Manufacturing

a.

1. Employed, or chiefly employed, in manufacture; as, a manufacturing community; a manufacturing town.

2. Pertaining to manufacture; as, manufacturing projects.

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One can trace the origins of modern manufacturing management to the advent of agricultural production, which meant that humans didn't constantly have to wander to find new sources of food. Since that time, people have been developing better techniques for producing goods to meet human needs and wants. Since they had additional time available because of more efficient food sources, people began to develop techniques to produce items for use and trade. They also began to specialize based on their skills and resources. With the first era of water-based exploration, trade, and conflict, new ideas regarding product development eventually emerged, over the course of the centuries, leading to the beginning of the Industrial Revolution in the mid-eighteenth century. The early twentieth century, however, is generally considered to mark the true beginning of a disciplined effort to study and improve manufacturing and operations management practices. Thus, what we know as modern manufacturing began in the final decades of the twentieth century.

The late 1970s and early 1980s saw the development of the manufacturing strategy paradigm by researchers at the Harvard Business School. This work focused on how manufacturing executives could use their factories' capabilities as strategic competitive weapons, specifically identifying how what we call the five P's of manufacturing management (people, plants, parts, processes, and planning) can be analyzed as strategic and tactical decision variables. Central to this notion is the focus on factory and manufacturing trade-offs. Because a factory cannot excel on all performance measures, its management must devise a focused strategy, creating a focused factory that does a limited set of tasks extremely well. Thus the need arose for making trade-offs among such performance measures as low cost, high quality, and high flexibility in designing and managing factories.

The 1980s saw a revolution in management philosophy and the technologies used in manufacturing. Just-in-time (JIT) production was the primary break through in manufacturing philosophy. Pioneered by the Japanese, JIT is an integrated set of activities designed to achieve high-volume production using minimal inventories of parts that arrive at the workstation "just in time." This philosophy—coupled with total quality control (TQC), which aggressively seeks to eliminate causes of production defects—is now a cornerstone in many manufacturers' practices.

As profound as JIT's impact has been, factory automation in its various forms promises to have an even greater impact on operations management in coming decades. Such terms as "computer-integrated manufacturing" (CIM), "flexible manufacturing systems" (FMS), and "factory of the future" (FOF) are part of the vocabulary of manufacturing leaders.

Another major development of the 1970s and 1980s was the broad application of computers to operations problems. For manufacturers, the big breakthrough was the application of materials requirements planning(MRP) to production control. This approach brings together, in a computer program, all the parts that go into complicated products. This computer program then enables production planners to quickly adjust production schedules and inventory purchases to meet changing demands during the manufacturing process. Clearly, the massive data manipulation required for changing the schedules of products with thousands of parts would be impossible without such programs and the computer capacity to run them. The promotion of this approach by the American Production and Inventory Control Society (APICS) has been termed the MRP Crusade.

The hallmark development in the field of manufacturing management, as well as in management practice in general, is total quality management (TQM). Although practiced by many companies in the 1980s, TQM became truly pervasive in the 1990s. All manufacturing executives are aware of the quality message put forth by the so-called quality gurus—W. Edwards Deming, Joseph M. Juran, and Philip Crosby. Helping the quality movement along was the creation of the Baldrige National Quality Award in 1986 under the direction of the American Society of Quality Control and the National Institute of Standards and Technology. The Baldrige Award recognizes up to five companies a year for outstanding quality management systems.

The ISO 9000 certification standards, issued by the International Organization for Standardization, now play a major role in setting quality standards, particularly for global manufacturers. Many European companies require that their vendors meet these standards as a condition for obtaining contracts.

The need to become or remain competitive in the global economic recession of the early 1990s pushed companies to seek major innovations in the processes used to run their operations. One major type of business process reengineering (BPR) is conveyed in the title of Michael Hammer's influential article "Reengineering Work: Don't Automate, Obliterate." The approach seeks to make revolutionary, as opposed to evolutionary, changes. It does this by taking a fresh look at what the organization is trying to do, and then eliminating non-value-added steps and computerizing the remaining ones to achieve the desired outcome.

The idea is to apply a total system approach to managing the flow of information, materials, and services from raw material suppliers through factories and warehouses to the end customer. Recent trends, such as outsourcing and mass customization, are forcing companies to find flexible ways to meet customer demand. The focus is on optimizing those core activities in order to maximize the speed of response to changes in customer expectations.

