts of restructuring activities and cost-saving or efficiency initiatives;
• future social and environmental performance goals, measures, strategies, and results;
• our anticipated growth, future market share, and trends in our businesses and operations;
• projected growth and trends in markets relevant to our businesses;
• anticipated trends and impacts related to industry component, substrate, and foundry capacity utilization, shortages, and constraints;
• expectations regarding government incentives;
• future technology trends and developments, such as AI;
• future macro environmental and economic conditions;
• geopolitical tensions and conflicts and their potential impact on our business;
• tax- and accounting-related expectations;
• expectations regarding our relationships with certain sanctioned parties; and
• other characterizations of future events or circumstances.

Such statements involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied, including those associated with:

• the high level of competition and rapid technological change in our industry;
• the significant long-term and inherently risky investments we are making in R&D and manufacturing facilities that may not realize a favorable return;
• the complexities and uncertainties in developing and implementing new semiconductor products and manufacturing process technologies;
• our ability to time and scale our capital investments appropriately and successfully secure favorable alternative financing arrangements and government grants;
• implementing new business strategies and investing in new businesses and technologies;
• changes in demand for our products;
• macroeconomic conditions and geopolitical tensions and conflicts, including geopolitical and trade tensions between the US and China, the impacts of Russia's war on Ukraine, tensions and conflict affecting Israel and the Middle East, and rising tensions between mainland China and Taiwan;
• the evolving market for products with AI capabilities;
• our complex global supply chain, including from disruptions, delays, trade tensions and conflicts, or shortages;
• product defects, errata and other product issues, particularly as we develop next-generation products and implement next-generation manufacturing process technologies;
• potential security vulnerabilities in our products;
• increasing and evolving cybersecurity threats and privacy risks;
• IP risks including related litigation and regulatory proceedings;
• the need to attract, retain, and motivate key talent;
• strategic transactions and investments;
• sales-related risks, including customer concentration and the use of distributors and other third parties;
• our significantly reduced return of capital in recent years;
• our debt obligations and our ability to access sources of capital;
• complex and evolving laws and regulations across many jurisdictions;
• fluctuations in currency exchange rates;
• changes in our effective tax rate;
• catastrophic events;
• environmental, health, safety, and product regulations;
• our initiatives and new legal requirements with respect to corporate responsibility matters; and
• other risks and uncertainties described in this release, our 2023 Form 10-K, and our other filings with the SEC.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this release and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business.

Unless specifically indicated otherwise, the forward-looking statements in this release do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that have not been completed as of the date of this filing. In addition, the forward-looking statements in this release are based on management's expectations as of the date of this release, unless an earlier date is specified, including expectations based on third-party information and projections that management believes to be reputable. We do not undertake, and expressly disclaim any duty, to update such statements, whether as a result of new information, new developments, or otherwise, except to the extent that disclosure may be required by law.

About Intel

Intel (Nasdaq: INTC) is an industry leader, creating world-changing technology that enables global progress and enriches lives. Inspired by Moore’s Law, we continuously work to advance the design and manufacturing of semiconductors to help address our customers’ greatest challenges. By embedding intelligence in the cloud, network, edge and every kind of computing device, we unleash the potential of data to transform business and society for the better. To learn more about Intel’s innovations, go to newsroom.intel.com and intel.com.

© Intel Corporation. Intel, the Intel logo, and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.

For information about our operating segments, including the nature of segment revenues and expenses, and a reconciliation of our operating segment revenue and operating income (loss) to our consolidated results, refer to our Form 10-K filed on January 26, 2024, Form 8-K furnished on April 2, 2024 and 10-Q filed on August 1, 2024.

Intel Corporation Explanation of Non-GAAP Measures

In addition to disclosing financial results in accordance with US GAAP, this document contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Some of these non-GAAP financial measures are used in our performance-based RSUs and our cash bonus plans.

Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related income tax effects. Income tax effects are calculated using a fixed long-term projected tax rate of 13% across all adjustments. We project this long-term non-GAAP tax rate on at least an annual basis using a five-year non-GAAP financial projection that excludes the income tax effects of each adjustment. The projected non-GAAP tax rate also considers factors such as our tax structure, our tax positions in various jurisdictions, and key legislation in significant jurisdictions where we operate. This long-term non-GAAP tax rate may be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix, or changes to our strategy or business operations. Management uses this non-GAAP tax rate in managing internal short- and long-term operating plans and in evaluating our performance; we believe this approach facilitates comparison of our operating results and provides useful evaluation of our current operating performance.

Our non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the financial results calculated in accordance with US GAAP and reconciliations from these results should be carefully evaluated.

