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U.S. Manufacturing, Research Paper Example

Pages: 6

Words: 1571

Research Paper

Abstract

Over the course of the last century the United States has traversed the evolution from an agricultural to service based economy.  Many areas of agriculture, manufacturing and service based commodities have formed their niche in the globalization of goods and services from the United States.  The manufacturing boom occurred after World War II and lead to what is considered the greatest generation of the United States.  Throughout the course of the manufacturing boom in order to drive cost out of the process different techniques were used.  Outsourcing parts of finished products occurred when low wage countries began to enter the manufacturing realm.  Outsourcing brought on the concepts of branding finished goods from overseas which pushed ownership, control and production outside the borders of the United States.  In the last ten years a push to insource products back into the United States has gained popularity but this can only be achieved through precise execution in the supply chain and controlling overhead throughout the process.

 

The United States will need to implement tools such as those based on lean manufacturing techniques, six sigma methodologies and leveling the political playing field in terms of international trade and compliance.  The methodology for this research is to view the amount of work pulled back into the United States, amount of sourced and branded goods by U.S. manufacturing companies and amount of trade exports compared to imports among industries.  The United States has endured great prosperity in its short life, comparative to other countries, and the discussion revolves around the ability of the United States to evolve, adapt and overcome the typical life cycle and mitigate the preconceived economic end of life scenario.

 

Manufacturing goods has become increasingly difficult in the United States due to increased globalization of the market place and exponential growth in competition and supplier base where the goods are made with equitable quality and at a lower cost.  Although the perception is that the United States has lost significant ground in the manufacturing arena the actual lost in global market share is approximately 1.1% from 1984 to 2007 (Vernvi 2004).  The ability for the United States to compete globally has relied heavily on America’s economic and political power which allowed the manufacturing companies to hold fast their traditional manufacturing operations and maintain the higher wages consistent with the U.S.’s standard of life.  Complacency in the strategically aligned goals and objectives will lead to further devaluation of U.S. manufacturing and substantial loss of global market share.

 

Factors affecting the manufacturing playing ground reach far beyond the cost of labor in the low wage countries producing parts and systems competing with U.S. goods.  Time to market, agility in manufacturing and optimizing the total supply chain become integral parts to reduce or eliminate non-value added processes to the final product.  In order for the United States to maintain their competitive advantage while maintaining wages for their employees other means to drive cost out of the product must be taken.  Implementing tools to better service the business such as lean manufacturing techniques, Designed for Six Sigma process lines, and 6 sigma methodologies will potentially negate the initial cost differentiation and ultimately lead to the highest quality product at the lowest cost to consumer.

 

Manufacturing is crucial to the United States economy in ways much more than just the finished good or part.  Manufacturing innovation causes a ripple effect in the microeconomic and macroeconomic environments.  Locally the innovation and process improvement leads to increased ability to produce goods at a lower cost.  This leads to more operating profit and a higher profitability to the shareholders.  When a company is doing well wages tend to increase and a pull demand for greater talent and leadership arises.  Like with any other limited resource, the talent pool for creative, intelligent and potential leaders is limited but with increased demand there would be generation of supply.  Educational opportunities would increase so that roles could be filled by the demand of manufacturing companies.

 

The impact of increased business makes sense for the local economy and the U.S. economy if the company is large enough such as Boeing or General Electric which have market shares of $56 billion and $204 billion respectively.  These companies do not compete globally in a vacuum.  Numerous suppliers both based in the United States and abroad input parts, expertise, infrastructure, processes and finished goods that result in a 747 jetliner or a hybrid water heater rolling off the assembly line.

 

In order to drive cost out and increase quality the entire manufacturing supply chain needs to be viewed as one fluid and changeable process flow.  Process engineers spend countless hours optimizing and manipulating internal processes to ensure flow rate and Takt time are in line with customer demand and sales forecasts but all of that hard work and diligence are for nothing if the supplier of the input parts cannot adjust to demand or produce the quality of product needed to compliment the finished good expected by the customer.

 

Lean manufacturing leaders and process or program engineers would need to view the entire process as one working unit and organization.  The inputs from suppliers, the logistics to get the good from one point to the next and the final assembly all live and breathe in the same environment.  U.S. innovation and implementation coupled with the mindset of a wing to wing improvement process will lead to a competitive advantage globally.