Based on the work of several researchers, a few basic operations priorities have been identified. These priorities include cost, product quality and reliability, delivery speed, delivery reliability, ability to cope with changes in demand, flexibility, and speed of new product introduction. In every industry, there is usually a segment of the market that buys products— typically products that are commodity-like in nature like sugar, iron ore, or coal—strictly on the basis of low cost. Because this segment of the market is frequently very large, many companies are lured by the potential for significant profits, which they associate with the large unit volumes of the product. As a consequence, competition in this segment is fierce—and so is the failure rate.

Quality can be divided into two categories: product quality and process quality. The level of a product's quality will vary with the market segment to which it is aimed because the goal in establishing the proper level of product quality is to meet the requirements of the customer. Over-designed products with too high a level of quality will be viewed as prohibitively expensive. Under designed products, on the other hand, will result in losing customers to products that cost a little more but are perceived as offering greater benefits.

Process quality is critical since it relates directly to the reliability of the product. Regardless of the product, customers want products without defects. Thus, the goal of process quality is to produce error-free products. Adherence to product specifications is essential to ensure the reliability of the product as defined by its intended use.

A company's ability to deliver more quickly than its competitors may be critical. Take, for example, a company that offers a repair service for computer-networking equipment. A company that can offer on-site repair within one or two hours has a significant advantage over a competing firm that only guarantees service only within twenty-four hours.

Delivery reliability relates to a firm's ability to supply the product or service on or before a promised delivery due date. The focus during the 1980s and 1990s on reducing inventory stocks in order to reduce cost has made delivery reliability an increasingly important criterion in evaluating alternative vendors.

A company's ability to respond to increases and decreases in demand is another important factor in its ability to compete. It is well known that a company with increasing demand can do little wrong. When demand is strong and increasing, costs are continuously reduced because of economies of scale, and investments in new technologies can be easily justified. Scaling back when demand decreases may require many difficult decisions regarding laying off employees and related reductions in assets. The ability to deal effectively with dynamic market demand over the long-term is an essential element of manufacturing strategy.

Flexibility, from a strategic perspective, refers to a company's ability to offer a wide variety of products to its customers. In the 1990s companies began to adjust their processes and outputs to dynamic and sometimes volatile customer needs. An important component of flexibility is the ability to develop different products and deliver them to market. As new technologies and processes become widespread, a company must be able to respond to market demands more and more quickly if it is to continue to be successful.

Manufacturing strategy must be linked vertically to the customer and horizontally to other parts of the enterprise. Underlying this framework is senior management's strategic vision of the firm. This vision identifies, in general terms, the target market, the firm's product line, and its core enterprise and operations capabilities. The choice of a target market can be difficult, but it must be made. Indeed, it may lead to turning away business—ruling out a customer segment that would simply be unprofitable or too hard to serve given the firm's capabilities. Core capabilities are those skills that differentiate the manufacturing from its competitors.

In general, customers' new-product or current-product requirements set the performance priorities that then become the required priorities for operations. Manufacturing organizations have a linkage of priorities because they cannot satisfy customer needs without the involvement of R&D and distribution and without the direct or indirect support of financial management, human resource management, and information management. Given its performance requirements, a manufacturing division uses its capabilities to achieve these priority goals in order to complete sales. These capabilities include technology, systems, and people. CIM, JIT, and TQM represent fundamental concepts and tools used in each of the three areas.

Suppliers do not become suppliers unless their capabilities in the management of technology, systems, and people reach acceptable levels. In addition, most manufacturing capabilities are now subjected to the "make-or-buy" decision. It is current practice among world-class manufacturers to subject each part of a manufacturing operation to the question: If we are not among the best in the world at, say, metal forming, should we be doing this at all, or should we subcontract to someone who is the best?

The main objectives of manufacturing strategy development are (1) to translate required priorities into specific performance requirements for operations and (2) to make the necessary plans to assure that manufacturing capabilities are sufficient to accomplish them. Developing priorities involves the following steps:

1. Segment the market according to the product group.
2. Identify the product requirements, demand patterns, and profit margins of each group.
3. Determine the order winners and order qualifiers for each group.
4. Convert order winners into specific performance requirements.