Intel Corporation Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals

Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable US GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the reconciliations from US GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustments made to the comparable US GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

Intel Corporation Supplemental Reconciliations of GAAP Outlook to Non-GAAP Outlook

Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable US GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the financial outlook prepared in accordance with US GAAP and the reconciliations from this Business Outlook should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustments made to the comparable US GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

Intel Corporation Supplemental Reconciliations of Other GAAP to Non-GAAP Forward-Looking Estimates

Set forth below are reconciliations of the non-GAAP financial measure to the most directly comparable US GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP, and the reconciliations should be carefully evaluated. Please refer to "Explanation of Non-GAAP Measures" in this document for a detailed explanation of the adjustments made to the comparable US GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801042170/en/

Kylie Altman Investor Relations 1-916-356-0320 [email protected] Penny Bruce Media Relations 1-408-893-0601 [email protected]

Source: Intel Corporation

Released Aug 1, 2024 • 4:01 PM EDT

• Email Alerts
• RSS News Feed

• Business Today
• India Today
• India Today Gaming
• Cosmopolitan
• Harper's Bazaar
• Brides Today
• Aajtak Campus

• Budget 2024
• Magazine Cover Story Editor's Note Deep Dive Interview The Buzz
• BT TV Market Today Easynomics Drive Today BT Explainer
• Market Today Trending Stocks Indices Stocks List Stocks News Share Market News IPO Corner
• Tech Today Unbox Today Authen Tech Tech Deck Tech Shorts
• Money Today Tax Investment Insurance Tools & Calculator
• Mutual Funds
• Industry Banking IT Auto Energy Commodities Pharma Real Estate Telecom
• Visual Stories

INDICES ANALYSIS

Mutual funds.

• Cover Story
• Editor's Note
• Market Today
• Drive Today
• BT Explainer
• Trending Stocks
• Stocks List
• Stocks News
• Share Market News
• Unbox Today
• Authen Tech
• Tech Shorts
• Tools & Calculator
• Commodities
• Real Estate
• Economic Indicators
• BT-TR GCC Listing

Union Budget 2024-25: A progressive, futuristic and inclusive plan

• Advertise with us
• Privacy Policy
• Terms and Conditions
• Press Releases

Copyright©2024 Living Media India Limited. For reprint rights: Syndications Today

Add Business Today to Home Screen

You're reading a free article with opinions that may differ from The Motley Fool's Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

AST SpaceMobile's Big Plan Is Paying Off

• AST SpaceMobile is attempting to build a space-based cellular broadband network.
• A key company goal is to partner with existing cellphone companies.
• AST SpaceMobile just linked up with Verizon, and it already had a deal with AT&T.
• Motley Fool Issues Rare “All In” Buy Alert

NASDAQ: ASTS

Ast spacemobile.

AST SpaceMobile just inked a big deal that suggests a core tenet of its business model has set it up for success.

AST SpaceMobile ( ASTS 0.43% ) has big plans and not a whole lot to show for them just yet. But that hasn't stopped it from executing well on one very important aspect of its business model: partnering with the cellular industry's leaders. There's a virtuous cycle here, though, because the more partners it has, the more likely it is to succeed. Which is why the company recently linking up with Verizon  was such a big deal.

Early-stage development looks promising

AST SpaceMobile is looking to build a space -based cellular broadband network that will provide reception anywhere in the world. The key attraction of the service is that it allows customers to use the devices they already use. So there's no new fancy gear to buy and set up; just pull out your handy cellphone and use it the same way you always have. Only this time, you could be on top of a mountain or in the middle of the ocean, where there aren't any nearby cell towers.

Image source: Getty Images.

That's the plan, anyway. Right now, AST SpaceMobile has one single test satellite in orbit. It won't launch additional satellites until the end of 2024 at the earliest.

Or, to put it another way, AST SpaceMobile is still in the development stage. That means the balance sheet is likely to bleed red ink for a long time into the future even as the company has to spend vast sums to create the network it needs to produce revenue. This is not a great option if you are a conservative investor.

However, the test satellite that's in orbit was enough to prove out the technology concept. Indeed, the company successfully used the satellite and existing cellular phone technology to make space-based connections. That was an important milestone, and it set the company up to achieve another important milestone.

AST SpaceMobile partners up

AST SpaceMobile is basically competing with Elon Musk's Starlink . The most notable difference is that Starlink is attempting to go it alone, with its own hardware, while AST SpaceMobile is specifically looking to partner with existing cellphone providers . There are a few reasons for this.

