Vertical manufacturing is an economic and business concept that should be understood by ambitious entrepreneurs.
In simple terms, it means when a manufacturer directly gets involved with some of the processes of a value chain. A value chain is the process a good goes through till it reaches the final consumer. Let's take a suga company as an example. A sugar company sources its raw materials from farmer and uses the raw material- mainly sugarcane to produce the sugar. The company also sells the sugar to major distributor who sells them to wholesalers, and then retailers, and then to final consumer.
We ccan draw a simple value chain for sugarcane as thus:
Manufacturer bys sugarcane, manufacturer produces sugarcane from sugar, manufacturer sells sugar to major distributor, distributor sells to wholesale, wholesale sells to retail, retail sells to final consumer. However, a manufacturer can decide that instead of buying sugarcane, it can start its own sugarcane plantation.
Are you a food vendor, are you buying foodstuffs from suppliers when you can be making yours?
To know more about this helpful economic idea called Vertical manufacturing, check out the link below.
http://businessnaija.com.ng/vertical-manufacturing/