It has been said that America's resurgence in manufacturing is not the result of U.S. firms being better innovators than most foreign competitors. This has been true for a longtime. Rather, it is because U.S. firms are proving to be very effective copiers, having spent a decade examining the advantages of foreign rivals in product development, production operations, supply chain management, and corporate governance then putting in place "functional equivalents" that "incrementally improve" on their best techniques. Four main adaptations on the part of U.S. firms underscore this success:

1. New approaches to product-development team structure and management have resulted in getting products to market faster, with better designs and manufacturability.
2. Companies have improved their manufacturing facilities through dramatic reductions of work-in-process, space, tool costs, and human effort, while simultaneously improving quality and flexibility.
3. New methods of customer-supplier cooperation, which borrow from the Japanese keiretsu (large holding companies) practices of close linkages but maintain the independence of the organizations desired by U.S. companies, have been put in place.
4. Better leadership—through strong, independent boards of directors that will dismiss managers who are not doing their jobs effectively—now exists.

In sum, the last few decades of the twentieth century witnessed tremendous change and advancement in the means of producing goods and the manner of managing these operations that have led to higher levels of quality and quantity as well as greater efficiency in the use of resources. In the new millennium, because of global competition and the expansive use of new technologies, including the Internet, a successful firm will be one that is competitive with new products and services that are creatively marketed and effectively financed. Yet what is becoming increasingly critical is the ability to develop manufacturing practices that provide unique benefits to the products. The organization that can develop superior products, sell them at lower prices, and deliver them to their customers in a timely manner stands to become a formidable presence in the marketplace.

[Article by: THOMAS HAYNES]

For more information on manufacturing, visit Britannica.com.

Rather than undergoing a single, rapid "industrial revolution," manufacturing in America has evolved over four centuries of European settlement. While the first colonists introduced some manufacturing processes to their "new world," manufacturing did not become a vital part of the economy until the achievement of national independence. Over the first half of the nineteenth century, all forms of manufacturing—household, artisanal, and factory based—grew and expanded, and textile manufacturing in particular spawned important new technologies. From the Civil War through the early twentieth century heavy industry grew rapidly, transforming the national economy and the very nature of society. After a period of manufacturing prosperity due, in part, to World War II, heavy industry began to decline and Americans suffered from deindustrialization and recession. The growth of high technology and the service sector in the final decades of the century offered both challenges and opportunities for American manufacturing.

The Colonial Era to 1808

Both of the major early English settlements hoped to establish manufacturing in America. The Virginia Company attempted to set up iron foundries and glass manufactories on the James River while the Puritans built several iron foundries in Massachusetts. As colonization proceeded, however, manufacturing became increasingly peripheral to the economy. With quicker and easier profits to be made from cash crops and trans-Atlantic trade, colonists exerted little effort toward manufacturing. Beginning in the late-seventeenth century, colonial manufacturing was further hindered by mercantilistic restrictions imposed by the English, most notably the Woolen Act (1699), Hat Act (1732), and Iron Act (1750). All three of these acts were designed to limit nascent colonial competition with English manufacturers in keeping with the developing mercantilistic perception that colonies should serve the empire as producers of raw materials and consumers of finished products from the mother country. While large-scale iron and steel manufacturing continued to have a presence in the colonies, most colonial manufacturing would still be performed in the farm household and, to a lesser extent, within craft shops.

It was only after the French and Indian War (1689– 1763) that Americans, propelled by their new quest for independence from England, began to turn toward manufacturing in a systematic way. Colonial resistance to the Sugar Act (1764), Stamp Act (1765), Townshend Duties (1767), and Coercive Acts (1774/1775) all involved economic boycotts of British goods, creating a patriotic imperative to produce clothing, glass, paint, paper, and other substitutes for British imports. Empowered by this movement and increasingly politicized by the resistance, urban artisans began to push for a permanently enlarged domestic manufacturing sector as a sign of economic independence from Britain.

The Revolution itself offered some encouragement to domestic manufacturing, particularly war materiel such as salt petre, armaments, ships, and iron and steel. But it also inhibited manufacturing for a number of reasons. Skilled laborers, already scarce before the war, were now extremely difficult to find. Wartime disruptions, including the British blockade and evacuation of manufacturing centers such as Boston, New York City, and Philadelphia further hindered manufacturing.

In the years immediately following the war, manufacturing began to expand on a wider scale. Lobbying efforts by urban mechanics as well as some merchants swayed state governments and later the new federal government to establish mildly protective tariffs and to encourage factory projects, the most famous of which was Alexander Hamilton's Society for Establishing Useful Manufactures in Patterson, New Jersey. New immigrants brought European industrial technologies. The best known case was that of Samuel Slater, who established some of the new nation's first mechanized textile mills in Rhode Island in the 1790s. But the great majority of manufacturing establishments still relied on traditional technologies to perform tasks such as brewing beer, refining sugar, building ships, and making rope. Moreover, craft production and farm-based domestic manufacturing, both of which grew rapidly during this period, continued to be the most characteristic forms of American manufacturing.

