We have to import Excel files from SharePoint, so we need the connector SharePoint folder which is used to get access to the files stored in the library. SharePoint list is a collection of content that has rows and columns (like a table) and is used for task lists, calendars, etc. Since we have to filter only on manufacturing reports, we have to select Transform and then filter by the corresponding folder path.
https://docs.microsoft.com/en-us/power-query/connectors/sharepointlist