OK, this seems so simple to implement and makes complete sense to me. Let us build workshops or mills where we can bring raw materials to them and produce desired items!
For example, bring scrap metal, place it in the bin at the Nail Workshop and it will produce X number of nails per scrap metal. Bring scrap metal to the rivet workshop, and do the same thing. Have a mill that will accept raw cloth scraps and it will mix them together and produce a single type of cloth fabric (this will eliminate having 20 stacks of different cloth). Etc. etc. etc.