The stock market may have become so enamored of computer related businesses and information technology, that some investors now neglect traditional manufacturing enterprises. Large physical assets, blue-collar employment, and multi-step production processes, which were once icons of the industrial revolution, are now looked down upon with scorn. Commercial realty has even replaced some bastions of industrial parks. Many important brands are no longer made by their owners and are being outsourced. Manufacturing has become unfashionable!
Do not write off the value of manufacturing as a management function! The template of economic transition from agriculture to industry may be here to stay, but the dominance of services over industry is set for reversal. Here are 3 top reasons for the revival of manufacturing excellence as a profit driver, which no stock market investor should ignore:
The insatiable demand for finished products, services, and raw materials from India and China, constitutes major opportunities for factories and production engineers throughout the world. Scores of industrial categories such as steel, which had become resigned to times of stagnating and even declining demand, now see inviting pastures ahead. Fiscal pressures on local manufacture have reduced thanks to World Trade Organization agreements. The concept of global sourcing from the most productive sites has taken hold of stock market thinking.
Environmental concerns have spurred innovation in manufacturing. Toyota, for example, excels in using less land and consuming less paint per automobile it produces compared to standards of the past. Apple Computers take back obsolete models, and recycle them extensively. Chemical units can actually operate without polluting air and water with their effluents. Organic waste can be transformed in to useful products. There is plenty of profit potential in upgrading manufacturing to modern standards. This makes it possible to create new stock market value through production technologies.
Plastic and fuel from field crops, new alloys used in nano-particles, for heat conduction, and for vehicle weight, are prime examples of the revolution in materials which give a new lease of life to the traditional skills of competitive manufacturing. Stock market analysts have begun to discover new opportunities in the function of manufacturing competence, which we were led to believe was becoming redundant!
Not every company can rediscover the profitability and competitive distinction of manufacture. Upgrades to new technology and standards calls for large and sustained investment, and retraining of the work force as well. That is why competencies in manufacturing may make the difference between winners and others, in the new markets that begin to unfold!