The Industry & Manufacturing IndustriesManufacturing encompasses a wide range of industrial market sectors that produce tangible goods for sale or application in a production process. There is are a vast range of high-tech machinery and human expertise, and engineering skills required to manufacture components or raw materials into a finished good. Many machines are used to manufacture other machines or tools, (which are in turn may be used in a separate production process).
The basis of an industrial manufacturing has always been to produce high volumes of a finished good at the lowest possible cost, in time for the good to be consumed. Car manufacturing is a perfect example of this principle. Demand for products that are mass produced varies tremendously by sector and geography. China and the USA leading the way in industrial output. The emerging market countries are also becoming dominant forces in world output. This demand is placing huge pressure on Global energy demand and supplies of scare environmental resources.
Many manufacturing companies and suppliers and customers have to collaborate and work closely together in a production process and supporting industrial services sectors. Many will share information, ideas and responsibilities. For example, cake making. The food manufacturer uses base materials (eggs, flour, sugar, water, etc) to make the end products. The manufacturer may also require raw material ingredients from other food suppliers, as well as a packaging company to box-up the cakes and a logistics company to transport them to wholesalers or retailers.
Legislation covering the manufacturing industry is vast, and much of it will involve laws concerning health and safety for employees, and protection for consumers or businesses in their end use of goods manufactured. There are also many trade agreements that include standards of conduct and environmental regulations impacting industrial output. For example, the way chemicals are used or disposed of, and how land is utilised in developing countries.
Farming is another industrial production process where regulation impacts working practices. For example, legislation covers quota production limits, land use, pesticides allowable, how animals can be kept and how foodstuffs are stored and transported. With a growing world population, latest developments in agricultural production have seen greater research into the use of genetically modified crops. Disease resistant strains of crops are being cultivated to allow fewer pesticides to be used. As a result of these changes in production, opinion is divided over which farming process is most ethical.
The use of computer technology is rapidly changing how manufacturers design and mass produce goods. Engineering and design process can be streamlined and adapted to changing demand from end users. Computers have facilitated just-in-time business models that enable exporters to meet demand from large retailers so stocks do not deplete. To this end, manufacturing organisations tend to invest heavily in research and development to enable them to innovate and streamline all aspects of production. There is also a strong emphasis on flexibility of the design process in order to adapt and diversify into changing end user demands.
Volatility in the price of raw materials creates budgeting problems for manufacturers. For example, the continuous fluctuations in oil, coal, gas, chemicals and commodities prices can squeeze manufacturers margins. Higher overheads or direct costs make long term investment in expensive capital plant and machinery more difficult to calculate and finance.
Economists constantly monitor factory production figures and industrial employment rates. This data reflects the future health and economic well being of the wider economy. If order books fall, manufactures may have to lay off workers and reduce other costs. This in turn, impacts companies in their supply chain downstream. Labour costs are also a key management issue. Long-term industrial decline in Western countries has largely been attributed to developing countries producing equivalent products using cheap labour. The economic health of the economy affects manufacturers ability to raise substantial capital sums for investment. The credit crunch, euro zone debt crisis and inflation problems in China have made investors nervous in seeking longer term risks by investing in manufacturing shares.