Overview of the Manufacturing Sector
Manufacturing production is one of the key measures of the economic growth of Nations. In principle, manufacturing is a labour-intensive process that involves the transformation of raw materials into a finished good, using machines and tools. These finished goods may be other tools or machines (such as construction machinery) to be used in a different manufacturing process, or goods may be the finished products themselves. Heavy manufacturers (such as steel manufacturing, building construction or car assembly) generally run from large buildings or factories and use huge amounts of energy in the production process. Most manufacturers that operate in the heavy industries are subject to strict environmental and employment laws because waste is sometimes created during the production process.
Ever since the Industrial Revolution, large-scale and high-volume, mass production assembly methods have help to increase output while reducing the cost of production. As manufacturing is about 'making something', manufacturing output and manufacturing job levels are some of the key economic indicators economists like to use to compare the wealth and prosperity of nations.
Post-war manufacturing in the West saw an initial boom in output, followed by decades of manufacturing decline. This has been due to shift in industrial output from West to East turning trade surplus's into trade deficits. Asian manufacturers of high technology products (such as computing, electronics, automobiles and household appliances) have dominated, by using cheap domestic labour and modern automated factories.
The so-called 'information age' has also created a huge shift away from manufacturing-led economies to services-led economies. As robotic automation as taken over from the old mass production lines, manufacturing jobs have declined. Consumers have also opted to purchase cheaper imported products from overseas manufacturers.
The manufacture of standardised units of any product is easy to quantify, whereas the services output of an economy can be complex and intangible in nature. The move to services has helped to polarise economic debate regarding Government business policy and strategy for economic growth and regeneration. Many Governments have attempted to 're-balance their economy' by investing in improving the technical and engineering skills of its population. Similarly, Governments have offered business grants and subsidies to companies in key export sectors, or those based in areas of high unemployment.
Many small so-called 'light manufacturers' are benefiting from a demand for high-quality engineering and industrial design skills. Light manufacturers (such as machine tooling, custom clothing, beauty salon supplies or furniture making), tend to operate from smaller urban industrial units. They focus on both exporting and serving local business-to-business markets and domestic consumer markets. Most light manufacturing organisations rely on skilled engineers, technicians or craftsmen. In addition, many sectors now utilise computers in the overall product design process. Computer-based manufacturing software can help oversee the supply chain, (such as calculating unit cost and raw material requirements, forecasting operational output, predicting inventory levels and helping at all stages throughout the product life-cycle).