Essential Manufacturing

5Manufacturing Concepts

In Chapter 1, it was shown that the purpose of manufacturing industry was the creation of wealth. This can be used to improve the quality of life both of individuals and the population in general. What, then, is the purpose of an individual manufacturing organisation within this industry? In line with the industry goal the individual company must also have wealth creation as its target. Just as wealth at a national level can be measured by the gross domestic product (GDP) per head, so the success of a manufacturing company is measured by how well it performs at making money. In practice, this is measured by the profit it makes, by the ratio of this profit to the value of the resources it has to employ, that is, its ‘return on investment’ (ROI), and by other factors such as the percentage share it has of the total possible market for its products. The fruit of a company that successfully makes money should be secure and well paid employment for the workforce, good working conditions, stimulation of the local economy around the manufacturing plant, incentives for further investment by shareholders and others to make the company ‘grow’ and of course a contribution towards the national economy. It has to do all of this within the context of caring for the environment including factory emissions, use of renewable energy and materials where possible, and producing environmentally friendly products designed for recyclability or ease of remanufacture.

The manufacturing ...