First off, AST SpaceMobile will be able to tap into existing customer bases and, thus, won't have to build one from scratch.

Second, it can ask its partners for funding to help it build out its system. It partnered up with AT&T  in January 2024. Not long afterward, in late May, it announced an agreement with Verizon. Both companies are lining up to be customers and are providing cash to AST SpaceMobile so it can continue to develop its network.

On that score, the company announced in late July that it had completed the first five satellites for the network it hopes to build. They will be ready to ship in early August, which was a stated management goal.

Getting the satellites to the launch facility is just step one, however. The company needs to wait until there's a launch window, which is expected to come in the latter months of 2024. But the launch depends on many factors outside of the company's control, including the weather, so there are no guarantees on a final date.

That said, the dominoes are falling into place quite well at the moment. And with the extra cash being provided by large partners like AT&T and Verizon, the future looks more certain now than it did as 2024 got underway.

AST SpaceMobile is risky but increasingly less so

While AST SpaceMobile's stock is still only appropriate for more aggressive investors, given that it remains in the development stage, it is making important progress. Notably, its operational success has allowed it to ink the partnerships it requires to succeed financially over the long term. The next big step is getting more satellites into space.

AST SpaceMobile's stock has rocketed higher this year, likely because of the partnerships noted above, but there could be more upside if the news flow continues in a positive direction.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy .

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.

To revisit this article, visit My Profile, then View saved stories .

• The Big Story
• Newsletters
• Steven Levy's Plaintext Column
• WIRED Classics from the Archive
• WIRED Insider
• WIRED Consulting

Intel Is Cutting More Than 15,000 Jobs Despite Getting Billions From the US Government

In a move likely to raise a few taxpayer eyebrows, Intel said today that it will cut 15 percent of its workforce, or more than 15,000 jobs, as it struggles to rebound from disappointing results. In March, the US government said it would give Intel no less than $8.5 billion to help it rebuild its US chipmaking operations.

Intel said that its revenues were down 1 percent year-on-year for the second quarter. “We do not take this lightly, and we have carefully considered the impact this will have on the Intel family,” CEO Pat Gelsinger said on an earnings call today. “These are hard, but necessary decisions. These reductions do not impact our ability to execute our plan."

The job cuts will affect areas including sales, marketing, and administrative roles, Intel said, and would be part of a general cost-cutting plan. The move follows a 5 percent reduction in staff announced by Intel last year. In after-hours trading, the company’s stock fell more than 17 percent.

“It is a lot of jobs,” Patrick Moorhead, chief analyst at Moor Insights & Strategy, a chip industry consultancy, tells WIRED. However, Moorhead says, it is a positive sign that the proposed layoffs appear to be targeted and not across the board. “Layoffs don’t always mean there’s something wrong with a company, but to me it’s all about the strategy,” he says.

Intel is struggling to execute a challenging turnaround plan that involves refocusing on making chips for others through its foundry business and moving more quickly to cutting-edge manufacturing methods. In February, the company said its accelerated road map for producing cutting-edge chips was on track and promised to become the world’s second-place foundry company by 2030. Intel said today that it is still on track to meet these goals.

The money Intel received in March is the biggest grant awarded by the US government so far through the CHIPS Act , 2022 legislation passed that will appropriated $52.7 billion to reshore chip manufacturing and invest in chip research and workforce training. The company will also receive tax credits of up to 25 percent on $100 billion in investments and will be eligible for federal loans of up to $11 billion.

The $8.5 billion given to Intel will go toward building plants in Arizona, New Mexico, Ohio, and Oregon. Intel said the investments it is making in these chipmaking plants will create over 10,000 company jobs, 20,000 construction jobs, and thousands more roles in supporting industries. “The money that Intel has brought in is being used to build factories,” says Moorehead of Moor Insights & Strategy. “That isn’t stopping, and it does create a lot of jobs.”

After decades of success thanks to the rise of personal computing, Intel failed to capitalize on the smartphone era, ceding market share to chips based on Arm’s designs. More recently, it has seen Nvidia, a company that started out making graphics chips for gaming, rise to prominence thanks to the importance of its hardware for training AI algorithms. Intel has also fallen behind its manufacturing competitors, TSMC in Taiwan and Samsung in South Korea.

The US government is helping fund Intel’s reboot because advanced chips are seen as crucial to economic and geopolitical competitiveness. The pandemic highlighted how vulnerable many US industries are to a fragile global supply chain. Advanced chips are also crucial for building AI , which is increasingly seen as a national imperative.

Today the US makes 12 percent of the world’s semiconductors, compared with 37 percent in the 1990s. The consulting firm McKinsey has predicted that the value of the semiconductor industry would grow impressively this decade, from $600 billion in 2021 to more than $1 trillion by 2030.

