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The year of change.

The year of change

Here it is 1984, and George Orwell's account of total control of society didn't come true after all. Not that we expected it would. It did make for interesting cocktail-party conversation though.

In some respects, what has been happening in the past few years-- while not as devastating as the scenario Orwell wrote about--has nonetheless been a grim reminder of the fragility of the world's economic system. A series of interrelated global events, aggravated by a severe recession, has changed the structure of business in general and of manufacturing business in particular.

In order to get some idea of what to expect for this year and beyond, we should take Naisbitt's advice and figure out what's happening now. International competition is very tough. Import competition is killing profit margins in many US industries. Our exports are in a weak position because of the strong dollar. Add to this the potential fiasco of our budget deficit, which has already weakened confidence to invest in production equipment, thus further delaying recovery.

As we slowly climb out of the recession (most experts say it will be a long-term thing) we see management closing plants, consolidating facilities to optimize operations, struggling with unions for wage concessions, and managing their assets in ways to minimize the need for capital investments.

Cooperative ventures have become a way out for some companies, such as certain machine-tool and most auto companies that saw irreversible declines in share of market. Former competitors are now partners as a means of survival in a "if you can't beat 'em, join 'em' type of action. If it comes off as planned, the GM/Toyota venture will be a real case study for the MBA schools to ponder for years to come.

Slogans about quality consciousness and better productivity will no longer do it if a company expects to stay ahead of competition. Application of innovative technology now available will certainly be needed. Things like just-in-time delivery of components directly from the supplier's flexible manufacturing system will be a way to assure survival and future growth.

We have also seen a new attitude developing on the part of manufacturing managers and their relationships with capital equipment suppliers that is worthwhile noting. An executive of one of the Big-Three auto companies recently revealed a new approach being used with companies from which they buy capital equipment. No longer will this carmaker buy capital equipment on the basis of promised performance; instead they will demand proof of performance based on simulated and extensive production runs of actual parts on the machinery builder's floor. Sign-off will not take place until the equipment is up and running in the carmaker's plant and meets all agreed-upon specs. It was also made very clear that should domestic machine-tool builders not be able to comply, foreign sources would be given a shot at all equipment needs.

Things are changing in the manufacturing world--1984 will be a year of many changes.
COPYRIGHT 1984 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1984 Gale, Cengage Learning. All rights reserved.

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Title Annotation:manufacturing in 1984
Author:Green, Dick
Publication:Tooling & Production
Article Type:editorial
Date:Jan 1, 1984
Next Article:Robot builders react to "shakeout" editorial.

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