Manufacturing in the United States

American manufacturing in pre-1840 was home and guild based, relying on labor-intensive manual operations using primitive technology. Manufacturing took place in small factories powered by unreliable water supplies and seasonally recruited workers from local farms. Production was broken down in distinctive stages, each being performed by craftsmen in specialized trades with no interest in centralizing or simplifying production. Adam Smith’s concept of division of labor and the invisible hands of capitalism kept production processes small and fragmented with an emphasis on specialization.

It was not until the first phase of the industrial revolution, characterized by technological innovation and alternative energy source discovery, which brought about the concept of mass production through vertical integration and interchangeable parts. Human labor was substituted by capital innovations that mechanized manual operations to achieve economies of scale. Many previously distinctive operations were centralized. The availability of steam and coal as power supplies freed manufactures from depending on water sources and brought freedom of industrial location. The concept of interchangeable parts further reduced the need for specialized skills. The result was an emphasis on machine instead of people specialization.

Large-scale production facilities for mass production required a mass distribution system of raw materials and finished goods. This was critical for initiating the second phase of the industrial revolution, occurring between 1850 and 1880. The resulting innovation in transportation and communication had made possible high-volume production in modern integrated facilities supported by mass distribution systems of retailers. Big businesses including railroads, steel, oils, etc., with an emphasis on efficiency, high throughput, and low unit cost became commonplace. Further speeding up production, in 1913 Henry Ford sought a nonstop continuous workflow under the concept of a moving assembly line. The potential of economies of scale for producing a single product was fully exploited by the 1920s. However, hindered by the depression of the 1930s and the war of the 1940s, American manufacturing did not reach its global dominance until the 1950s. By this time, though, a lack of competition during this golden era had caused a lax attitude in American manufacturing in regard to production details, product quality, continual improvement, and customer service. In addition, the narrow focus on efficiency turned out to be an obstacle to United States manufacturers’ ability to adapt. As a result, from 1960 to 1980 United States companies’ manufacturing market share dropped from 99 to 92% domestically and from 25 to 15% globally. During this period, the United States compared unfavorably with many other industrialized countries in various economic indicators such as national income statistics, unemployment rate, and productivity improvements, respectively. Increased imports during these last decades cost millions of manufacturing jobs and billions of dollars of trade deficit. Numerous attempts were made to address the concern of the United States’ decline in manufacturing dominance. Harvard’s R. B. Riech described this issue aptly:
The central problem of America’s economic future is that the nation is not moving quickly enough out of high-volume standardization production. The extraordinary success of the half-century of the management era has left the United States a legacy of economic inflexibility. Thus, our institutional heritage now imperils our future.

Doll and Vonderembse in their 1991 article attributed the decline to the difficulty of United States firms to adapt to the changing manufacturing environment. They used a model to characterize the evolution of manufacturing systems as three stages: (1) Craft shops, (2) Industrial systems, and (3) Post-industrial enterprises. The craft shops stage demanded skilled artisans, the shortage of which drove the emphasis of automation in the industrial stage. The view of manufacturing as a functional area focusing on efficiency worked well in the industrial stage but proved to be too narrowly defined for the post-industrial stage. Post-industrial manufacturing, they posited, should be viewed as an enterprise that involved a complex network of interdependent value-added activities from raw material preparation, through fabrication, to assembly, to distribution, and after sale service. A lack of understanding of how best to manage the postindustrial manufacturing enterprise hindered United States firms from adapting adequately to the changing manufacturing environment.

What was the result of United States manufacturers’ response to the decline? The third annual Industry Week census of manufacturers in December 1999 provided the most up-to-date assessment of the effort taken by United States manufacturers in regard to the situation: Manufacturers in the U.S. are struggling in their efforts to improve. Gains are measured in small steps rather than swaggering strides. Corporate executives and plant-level managers do not seem to share the same vision for their companies’ futures. New technologies are being thrust in front of organizations faster than many can grasp how best to use them. The quest for excellence in manufacturing is far from over.

Source : http://www.englisharticles.info/2012/01/02/manufacturing-in-the-united-states/