Dan Hutcheson, an analyst with Tech Insights, says Intel’s revenue shortfall reflects an ongoing shift toward AI-focused data center computing. “It used to be that [Intel] owned the data center,” Hutcheson says. “What we’ve seen in the last few years is that the big hyperscalers have focused on AI and GPUs—entire AI data centers.”

Hutcheson says Intel’s overall strategy seems to make sense, but the cuts suggest that the company is struggling to solve the dysfunction that saw it fall behind in the first place.

You Might Also Like …

In your inbox: Our biggest stories , handpicked for you each day

How one bad CrowdStrike update crashed the world’s computers

The Big Story: How soon might the Atlantic Ocean break ?

Welcome to the internet's hyper-consumption era

Olympics: Follow all our coverage from Paris this summer here

Mobile Menu Overlay

The White House 1600 Pennsylvania Ave NW Washington, DC 20500

FACT SHEET: Biden- ⁠ Harris Administration Announces New AI Actions and Receives Additional Major Voluntary Commitment on   AI

Nine months ago, President Biden issued a landmark Executive Order to ensure that America leads the way in seizing the promise and managing the risks of artificial intelligence (AI). This Executive Order built on the voluntary commitments he and Vice President Harris received from 15 leading U.S. AI companies last year. Today, the administration announced that Apple has signed onto the voluntary commitments, further cementing these commitments as cornerstones of responsible AI innovation. In addition, federal agencies reported that they completed all of the 270-day actions in the Executive Order on schedule, following their on-time completion of every other task required to date . Agencies also progressed on other work directed for longer timeframes. Following the Executive Order and a series of calls to action made by Vice President Harris as part of her major policy speech before the Global Summit on AI Safety, agencies all across government have acted boldly. They have taken steps to mitigate AI’s safety and security risks, protect Americans’ privacy, advance equity and civil rights, stand up for consumers and workers, promote innovation and competition, advance American leadership around the world, and more. Actions that agencies reported today as complete include the following: Managing Risks to Safety and Security: Over 270 days, the Executive Order directed agencies to take sweeping action to address AI’s safety and security risks, including by releasing vital safety guidance and building capacity to test and evaluate AI. To protect safety and security, agencies have:

• Released for public comment new technical guidelines from the AI Safety Institute (AISI) for leading AI developers in managing the evaluation of misuse of dual-use foundation models. AISI’s guidelines detail how leading AI developers can help prevent increasingly capable AI systems from being misused to harm individuals, public safety, and national security, as well as how developers can increase transparency about their products.
• Published final frameworks on managing generative AI risks and securely developing generative AI systems and dual-use foundation models. These documents by the National Institute of Standards and Technology (NIST) will provide additional guidance that builds on NIST’s AI Risk Management Framework, which offered individuals, organizations, and society a framework to manage AI risks and has been widely adopted both in the U.S. and globally. NIST also submitted a report to the White House outlining tools and techniques to reduce the risks from synthetic content.
• Developed and expanded AI testbeds and model evaluation tools at the Department of Energy (DOE). DOE, in coordination with interagency partners, is using its testbeds to evaluate AI model safety and security, especially for risks that AI models might pose to critical infrastructure, energy security, and national security. DOE’s testbeds are also being used to explore novel AI hardware and software systems, including privacy-enhancing technologies that improve AI trustworthiness. The National Science Foundation (NSF) also launched an initiative to help fund researchers outside the federal government design and plan AI-ready testbeds.
• Reported results of piloting AI to protect vital government software.  The Department of Defense (DoD) and Department of Homeland Security (DHS) reported findings from their AI pilots to address vulnerabilities in government networks used, respectively, for national security purposes and for civilian government. These steps build on previous work to advance such pilots within 180 days of the Executive Order.
• Issued a call to action from the Gender Policy Council and Office of Science and Technology Policy to combat image-based sexual abuse, including synthetic content generated by AI. Image-based sexual abuse has emerged as one of the fastest growing harmful uses of AI to-date, and the call to action invites technology companies and other industry stakeholders to curb it. This call flowed from Vice President Harris’s remarks in London before the AI Safety Summit, which underscored that deepfake image-based sexual abuse is an urgent threat that demands global action.

Bringing AI Talent into Government Last year, the Executive Order launched a government-wide AI Talent Surge that is bringing hundreds of AI and AI-enabling professionals into government. Hired individuals are working on critical AI missions, such as informing efforts to use AI for permitting, advising on AI investments across the federal government, and writing policy for the use of AI in government.

