Why is Manufacturing Important?
Although manufacturing accounts for only 12 percent of the U.S. economy, it has exponential and widespread impacts across the economy, societies, and humanity.
Throughout history, manufacturing has improved quality of life, enabled the growth of human populations and societies, and drives innovation through the efficient mass production of materials.
History of Manufacturing
While manufacturing may be associated with high-tech facilities and modern methods such as Lean, Six Sigma, and JIT, it actually began long before the emergence of Homo Sapiens.
PREHISTORY AND ANCIENT HISTORY
Stone tool making, also known as the “Oldowan Industry”, is at least 2.3 million years old. The manufacturing of stone tools was partially responsible for human evolution as a result of hunter-gatherer lifestyles.
The manufacturing of stone tools optimized over many eons. Though little is known about production over that period, archaeologists found the longest-producing manufacturing site in Africa. At the site, stones were processed on a ten-kilometer stretch between two mountains for around a million years.
Specialization and the division of labor began to emerge in toolmaking during the Neolithic age (70,000 BCE) and more advanced tooling occurred as early as 35,000 BCE.
In ancient times, Greek philosopher Xenophon observed division of labor.
“In a small city the same man has to build beds, chairs, ploughs and tables and often even to build houses. […] But in the big cities [an artisan will get] his living merely by stitching shoes, another by cutting them out, a third by shaping the upper leathers, and a fourth will do nothing but fit the parts together.”
The division of labor that Xenophon observed in large cities allowed ancients to produce goods faster, better, and cheaper.
Manufacturing first began to loosely resemble modern processes during the Stone age (6,000 BCE), where Neolithic people manufactured pottery. The pottery technology, which produced high temperature kilns, is believed to led to advances in copper smelting.
By adding and smelting elements such as arsenic with copper ore deposits, ancient craftsmen engineered arsenical bronze. The Bronze age saw a transition from stone to metal, which was stronger and easier to shape. Similarly, the Iron Age saw widespread weapon and tool manufacturing using iron.
Ancient civilizations innovated and mass produced new technologies including the wheel and axel in and the six classic simple machines Mesopotamia, as well as Egyptian papyrus and pottery in the Mediterranean basin.
MEDIEVAL AND EARLY MODERN
In the 1960s through 1830s, the Industrial Revolution transitioned to new European and U.S. manufacturing processes. The manufacturing process transformed from hand made production to machine production powered by steam and water power. Additionally, machine tools and mechanized factory systems developed and the first industry to trial modern production methods was textiles.
After a decade-long economic recession followed by a few decades of technological innovation outside manufacturing, the Second Industrial Revolution in 1870 saw the emergence of modern manufacturing practices. Innovations included mass production, assembly lines, and electrical grids.
MODERN MANUFACTURING
The manufacturing industry gradually transitioned to modern practices in the 1890s as electricity became more practical and cost-efficient. As a result, many factories experienced a 30 percent increase in output.
Mass modern production became more attainable and consumer goods became widely available in the first two decades of the 20th century. Mass production was popularized by Henry Ford’s Ford Motor Company, which introduced sequential (or assembly line) production.
Toyota similarly innovated in the 1930s, when the car manufacturer developed lean manufacturing practices. Also known as ‘just-in-time’ manufacturing, the process reduced production and response times from suppliers.
Impacts of Manufacturing
Over the last two decades, China’s emergence as a global manufacturing leader has challenged domestic manufacturing bases.
As the deindustrialization of developed nations occurred (and continues to progress) as a result of outsourcing manufacturing offshore, employment shifted to the services sector. Many analysts believe that manufacturing is essential and raise concerns about the loss of domestic manufacturing.
Economies reap numerous benefits as a result of manufacturing including:
Economic growth is dependent upon manufacturing. In the United States, manufacturing productivity increases 3 percent each year as a direct result of technical innovation. In comparison, service industries report very slow growth because innovation is limited.
Because we have reached a point where machines can build, engineer, and maintain other machines, automation in the manufacturing industries leads to exponential economic and technological growth.
National power is also related to manufacturing productivity, which is used to generate wealth as well as military supplies and equipment. Consider that in the last 100 years, four to five of the most powerful countries have controlled three quarters of global machinery production. Some experts postulate that in the absence of manufacturing power imbalances, global power would also be balanced and result in fewer wars.
Trade relies heavily on manufacturing since goods constitute 80 percent of interregional trade, according to the World Trade Organization. Globally, countries who aren’t able to trade with other countries create large trade deficits and a reliance on other nations. Trade deficits eventually impact the value of national currency, which has trickle down effects on the cost of imported consumer goods.
Although the service industry represents the majority of global economies, manufactured goods are required to provide services. For example the business model for retail and warehousing industries (which constitute 11 percent of gross national product) revolves around selling manufactured goods. Airlines, utilities, and software companies rely on airplanes, telephone lines, and computer hardware.
Manufacturing jobs create more jobs. The Economic Policy Institute in the U.S. reports that every single manufacturing job creates three other jobs because wages are spent in other parts of the economy. Moreover, manufacturing creates middle class jobs and reduces poverty. Many manufacturing jobs are unionized, giving employees collective bargaining power.
The U.S. is one of the most innovative economies, consistently developing disruptive technology. Interest in domestic manufacturing within the U.S. is seeing a resurgence as a result of programs and initiatives aimed at rejuvenating the industry.
Industry and government leaders recognize the astounding benefits and advantages that come with a manufacturing economy. History provides assurances that investments in manufacturing innovation produce large dividends, if the American culture can rise to the challenge.
MANUFACTURE EFFICIENTLY WITH NRTC AUTOMATION
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Contact us today to learn more about how we can help you meet your production goals.