Increased manufacturing efficiency cuts costs, shores up supply chainBig companies are sustained by big suppliers and manufacturers, or so logic would hold. However, large businesses are turning increasingly to small, highly-efficient specialty manufacturers that rely more heavily on technical proficiency than large workforces.

The small shops employ fewer people who are extensively trained in their crafts. Over the past few years, manufacturers have "had to become much more efficient," according to John Husing, an economist and expert in labor economics. They have done so by "producing the same amounts with fewer employees," devoting more time to training and ensuring a fluid supply chain.

Gerold Pankl, who owns a factory that specializes in custom auto parts, affirms that it takes "one to three years to train" his employees, emphasizing that it "is very costly." This specialty manufacturing has grown in California over the past 30 years and has contributed to the decline in manufacturing jobs overall. Jock O'Connell, a principal consultant at Clark Street Group, avers that if the smaller shops "see a major uptick in orders, they would probably try to squeeze out more production," as opposed to adding workers.

As smaller manufacturers take on bigger orders, analysts are unsure whether they will start to hire additional workers. However, increased worker productivity cuts costs and promotes a streamlined supply chain.
Share To:

Strategic Sourceror

Post A Comment:

0 comments so far,add yours