The Industrial Enterprise

1. The Industrial Enterprise What is industry? Definition of Industry - a: systematic labor especially for some useful purpose or the creation of something of value b: a department or branch of a craft, art, business, or manufacture; especially: one that employs a large personnel and capital especially in manufacturing c: a distinct group of productive or profit-making enterprises <the banking industry> d: manufacturing activity as a whole <the nation's industry> Source: Merriam-Webster Dictionary

2. The Industrial Enterprise What is the goal of an industrial enterprise? To make money How does an industrial enterprise achieve it’s goal? • Design/develop a product or service • Produce the product • Market/sell product at a price greater than the cost to design/produce/finance/support

3. The Industrial Enterprise Examples of Industry: • Ford Motor Company • Boeing • Gulfstream What about the guy working out of his garage? How did Micheal Dell get started, or Bill Gates?

4. The Industrial Enterprise What types of industry should you actively pursue, or avoid? What is the future of production in the US? • commodities? • new products? Books of interest: • The Wealth of Nations – Adam Smith (1776) • Powershift – Alvin Toffler (1990)

5. The Industrial Enterprise Product Chronology: • Product, process, tooling and test design • Manufacturing/Production • Distribution • Product support and maintenance • Product and process disposal

6. The Industrial Enterprise Primary focus of this course: The production aspects of an Industrial Enterprise. More specifically: • What to make • How much to make • When to make it

7. Production Definitions: Production – a: the act or process of producing b: the creation of utility; especially: the making of goods available for use Production Control - systematic planning, coordinating, and directing of all manufacturing activities and influences to insure having goods made on time, of adequate quality, and at reasonable cost Source: Merriam-Webster Dictionary

8. Production Production is the management of human and technological resources to convert raw materials into finished products. (Askin and Goldberg) Fabrication – converting raw materials to products such as casting, machining, weaving Assembly – putting parts together Kitting – picking parts from storage needed to make a product, and loosely grouping into a package Separation – breaking a product or material into multiple components, such as ore and oil

9. Production Scope: Long-term planning Medium-term scheduling Short-term control

10. Measures of Competitiveness How do companies compete? • Price • Product Features • Quality and/or service reputation • Availability These business strategies will influence the production strategy.

11. Industry and the Economy -Philosophical Perspective An inquiry into the Nature and Causes of The Wealth of Nations – Adam Smith (1776), Edinburgh Scotland. • Capitalism • Free market economy • Division of Labor “THE greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.” (1st paragraph, chapter 1)

12. Industry and the Economy -Philosophical Perspective PowerShift – Alvin Toffler (1990), USA. Futurist Other books by Tofler – The Third Wave (1980), FutureShock (1970) • Fundamental move from an industrial society to an information society. • US will continue to be strong in manufacturing, but the number of workers in manufacturing will shrink. “The United States will continue to be a grea manufacturing power. There just won’t be as high a percentage of people working in factories.”

13. Industry and the Economy -Philosophical Perspective Article from Industrial Engineer (January 2004) – The Elephant in the room, Does anyone want to talk about what’s happening to manufacturing in America?

14. Industry and the Economy -Philosophical Perspective Closer to home: Brown and Williams Tobacco Company – moving all operations to North Carolina by 2006, peak employment of 4000 jobs. Consolidation and low cost foreign producers. YKK – 400 local jobs, down from 600 at turn of century. Price competition from overseas. Bassett Furniture – closed down in 2004, 150 jobs. Chinese competition. Keebler – shut down after 50 years (400 workers).

15. Industry and the Economy -Philosophical Perspective Closer to home (2006): • Bass Pros Shops – retail and distribution center • Kohl’s Distribution center opens (2005) • Sara Lee Distribution center opens • YKK – adding 200 jobs in Dublin. • Nichiha announces plans to build a facility in south Bibb County, producing fiber cement building products. • California Cereal Products purchases Keebler plant. • Macon-based Freudenberg Texbond completes a 50,000-square-foot expansion that will house a high-speed production line. • Geico announces it will add 200 jobs to its Macon operations. • Alterra Bioenergy is renovating a building in Wilkinson County, and the company should be ready to distribute biodiesel fuel by March.

16. Industry and the Economy -Philosophical Perspective Recession Times (2008): • $700B stimulus package (bailout) approved by House and Senate • Numerous bank failures and consolidations primarily due to mortgage crisis • Stock Market DJIA plummets from 14,000 to 8000 • US Economy officially in recession • GM and Chrysler go bank

17. Industry and the Economy -Philosophical Perspective Recession Ending? (Late 2009): • DJIA returns to 10500. • Ford may be profitable in 2010, may become no.2 auto manufacture behind Toyota • Kuhmo Tire continues delay of manufacturing plant • Some continued plant closings

18. Industry and the Economy -Philosophical Perspective Recession Ending? (2011): • DJIA exceeds 12,000. • Euro-zone economy on the brink • US unemployment falls below 10% • GM and Chrysler pay back government loans (called bail-outs by media) • Kuhmo Tire continues delay of manufacturing plant • No major industry announcements in middle GA • Some concern with RAFB job reductions • Mercer Ies/IDMs finding employment

19. Industry and the Economy -Philosophical Perspective Recession Over (2013): • DJIA exceeds 16,000 (all time high). • Euro-zone economy on the brink • US unemployment rate 7.3% (October 2013) • North American Auto production – 16.6 Million (2013) compared to 8.5 Million (2009) • Kuhmo Tire “wait is officially over” plant construction in August 2015 • RAFB forced days off • Mercer IEs/IDMs finding employment