• To increase AI capacity across the federal government for both national security and non-national security missions, the AI Talent Surge has made over 200 hires to-date, including through the Presidential Innovation Fellows AI cohort and the DHS AI Corps .
• Building on the AI Talent Surge 6-month report , the White House Office of Science and Technology Policy announced new commitments from across the technology ecosystem, including nearly $100 million in funding, to bolster the broader public interest technology ecosystem and build infrastructure for bringing technologists into government service.

Advancing Responsible AI Innovation President Biden’s Executive Order directed further actions to seize AI’s promise and deepen the U.S. lead in AI innovation while ensuring AI’s responsible development and use across our economy and society. Within 270 days, agencies have:

• Prepared and will soon release a report on the potential benefits, risks, and implications of dual-use foundation models for which the model weights are widely available, including related policy recommendations. The Department of Commerce’s report draws on extensive outreach to experts and stakeholders, including hundreds of public comments submitted on this topic.
• Awarded over 80 research teams’ access to computational and other AI resources through the National AI Research Resource (NAIRR) pilot —a national infrastructure led by NSF, in partnership with DOE, NIH, and other governmental and nongovernmental partners, that makes available resources to support the nation’s AI research and education community. Supported projects will tackle deepfake detection, advance AI safety, enable next-generation medical diagnoses and further other critical AI priorities.
• Released a guide for designing safe, secure, and trustworthy AI tools for use in education. The Department of Education’s guide discusses how developers of educational technologies can design AI that benefits students and teachers while advancing equity, civil rights, trust, and transparency. This work builds on the Department’s 2023 report outlining recommendations for the use of AI in teaching and learning.
• Published guidance on evaluating the eligibility of patent claims involving inventions related to AI technology,  as well as other emerging technologies. The guidance by the U.S. Patent and Trademark Office will guide those inventing in the AI space to protect their AI inventions and assist patent examiners reviewing applications for patents on AI inventions.
• Issued a report on federal research and development (R&D) to advance trustworthy AI over the past four years. The report by the National Science and Technology Council examines an annual federal AI R&D budget of nearly $3 billion.
• Launched a $23 million initiative to promote the use of privacy-enhancing technologies to solve real-world problems, including related to AI.  Working with industry and agency partners, NSF will invest through its new Privacy-preserving Data Sharing in Practice program in efforts to apply, mature, and scale privacy-enhancing technologies for specific use cases and establish testbeds to accelerate their adoption.
• Announced millions of dollars in further investments to advance responsible AI development and use throughout our society. These include $30 million invested through NSF’s Experiential Learning in Emerging and Novel Technologies program—which supports inclusive experiential learning in fields like AI—and $10 million through NSF’s ExpandAI program, which helps build capacity in AI research at minority-serving institutions while fostering the development of a diverse, AI-ready workforce.

Advancing U.S. Leadership Abroad President Biden’s Executive Order emphasized that the United States lead global efforts to unlock AI’s potential and meet its challenges. To advance U.S. leadership on AI, agencies have:

• Issued a comprehensive plan for U.S. engagement on global AI standards.  The plan, developed by the NIST, incorporates broad public and private-sector input, identifies objectives and priority areas for AI standards work, and lays out actions for U.S. stakeholders including U.S. agencies. NIST and others agencies will report on priority actions in 180 days. 
• Developed guidance for managing risks to human rights posed by AI. The Department of State’s “Risk Management Profile for AI and Human Rights”—developed in close coordination with NIST and the U.S. Agency for International Development—recommends actions based on the NIST AI Risk Management Framework to governments, the private sector, and civil society worldwide, to identify and manage risks to human rights arising from the design, development, deployment, and use of AI. 
• Launched a global network of AI Safety Institutes and other government-backed scientific offices to advance AI safety at a technical level. This network will accelerate critical information exchange and drive toward common or compatible safety evaluations and policies.
• Launched a landmark United Nations General Assembly resolution . The unanimously adopted resolution, with more than 100 co-sponsors, lays out a common vision for countries around the world to promote the safe and secure use of AI to address global challenges.
• Expanded global support for the U.S.-led Political Declaration on the Responsible Military Use of Artificial Intelligence and Autonomy.   Fifty-five nations now endorse the political declaration, which outlines a set of norms for the responsible development, deployment, and use of military AI capabilities.

The Table below summarizes many of the activities that federal agencies have completed in response to the Executive Order:

Stay Connected

We'll be in touch with the latest information on how President Biden and his administration are working for the American people, as well as ways you can get involved and help our country build back better.

Opt in to send and receive text messages from President Biden.