 

While the U.S. should focus on wing to wing processes it should still be understood that American manufacturing is a globalized entity in which it will never fully disengage itself.  The world is heavily connected with total disregard for distance due to increased abilities to communicate.  In order to fully compete and become successful it will take a full effort to ensure the United States is not inhibiting itself from competition.  Currently some of the largest competitors to U.S. manufacturing reside in China.  While the United States does not want to lower its standards in the workplace, it should increase the accountability to other countries to ensure a reality of fairness in competition at home and abroad.

 

The U.S. based automotive industry has recently gone through a very traumatic and enlightening time due to economic condition.  The global relationship between U.S. based automotive manufactures and is significantly skewed toward supporting non-local manufacturing.  A recent example of this is the relationship between Korea and the U.S.  In 2010, Korea exported over 500,000 vehicles to the United States but their borders were closed to import from the United States except in specific instances which allowed approximately 7,500 units (Ford 2010).  The United States government does not have to back a particular business in the United States but it does have the responsibility to adapt and provide a scenario where the manufacturing companies can compete globally.  Through trade agreements and other means the government would eliminate the stifling nature of the global conditions imposed by U.S. regulation.  The goal is not to back a company but allow the companies in the game to compete.

 

Manufacturing in the United States depends on innovation, leadership, total ownership of the supply chain process by American manufacturers.  Continual process improvement and allowing lean management techniques and 6 sigma processes to infiltrate the manufacturing process the manufacturing companies in the United States can maintain their market share and potentially garner greater share due to increased efficiency and quality.  The total big picture encompasses the government not hindering companies and opening new venues for trade, suppliers providing agile support with a focus on quality and finished goods manufacturers managing and leading the entire product life cycle through an end to end view throughout the local and global markets.

 

Competition with other global entities involves trying to hit an ever moving target.  Competing with wind energy production in Germany differs vastly than competing with an automotive manufacturer in Korea but the bottom line to success is reducing non-value add processes through the utilization of proven techniques and tools such as 6 sigma and lean management.   Innovating new ways to compete and thinking of new solutions to get product to market faster is imperative to the competitive nature of global manufacturing.  The United States has the opportunity to shape the competitive environment by forcing productive changes up and down the supply chain and pushing the governing bodies to make changes to policies that hinder growth in a rapidly changing business environment.

Ford 2010, U.S. Korea FTA fact sheet. Available from: http://corporate.ford.com/doc/fta_fact_sheet.pdf.

Vernvi, B 2007, Where are the real problems in manufacturing? Available from: http://americanmachinist.com/Classes/Article/ArticleDraw.aspx?HBC=iCopyright&NIL=False&CID=71108&OASKEY.

Gregory, T 2009, Rationales and mechanisms for revitalizing U.S. manufacturing r&d strategies, National Institute of Standards and Technology. Available from http://www.usinnovation.org/files/RevitalizingUSManufacturingR&DStrategiesbyGTassey1209.pdf.

Popkin, J & Kobe, K 2010, Manufacturing resurgence. Prepared for the National Association of Manufacturers and the NAM Council of Manufacturing Associations. Available from: http://documents.nam.org/CMA/PopkinReport.pdf.

U.S. Department of Commerce 2004, Manufacturing in America: A Comprehensive Strategy to Address the Challenges to U.S. Manufacturing. Available from: http://www.trade.gov/media/publications/pdf/manuam0104final.pdf.

Helper, S 2008, Renewing US manufacturing: promoting a highroad strategy. Economic Policy Institute. Briefing Paper #212. Available from: http://www.sharedprosperity.org/bp212/bp212.pdf.

U.S. Department of Commerce 2004,  Manufacturing in America: a comprehensive strategy to address the challenges to U.S. manufacturing. Washington, D.C. January 2004. Available from: http://www.trade.gov/media/publications/pdf/manuam0104final.pdf.

Pisano, G & Shih, W 2009, Restoring American competitiveness. Harvard Business Review.

Sager, T & Winkelman, S 2001, Six sigma: positioning for competitive advantage. Available from http://www.crowell.com/documents/DOCASSOCFKTYPE_ARTICLES_492.pdf.

Hanover, B 2006, Deliciously lean – a mouth-watering introduction to lean manufacturing for printing professionals and sandwich makers alike. SGIA Journal Fourth Quarter 2006. Available from: http://tpslean.com/pdfs/introtolean.pdf.

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