Processors and manufacturers are not part of the distribution channel, but they are part of the production process. Processors and manufacturers take raw materials or unfinished products, assemble portions, and send either a finished or unfinished product to another group.

 

 

 Processors take raw materials and alter them so they can be used by manufacturers.

Manufacturers take processed materials and further alter them to fabricate consumer products.

For example:

  • Trees are processed into lumber. Lumber is used to manufacture furniture. A producer markets and distributes the furniture.
  • Carbon and iron are processed into carbon steel. Carbon steel is used to manufacture knives. A producer markets and distributes the knives.
  • Cotton is processed into thread. Thread is used to manufacture clothing. A producer markets and distributes the clothing.