Job Shop vs. Production Manufacturing: What's The Difference?

While job shops and production manufacturers both operate in the manufacturing industry, they differ significantly in their business models. Job shops are primarily make-to-order, dealing with custom parts and complex, varied workflows that require flexibility, while production manufacturers are make-to-stock, focusing on standardized, linear processes and historical demand forecasting. 

Often, we hear customers say, “I’m a job shop, not a production manufacturer.” Yet, what does that mean? For those curious about the difference between the two, read this post to find the answer and learn what features are needed in your job shop’s business management solution.

Job shops are mostly make-to-order manufacturers who have many custom, one-off parts. Much of their time is spent setting up machines since orders are customized. The workflows of job shops are complex because they are different for different jobs. Therefore, job shops are divided into work centers that can fulfill the same operation alternatively. Holding stock is not a productive approach.

On the other hand, production manufacturers are mostly made-to-stock and deal with sales orders. There is less time spent setting up machines since workflows are simpler, linear, and standardized for sales orders. Workers can be scheduled by machine/work cells within the manufacturing process. Demand is also forecasted based on historical patterns.

Here’s an example of the make-to-order workflow.

Say I’m Larry’s Large Manufacturing, and I need a custom part for one of my machine lines. I placed an RFQ with Jill’s Job Shop. Jill’s Job Shop then sends me a quote, I accept, and my order is official.

On Jill’s side, the employees check to see if they have the materials needed to build the part on hand. Since Jill’s doesn't keep a lot of inventory, the office manager places a purchase order for the job. Then, she checks the availability on the scheduler and adds in the job. Once the job is finished/ custom part is produced, the office manager ships it to Larry’s Large Manufacturing. Larry’s Large Manufacturing then pays Jill’s Job Shop.

Here’s an example of the make-to-stock workflow

Say I’m Larry’s Large Manufacturing, and I need a standard part for one of my machine lines. I purchase my part from Marty’s Mid-sized Manufacturing.

For Marty’s Mid-sized Manufacturing, the employees are doing similar tasks as over at Jill’s Job Shop. They are receiving quotes and issuing purchase orders. They are ordering and receiving stock and warehousing. They are building and scheduling. They are shipping and billing. Yet, the difference is that make-to-stock manufacturers, like Larry’s, already had the part available. They forecast the amount of stock needed based on capacity and historical demand. Therefore, the additional steps of warehousing, inventory, and reporting are more important than they are for job shops.

Make-to-order manufacturing solution necessities

What kind of business management software is needed for job shops that are primarily make-to-order? As a job shop owner or employee, you need a solution to work with your busy and irregular schedule. 

Your shop needs a solution that can:

• Allow you to enter more data across more fields for costing when you have time, but also allow less data for days when customer orders come flooding in.
• Help you shorten lead time, especially for your most important customers.
• Let you know when essential materials are running low because you don’t keep stock or like waste.
• Tell you your job profitability, even if you haven’t had the time to put in the layers of data.
• Understand that you and your employees are always on the move, visiting customers and going between the shop floor and the office.

And lastly, you need a solution that understands that less time focused on the Enterprise Resource Planner (ERP) solution means more time for your business and family. This means you need an ERP partner with easy adoption.

JobBOSS² is the most proven job shop solution.

It works for you, not you for it.

JobBOSS² allows you to enter time, materials, and routing for estimating. It then gives you the estimated vs. actuals and turns the estimate into a quote. JobBOSS² enables you to enter simple orders for days when you are swamped. You can generate new work orders or purchase orders with fewer than five clicks.

JobBOSS² ERP manufacturing solution also has MRP functionality for job shops. With a set of reports and quick view options, it’ll show you when you need to reorder. During times when too many customer orders have come in, JobBOSS² reports show you who your most profitable customers are, so you always know which orders to prioritize.

JobBOSS² also makes costing easy. As long as you have a job number, you can cost your jobs It also has out-of-the-box reports on job costing, margin, and performance summaries and a built-in executive dashboard.

Because JobBOSS² was built from the ground up for job shops, it comes with free mobile apps so you can take your ERP data with you on the go. Though data collection and inventory are optional, you can easily update your shop floor data through these apps. Also, it can quickly view customer and vendor information.

The ECI team brought JobBOSS², formerly known as E2Shop, into its ERP ecosystem because E2Shop has successfully helped over 5,000 job shops grow with its system. The JobBOSS² team understands that as a job shop, you value ease of use and flexibility above advanced features and functionality. We allow you to start with estimating or order entry. We make it easy for you to collect data but keep it optional. We give you the option to sync from QuickBooks or use our built-in accounting. We have a quick implementation and affordable job shop pricing. We understand job shops and have been doing this for almost 40 years. Your success is our success.