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Case Study of “Does America Really Need Manufacturing”.

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Submitted By harryv86
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Case Study of “Does America really need manufacturing”.
Sriharsha Vennelaganti-Fs0792

1. Summary:
In the case study we can see that the authors talk about the importance of innovation when it comes to the long-term success of every product company. By reading the article one gets an understanding that the authors are asking executives of any product company should not view manufacturing as a cost center and by shifting their manufacturing units offshore they are hindering a company’s capacity to innovate. In the end the authors give us different methods that a company can use to better improve their product line without shifting their manufacturing bases offshore and a way the government can help by providing policy incentives for the companies so that they can open their manufacturing units in United States.
2. Key Points:
When we read this case study the one major point it talks about is the importance of manufacturing for United States. The article talks about the importance of product and process innovation, the role R&D plays in manufacturing. In the case study we can see that the authors talk about modularity and the maturity of manufacturing process. Modularized products lead to flexibility when it comes to the needs of end users and marketing. When it comes to manufacturing process the article talks about manufacturing levers such as sourcing and process innovation. From reading the article we can see that the authors provide an inherent understanding of the relationship between modularity and innovation, their importance to a product company. In the end we can see that the important points mentioned in the article would be sourcing, product and process innovation and the importance of manufacturing to United States.

3. Critique:
Manufacturing is critically important to a country’s economy, it is woven into the structure of the economy. The article talks about this importance and how companies can keep their manufacturing units in United States without shifting them offshore for cheaper labor costs, subsidies provided by the local government and the desire for more direct access to overseas market. To be successful many large scale manufacturing operations must find a keen balance that addresses the more task-focused needs of the production process as well as the financial planning, oversight and control requirements of any major modern business organization. As I have mentioned couple of points in the above section, but here in this critique I will be talking about how sourcing can help a company to make a decision regarding keeping its manufacturing unit in United states. Modularity plays an important role in sourcing as we can see from the article, where modularity in product design can be seen as a way to new product development. Modularity in process design may speed new product manufacturing setup times, reduce costs, and enhance the profitability of the lower product volumes. Modular products tend to have fewer components for assembly and are therefore cheaper to assemble. Modules are created with some aspects of production in mind, however this modularization is done without understanding the implications of design. Although often yielding highly functional products, once the manufacturing process is over this unstructured modularization often leads to costly redesigns or expensive products. Modularity requires maintaining independence between components and processes in different modules, encouraging similarity in all components and processes in a module and maintaining interchangeability between modules. Modules can be used as information objects to bridge the business strategy with product architecture, for example they can be used to shorten the lead times and reduce costs. By using the same modular design in the production process lead times are reduced since no time is spent on redesigning or updating the module from one product generation to the next. Modularity also helps in service and maintenance where the modules are structured in such a way when the module stops functioning it can be removed from the production line in its entirety and replaced with a fully functional new module. Another example, modular sourcing helps OEMs to better cope with process complexity and when applied appropriately can increase manufacturing flexibility. In a modular sourcing relationship an internal or external supplier develops and produces a vehicle module (complex part) on behalf of the OEM. Such a modular supplier has an excellent process and product know-how and even develops key technologies at its own risk. The transfer of complexity to module suppliers allows OEMs to better focus on their core activities and improves the manufacturing flexibility. In order to develop and produce innovative solutions, module suppliers need to heavily invest in state-of-the-art machines and technology. These efforts are compensated by high-profit margins and long-term supply contracts with OEMs. Moreover, modular sourcing relationships are characterized by a high level of mutual dependence. A modular sourcing relationship functions as a symbiosis, both OEM and supplier benefit from the relationship and are at the same time highly independent. Across many industries U.S. companies are tied into highly efficient, low cost supply chains in Asia. At the same time offshoring has hurt where the companies have failed to make investments in skills. When manufacturing industries moved out of United States, a lot of engineering went with it so the companies have to spend extra time and money to create a skilled workforce which will help them keep manufacturing in United States. Human resources plays a prominent role in sourcing as workers with skills required to work in manufacturing units are needed. Modularity allows the designer to control the degree to which changes in processes or requirements affect the product and by promoting interchangeability, modularity gives designers more flexibility to meet these changing processes. This flexibility allows for delaying design decisions until more information is available without delaying the product development process. Another benefit is the availability of modularity to reduce life-cycle costs by reducing the number of processes and reducing repetitive processes. In the end manufacturing has been strength of United States economy for many generations and supplying the country’s needs through a strong domestic manufacturing sector will protect the country from strong economic and political disruptions.

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