The Economic Realms: Manufacturing

Friday 20 December 2013

Manufacturing

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Manufacturing is the production of goods for use or sale using labor and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be used for manufacturing other, more complex products, such as aircraft, household appliances or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users – the "consumers".
Manufacturing takes turns under all types of economic systems. In a free market economy, manufacturing is usually directed toward the mass production of products for sale to consumers at a profit. In a collectivist economy, manufacturing is more frequently directed by the state to supply a centrally planned economy. In mixed market economies, manufacturing occurs under some degree of government regulation.
Modern manufacturing includes all intermediate processes required for the production and integration of a product's components. Some industries, such as semiconductor and steel manufacturers use the term fabrication instead.
The manufacturing sector is closely connected with engineering and industrial design. Examples of major manufacturers in North America include General Motors Corporation, General Electric, Procter & Gamble, and Pfizer. Examples in Europe include Volkswagen Group, Siemens, and Michelin. Examples in Asia include Toyota, Samsung, and Bridgestone.

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History and development[edit]

In its earliest form, manufacturing was usually carried out by a single skilled artisan with assistants. Training was by apprenticeship. In much of the pre-industrial world, the guild system protected the privileges and trade secrets of urban artisans.
Before the Industrial Revolution, most manufacturing occurred in rural areas, where household-based manufacturing served as a supplemental subsistence strategy to agriculture (and continues to do so in places). Entrepreneurs organized a number of manufacturing households into a single enterprise through the putting-out system.
Toll manufacturing is an arrangement whereby a first firm with specialized equipment processes raw materials or semi-finished goods for a second firm.

Assembly of Section 41 of a Boeing 787 Dreamliner

Manufacturing systems: changes in methods of manufacturing[edit]

Industrial policy[edit]

Main article: Industrial policy

Economics of manufacturing[edit]

According to some economists, manufacturing is a wealth-producing sector of an economy, whereas a service sector tends to be wealth-consuming.^[1]^[2] Emerging technologies have provided some new growth in advanced manufacturing employment opportunities in the Manufacturing Belt in the United States. Manufacturing provides important material support for national infrastructure and for national defense.
On the other hand, most manufacturing may involve significant social and environmental costs. The clean-up costs of hazardous waste, for example, may outweigh the benefits of a product that creates it. Hazardous materials may expose workers to health risks. These costs are now well known and there is effort to address them by improving efficiency, reducing waste, using industrial symbiosis, and eliminating harmful chemicals.^[3] The increased use of technologies such as 3D printing also offer the potential to reduce the environmental impact of producing finished goods through distributed manufacturing.^[4]
The negative costs of manufacturing can also be addressed legally. Developed countries regulate manufacturing activity with labor laws and environmental laws. Across the globe, manufacturers can be subject to regulations and pollution taxes to offset the environmental costs of manufacturing activities. Labor unions and craft guilds have played a historic role in the negotiation of worker rights and wages. Environment laws and labor protections that are available in developed nations may not be available in the third world. Tort law and product liability impose additional costs on manufacturing. These are significant dynamics in the on-going process, occurring over the last few decades, of manufacture-based industries relocating operations to "developing-world" economies where the costs of production are significantly lower than in "developed-world" economies.
Manufacturing may require huge amounts of fossil fuels. Automobile construction requires, on average, 20 barrels of oil.^[5]

Manufacturing and investment[edit]

Surveys and analyses of trends and issues in manufacturing and investment around the world focus on such things as:

the nature and sources of the considerable variations that occur cross-nationally in levels of manufacturing and wider industrial-economic growth;

competitiveness; and

attractiveness to foreign direct.

In addition to general overviews, researchers have examined the features and factors affecting particular key aspects of manufacturing development. They have compared production and investment in a range of Western and non-Western countries and presented case studies of growth and performance in important individual industries and market-economic sectors.^[6]^[7]
On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand.^[8] Further, while U.S. manufacturing performs well compared to the rest of the U.S. economy, research shows that it performs poorly compared to manufacturing in other high-wage countries.^[9] A total of 3.2 million – one in six U.S. manufacturing jobs – have disappeared between 2000 and 2007.^[10] In the UK, EEF the manufacturers organisation has led calls for the UK economy to be rebalanced to rely less on financial services and has actively promoted the manufacturing agenda.

