Question

Case study: Keeping Your Eye on the Ball

We sometimes read a newspaper or magazine or listen to a news report and hear about the downfall of U.S. manufacturing and how many people are losing their jobs in manufacturing plants. It sounds depressing but the question is, “Has the United States really fallen that far behind other countries in manufacturing capability?” The answer is no, and this video is meant to highlight just one example of a successful manufacturing company. There are thousands of others that could be discussed in a similar manner.

There is no doubt that U.S. manufacturers are being challenged by companies in Mexico, China, India, Brazil, Indonesia, and all over the world—but that is nothing new. The question is whether or not the United States can respond effectively to such challenges today as it has done in the past. Don’t forget that much, if not most, of the machinery and equipment being used in foreign plants, was produced in the United States. Note, too, that many companies—like Honda and Toyota—have built manufacturing plants in the United States.

This video features Ball metal beverage containers. You’ve seen them everywhere. But have you given any thought to how those cans came to be? Have you wondered why Ball has been so successful in the United States that it expanded operations by buying four U.S. manufacturing plants from brewer Anheuser-Busch InBev?

The text mentions several things that U.S. manufacturers are doing to stay competitive in today’s global markets. They include focusing on customers; maintaining close relationships with suppliers (e.g. using just-in-time inventory control); practicing continuous improvement; focusing on quality; saving on costs through site selection; utilizing the Internet, and adopting new production processes like computer-integrated manufacturing. Foreign businesses are busy copying what we do, so U.S. producers need to do things better and faster and cheaper if they can. Speaking of cans, you can see and hear what Ball is doing to stay competitive in the video. Note that Ball is using a continuous process. What other processes might the company use?

U.S. companies are using computer-aided design and computer-aided manufacturing, united in computer-integrated manufacturing. They also do flexible manufacturing, which means they can produce a variety of products using the same machinery. It should not surprise you to learn that Ball located its facilities close to its customers. That makes distribution faster, easier and cheaper.

Of course, quality is a key consideration in any manufacturing plant. Can you imagine trying to open a can and having the opener break off in your fingers or having a can that leaks all over your car? Manufacturers try for zero defects but often settle for some slightly lower standard such as Six Sigma (only 3.4 defects per million).

Next time you take a cold drink from a can, think about Ball and the other companies that make the United States a major producer of consumer goods. Think, too, of the opportunities that will present themselves to tomorrow’s college graduates. Students seem less attracted to manufacturing today, but that means more opportunities tomorrow for those students who see growth in some areas of manufacturing. That includes, of course, companies that produce solar panels, power plants, and more. You only have to look around your home or office to see the many products being made and the many products that will be made using biotechnology, nanotechnology, and so on.

1. What is the situation of manufacturers in your area/state? Are they hiring or firing more?

2. What factors affect corporation's decisions to offshore manufacturing to other countries? Do you think this is good for an economy? Why or Why Not?

3. Do you think an economic system can exist without manufacturing of goods? Explain.

Answer 1

1.While some manufacturers may see firing as the preferred solution to cut the cost, majority is focussed on increasing the productivity and efficiency at workplace to overcome the challenges of staying cost efficient and competitive. The hiring, though seems lukewarm, the need for highly skilled manpower, particularly those with new age technology enabled skills is high, and will remain to be the same.

2. The decisions to outsource the manufacturing operations depend on the cost effectiveness. The businesses that involve huge manpower to produce the goods, like clothing and shoes are outsourced by the companies to save cost on the manpower, which forms significant part of operating cost in these industries. The operations to be outsourced are the ones that need little high skilled work. The outsourcing claims jobs from the local population and transfers them overseas, however these jobs are low skill ones. Outsourcing helps to achieve cost effectiveness through low cost of manufacturing overseas, the lack of which may also lead to downsizing back home. Besides shifting the labour intesive work overseas where both raw material and labor are abundant and cheap, the companies can also reduce the carbon footprints of the host country. In this way, it can be justified.

3. It is very difficult imaging an economic system without manufacturing of goods. Traditionally, rise of manufacturing industry is seen as the symbol of progress, but in places where resources don't permit such industry to exist, there must be strong alternatives for the economic growth like tourism or agriculture. There are nations where tourism is the only industry, and they fulfill their need for the manufactured goods by importing the commodities from other countries while earning sufficiently from their sole source of livelihood.