From 1808 to the Civil War

Factory production, particularly in the textile industries, became an important part of the American economy during the Embargo of 1808 and the War of 1812. During these years imports were in short supply due to the United States' efforts to boycott European trade and disruptions caused by the British navy during the war. Economic opportunity and patriotic rhetoric pushed Americans to build their largest textile factories to date, from Baltimore's Union Manufactory to the famous establishments financed by the Boston Associates in 1814 in Waltham and in 1826 in Lowell, Massachusetts. America's first million-dollar factories, they used the latest technologies and employed thousands of workers, many of them women and children. After the war promanufacturing protectionists pushed for high tariffs to ensure that manufacturing would continue to flourish. These efforts culminated with the so-called Tariff of Abominations of 1828, which included rates of 25 percent and more on some imported textiles. Protectionism was a vital part of the Whig Party's American System, consisting of tariffs, improved transportation, and better banking. But after 1832, as Southerners successfully fought to lower tariffs, government protection of manufacturing waned.

During these years the proportion of the workforce involved in manufacturing grew more rapidly than in any other period in America's history, rising from only 3.2 percent in 1810 to 18.3 percent by 1860. Growth in textile manufacturing led the way. Cotton production capacity alone increased from 8,000 spindles in 1808 to 80,000 by 1811 and up to 5.2 million by the dawn of the Civil War. By 1860 the United States was, according to some calculations, the world's second greatest manufacturing economy, behind only England. Spectacular as this growth was, it did not come only from the revolution in textile manufacturing. In fact, American manufacturing was extremely varied. While even Europeans admired American inventors' clever use of interchangeable parts and mechanized production, traditional technologies also continued to flourish. Household production, although declining relative to newer forms, remained a significant element of American manufacturing. Many industries other than textiles, and even some branches of textiles, relied on more traditional processes. Established urban centers such as New York City experienced metropolitan industrialization that relied more on the expansion and modification of traditional craft processes than on construction of large vertically integrated factories on the Lowell model.

From the Civil War to World War II

During the latter part of the nineteenth century the United States became the world's leading industrial nation, exceeding the combined outputs of Great Britain, France, and Germany by 1900. Between 1860 and 1900 the share of manufacturing in the nation's total production rose from 32 percent to 53 percent and the number of workers employed in manufacturing tripled from 1.31 million to 4.83 million. Heavy industry, particularly steel, played the most dramatic role in this story. Between 1873 and 1892 the national output of bessemer steel rose from 157,000 to 4.66 million tons. Geographically, the trans-Appalachian midwest was responsible for a disproportionate amount of this growth. Major steel-making centers such as Pittsburgh, Cleveland, and Chicago led the way. The combined population of these industrial metropolises grew by more than 2,500 percent between 1850 and 1900. Yet, even smaller midwestern towns rapidly industrialized; by 1880 60 percent of Ohio's population was employed in manufacturing, and ten years later Peoria County, Illinois, was the most heavily industrialized in the United States. To a far lesser extent manufacturing also extended into the New South after the Civil War. Here industries based on longtime southern agricultural staples such as cotton manufacturing and cigarette making led the way, following some mining and heavy industry.

Besides the growth of heavy industry and large cities, this era marked the onset of big business. The railroad industry, which benefited from the ease of coordination offered by large units, set the pace, but it was in the steel industry that bigness really triumphed, culminating in the creation of United States Steel, America's first billion-dollar firm (it was capitalized at $1.4 billion in 1901). By 1904, 318 large firms controlled 40 percent of all American manufacturing assets. Firms grew due to vertical integration (incorporating units performing all related manufacturing functions from extraction to marketing) as well as horizontal integration (incorporating new units providing similar functions throughout the country). Such growth was hardly limited to heavy industry; among the most famous examples of vertical integration was the Swift Meat Packing Corporation, which, during the 1870s and 1880s, acquired warehouses, retail outlets, distributorships, fertilizer plants, and other units that built on its core businesses.

