Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
Article Type: Editorial From: Journal of Manufacturing Technology Management, Volume 22, Issue 7
What is the future of manufacturing? This is a regularly debated question and four years ago Journal of Manufacturing Technology Management devoted a special issue to the subject (Volume 18, Issue 8), which explored a number of topics including international manufacturing strategy, human resource aspects and China’s comparative advantage. However, at that time, nobody speculated about whether the increasing globalisation of manufacturing could continue and be sustained.
But in the last few years, much has changed and caused the idea of globalised manufacturing to be re-examined. Various world events, such as factory fires in Brazil, political events in Thailand, terrorist incidents in India and volcanoes in Iceland have caused disruption to production and international supply chains. On the other hand, many companies regarded these events as temporary problems and did little to change their strategies of seeking the lowest costs by taking their manufacturing activities offshore and establishing complex global networks of suppliers.
By contrast, in recent months, we have witnessed a whole new series of disruptions to manufacturing that go well beyond the type of problem so far experienced. The most dramatic of these was the Japanese tsunami and subsequent shut down of the Fukushima Daiichi nuclear power plant. Initially, the news coming out of Japan was that the effect on production would be only short term, as it was with previous incidents such as the Kobe earthquake and the fire at Toyota’s Aisin Seiki subsidiary, and the affected companies would quickly reestablish their manufacturing activities and supply lines. On this occasion, however, they did not recover so quickly and in fact the situation deteriorated as companies’ stocks ran down while the delivery of parts from suppliers were stopped. And the effect was not only felt in Japan. One month after the Japanese tsunami Honda’s factory in the UK was forced to halve production while Toyota’s factories in the UK, France, Poland and Turkey were all forced to shut down for prolonged periods.
So now, the real cost and associated problems of manufacturing offshore have started to become more evident to companies, as evidenced by a recent article in (The Economist 2011). Mainly concerned by higher wages in developing countries such as China and the risk associated with long, complex, supply chains many American companies are repatriating some of their production. They include a number of well-known names such as Caterpillar and NCR.
All this means that companies need to rethink many of the principles on which their manufacturing strategies have been based during the last 20 years. It also means that scholars have to investigate the consequences of reestablishing domestic manufacturing and all this implies in terms of supply, planning and control, industrial engineering and shop floor systems. Although, given the long cycle-times of academic research compared with changes to industrial production, I suspect the future of scholarly research will lag well behind the reality of the future of manufacturing.
(The) Economist (2011), “The dwindling allure of building factories offshore”, The Economist, 12 May