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Business Solutions To Manufacturing Issues

Manufacturing is often narrowly focused on the actual physical fabrication of goods. However, it also means the business services that surround the physical plant. When considering solutions to manufacturing issues, we must ensure that all activities are included, and metrics in the appropriate context are applied.

To overcome major challenges in manufacturing capacity, jobs, and innovation and maintain a competitive edge in the global manufacturing industry, manufacturers must:

  1. Employ suitable operating models
  2. Measure and manage manufacturing performance using accurate and useful metrics, in the correct context
  3. Effectively exploit manufacturing globalization
  4. Effectively exploit opportunities presented by new technologies, especially information technology
  5. Maintain the pace of innovation
  6. Ensure that small and medium-sized manufacturers remain strong and competitive
  7. Maintain a sufficient talent pool and adequately skilled manufacturing workers
  8. Tackle the rising costs of health care, regulation, and litigation


Operating Models

Operating models in the manufacturing sector are changing as goods are being produced and applied in different ways, such as:

  • Used as raw materials
  • Added value from processing techniques
  • Finished products sold to an end user

A single product may be procured from many different sources and may be processed several times. Each processing step may occur at a different company and/or location, either locally or abroad. This is driving a growing interdependence between manufacturing and service jobs, demanding tight process integration and performance management.


Manufacturing Metrics

Manufacturing is measured in a number of ways - at macro level and at a micro level.

Macro Measures

Data on macro industrial sectors uses such indicators as:

  • Manufacturing’s percentage of the gross domestic product [GDP]
  • Level of manufacturing orders
  • Industrial production and capacity utilization
  • Labor productivity
  • Income and compensation
  • Energy production and prices

Manufacturing measures have changed over time, making it difficult to use current data to use accurately reflect the state of the manufacturing sector and any developing trends.

Micro Measures

Micro measures relate to individual activities identified in the work breakdown structure [WBS].

Global Collaboration

Globalization refers to both the physical separation of people by distance and time zones, and the virtual separation of people due to culture, values, and languages.

Globalization is an trend affecting almost every facet of manufacturing; manufacturers must find ways to exploit the advantages of globalization of production and expansion of world markets and at the same time protect their IP from contract partners. For collaboration partners to interact effectively, it is important to establish responsibilities for the intellectual property and standards for research, product development, and product realization.

Globalized production can enable the efficient distribution of engineering and manufacturing responsibilities, resulting in decreased overall costs and the creation of better jobs in local markets, despite concerns that offshore contract manufacturing will negatively impact local labor forces.

Collaboration technology can be applied to issues arising from globalization, but as the collaborative culture evolves, new norms of business communication and operation are being driven. This evolution must be identified and supported by new business models, that include linking the business to:

  • Specialist consultants
  • Suppliers
  • Internal expertise
  • Professional societies
  • Academia - universities, community colleges
  • National labs
  • Consortia - partnerships between industry, national labs, academia

The key is in collectively linking these diverse sources of expertise in a way that builds upon the input of each contributor, rather than just summing up each individual’s knowledge. Only by doing so, will projects become more efficient and productive.

Next: Technology in Manufacturing

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