Countries by manufacturing output using the most recent known data[edit]

Data is provided by Worldbank.^[11]^[12] It shows the total value of manufacturing in US dollars for its noted year.

Rank	Country/Region	(Millions of $US)	Year
	World	9,963,056	2010
9999999	European Union	70062257019000000002,257,019	2010
1	United States	70061771400000000001,771,400	2010
2	China	70061756621000000001,756,621	2010
9999999	Eurozone	70061744073000000001,744,073	2010
3	Japan	70061063593000000001,063,593	2010
4	Germany	7005610184000000000610,184	2010
5	South Korea	7005313429000000000313,429	2011
6	Brazil	7005308125000000000308,125	2011
7	Italy	7005306196000000000306,196	2010
8	France	7005253608000000000253,608	2009
9	Russia	7005252125000000000252,125	2011
10	India	7005238621000000000238,621	2011
11	United Kingdom	7005229615000000000229,615	2010
12	Indonesia	7005205632000000000205,632	2011
13	Mexico	7005202974000000000202,974	2011
14	Spain	7005172433000000000172,433	2009
15	Canada	7005169120000000000169,120	2008
16	Turkey	7005125825000000000125,825	2011
17	Thailand	7005113606000000000113,606	2010
18	Australia	700498344000000000098,344	2010
19	Argentina	700484100000000000084,100	2011
20	Poland	700476438000000000076,438	2010

Manufacturing processes[edit]

Theories[edit]

Control[edit]

References[edit]

Jump up ^ Friedman, David (2006). "No Light at the End of the Tunnel". Los Angeles Times. New America Foundation. Retrieved 2007-05-12.
Jump up ^ Joseph, Keith (1976). "Monetarism Is Not Enough". Center for Policy Studies. Margaret Thatcher Foundation. Retrieved 2007-05-12.
Jump up ^ For example, entire academic journals such as The Journal of Cleaner Production and The Journal of Industrial Ecology dedicated to reducing environmental impact of manufacturing.
Jump up ^ Megan Kreiger and Joshua M. Pearce (2013). Environmental Life Cycle Analysis of Distributed 3-D Printing and Conventional Manufacturing of Polymer Products, ACS Sustainable Chemistry & Engineering, DOI: 10.1021/sc400093k Open access.
Jump up ^ "World oil supplies are set to run out faster than expected, warn scientists". The Independent. June 14, 2007.
Jump up ^ Manufacturing & Investment Around The World: An International Survey Of Factors Affecting Growth & Performance, ISR Publications/Google Books, revised second edition, 2002. ISBN 978-0-906321-25-6.
Jump up ^ Research, Industrial Systems (2002-05-20). Manufacturing and Investment Around the World: An International Survey of Factors Affecting Growth and Performance. ISBN 978-0-906321-25-6.
Jump up ^ Bailey, David and Soyoung Kim (June 26, 2009).GE's Immelt says U.S. economy needs industrial renewal. UK Guardian. Retrieved on June 28, 2009.
Jump up ^ Brookings Institution, Why Does Manufacturing Matter? Which Manufacturing Matters?, February 2012
Jump up ^ "Factory jobs: 3 million lost since 2000". USATODAY.com. April 20, 2007.
Jump up ^ "Manufacturing, value added (current US$)". access in February 20, 2013.
Jump up ^ "Manufacturing, value added (current US$) for EU and Eurozone". access in February 20, 2013.

Sources[edit]

Kalpakjian, Serope; Steven Schmid (August 2005). Manufacturing, Engineering & Technology. Prentice Hall. pp. 22–36, 951–988. ISBN 0-13-148965-8. Cite uses deprecated parameters (help)