While consumers welcomed the increasing availability of mass-produced goods ranging from dressed meat to pianos, the growth of big industry also worried many Americans. Concerns that the new colossuses would serve as monopolies spurred government concern, beginning with state actions in the 1880s and the federal Sherman Antitrust Act of 1890 and followed by a number of largely ineffectual efforts by federal courts to bust trusts such as those alleged in the whiskey and lumber industries to keep the market competitive for smaller players. Perhaps more importantly, workers were also frightened by the increasing amount of economic power in the hands of a few industrial giants who were able to slash wages at will. Major labor actions against railroad and steel corporations helped to build new unions such as the Knights of Labor (established 1869), the United Mine Workers (1890), and the American Federation of Labor (1886). In the 1890s there were an average of 1,300 work stoppages involving 250,000 workers per year. Such actions sometimes ended in near-warfare, as in the famous case of the 1892 strike at Carnegie Steel's Homestead, Pennsylvania, plant.

The most important new manufacture of the twentieth century was the automobile. In 1900 the United States produced fewer than $5 million worth of automobiles. Only sixteen years later American factories turned out more than 1.6 million cars valued at over half a billion dollars. Henry Ford's assembly line production techniques showcased in his enormous River Rouge factory transformed industry worldwide. Automobile production also stimulated and transformed many ancillary industries such as petroleum, rubber, steel, and, with the development of the enclosed automobile, glass. Automobiles also contributed significantly to the growth of a consumer culture in the era before World War II, leading to new forms of commuting, shopping, traveling, and even new adolescent dating rituals. While the development of new forms of consumption kept the economy afloat during good times, reluctance to purchase goods such as automobiles and radios during the Great Depression would intensify the economic stagnation of the 1930s.

World War II to 2000

After the fallow years of the depression, heavy industry again thrived during and after World War II, buoyed by defense spending as well as consumer purchases. Due partly to the politics of federal defense contracts and partly to lower labor costs, the South and West experienced more rapid industrial growth than the established manufacturing centers in the Northeast and Midwest. While workers in the Pacific coast states accounted for only 5.5 percent of the nation's manufacturing workforce in 1939, by 1969 they accounted for 10.5 percent of the total. Manufacturing employment in San Jose, Phoenix, Houston, and Dallas all grew by more than 50 percent between 1960 and 1970.

Industrial employment reached its peak in 1970, when 26 percent of Americans worked in the manufacturing sector. By 1998 the percentage had plunged to 16 percent, the lowest since the Civil War. Deindustrialization struck particularly hard during the 1970s when, according to one estimate, more than 32 million jobs may have been destroyed or adversely affected, as manufacturing firms shut down, cut back, and moved their plants. Due to increasing globalization, manufacturing jobs, which previously moved from the northern rust belt to the southern and western sun belt, could now be performed for even lower wages in Asia and Latin America. These developments led some observers to label the late twentieth century a post-industrial era and suggest that service industry jobs would replace manufacturing as the backbone of the economy, just as manufacturing had superseded agriculture in the nineteenth century. They may have spoken too soon. In the boom years of the 1990s the number of manufacturing jobs continued to drop, but increased productivity led to gains in output for many industries, most notably in the high technology sector. Additionally, other economic observers have argued that manufacturing will continue to matter because the linkages that it provides are vital to the service sector. Without manufacturing, they suggest, the service sector would quickly follow our factories to foreign countries. Thus, at the dawn of the twenty-first century the future of manufacturing and the economy as a whole remained murky.

Bibliography

Bluestone, Barry, and Bennett Harrison. The Deindustrialization of America. New York: Basic Books, 1982.

Clark, Victor. History of Manufactures in the United States, 1893–1928. 3 vols. New York: McGraw Hill, 1929.

Cochran, Thomas. American Business in the Twentieth Century. Cambridge, Mass.: Harvard University Press, 1972.

Cochran, Thomas, and William Miller. The Age of Enterprise: ASocial History of Industrial America. New York: Macmillan, 1942.

Licht, Walter. Industrializing America: The Nineteenth Century. Baltimore: Johns Hopkins University Press, 1995.

Porter, Glenn. The Rise of Big Business, 1860–1910. New York: Caswell, 1973; Arlington Heights, Ill.: Harlan Davidson, 1973.

Tryon, Rolla M. Household Manufactures in the United States,1640–1860. Chicago: University of Chicago Press, 1917. Reprint, New York: Johnson Reprint Company, 1966.

IN BRIEF: Making of goods or ware by manual labor or by machinery especially on a large scale; Producing artificially or inventing.

Winners make a habit of manufacturing their own positive expectations in advance of the event. — Brian Tracy

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