PROC 5820 Webster University Operations and Supply Chain Management Essay

PROC 5820

Webster University


Question Description

I’m trying to study for my Writing course and I need some help to understand this question.

Your assignment is to develop an essay (3 to 5 pages) describing the forces at work which may lead to a renewed interest and resurgence in manufacturing within the United States. What trends do you see which may lead to this outcome? In what way can the study of Operations and Supply Chain Management inform and enhance the likelihood that this resurgence might succeed.

Key point of the Essay:

Material points --

Identification of key issues.

Skill(s) in writing to include spelling, grammar, punctuation, etc.

Clear defined assumptions.

Logical thought progression and argument development.

Convincing summary/conclusion.

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{December 2018} JAMES FALLOWS NOV 28 2018, 8:51 PM ET Mr. China Comes to America For decades, every trend in manufacturing favored the developing world and worked against the United States. But new tools that greatly speed up development from idea to finished product encourage start-up companies to locate here, not in Asia. Could global trade winds finally be blowing toward America again? Near the end of this year’s second presidential debate, Candy Crowley of CNN pointed out that iPads, iPhones, and other globally sought-after Apple products are all made in China. What would it take, she asked both Mitt Romney and Barack Obama, to “convince a great American company to bring that manufacturing back here?” I listened to this question with special interest, since I was following the debate, via hotel-room TV, from the Shenzhen manufacturing zone of southern China, where many of those same iPads and iPhones are made. For the few days before the debate, I’d been revisiting PCH International, an outsourcing company I’d first written about for this magazine in 2007, in “China Makes, the World Takes.” The company’s revenues have increased more than sevenfold since then and its workforce has grown almost as fast, despite the years of global recession. This is testament both to its own success and to the nonstop surge of outsourcing contracts to China. The day after the debate, I walked through the famous Foxconn complex in the Longhua district of Shenzhen, where some 230,000 Chinese workers, mainly between the ages of 18 and 25, turn out products sold under international brand names, from Apple and Dell to Nintendo and Sony. Another Foxconn facility not far away employs another 200,000 people; throughout China the company’s workforce numbers 1.3 million. On previous attempts to get in over the years, I had never made it past Foxconn’s front gate—not surprising given the company’s policy of stiffarming most foreign and domestic reporters. But a new PR team at Foxconn had apparently decided that closed-door secretiveness was making the company look even worse than it otherwise would. (If only this team were in charge of Chinese government policy—regarding the press, the Internet, letting people into and out of the country, and so much more.) Immediately after hearing the allusion to Chinese-made products on TV, I e-mailed an official at Foxconn and said that so prominent a mention in American politics would be a great news peg for a visit. I was fully expecting another turndown, but to my surprise, the company agreed. The next morning, I went to the factory and was told I could roam around and take pictures of anything I wanted, as long as I did not show or mention any of the brand-name products coming off its assembly lines. What I saw at these Chinese sites was surprisingly different from what I’d seen on previous factory tours, reflecting the political, economic, technological, and especially social pressures that are roiling China now. In conjunction with significant changes in the American business and technological landscape that I recently saw in San Francisco, these changes portend better possibilities for American manufacturers and American job growth than at any other time since Rust Belt desolation and the hollowing-out of the American working class came to seem the grim inevitabilities of the globalized industrial age. For the first time in memory, I’ve heard “product people” sound optimistic about hardware projects they want to launch and facilities they want to build not just in Asia but also in the United States. When I visited factories in the upper Midwest for magazine stories in the early 1980s, “manufacturing in America” was already becoming synonymous with “Rust Belt” and “sunset industry.” Ambitious, well-educated people who had a choice were already headed for cleaner, faster-growing possibilities—in consulting, finance, software, biotech, anything but things. At the start of the ’80s, about one American worker in five had a job in the manufacturing sector. Now it’s about one in 10. Many factory managers say openly that they prefer women: women, they say, learn new jobs faster, handle high-precision work better, and pose fewer disciplinary challenges. Whether you call the business history of the past 15 years the age of hedge funds, the age of Google (or its rival Facebook, or its other rival Amazon, or its other rival Apple), the age of Walmart, or even the cautionary age of Lehman Brothers and Countrywide, in no case would you call it the age of American manufacturing. Manufacturing’s share of the total American economy has fallen by about the same amount as its workforce share: it went from about 20 percent in the early 1980s to just over 10 percent now. For comparison, manufacturing accounts for some 30 percent of China’s total economy. Still, the U.S. economy is so much larger that our manufacturing sector, even in its battered condition, remains the largest in the world. I’m used to hearing excitement from people at American infotech companies—or from biotech innovators, or people in other enterprises who believe the future is on their side. I’m used to hearing it in China. I’ve gravitated to tech topics and to fast-growing parts of the world because I like hearing from people with big plans and dreams. And this year, for the first time in decades, I have been hearing upbeat accounts from business officials and entrepreneurs engaged in American manufacturing. The heart of their argument is this: Through most of post–World War II history, the forces of globalization have made it harder and harder to keep manufacturing jobs in the United States. But the latest wave of technological innovation, communications systems, and production tools may now make it easier—especially to bring new products to market faster than the competition by designing, refining, and making them in the United States. At just the same time, social and economic changes in China are making the outsourcing business ever costlier and trickier for all but the most experienced firms. For Americans, the most important factor is the emergence of new tools that address an old problem. The old problem is the cost, delay, and inefficiency of converting an idea into a product. Say you have an idea for—anything. (For me, the list would start with silent leaf blowers, which I’d give to all my neighbors as gifts.) Before you can earn the first dollar from the first customer, you have to decide whether the product can be built, at what cost, and how fast, so you can beat anyone else with the same idea. For the first time in memory, I’ve heard “product people” sound optimistic about hardware projects they want to launch and facilities they want to build not just in Asia but also in the United States. The need to reduce costs has driven much of this work outside the United States. The possibility of saving time may bring some of it back. For instance, at Lime Lab, a small industrial-design firm in San Francisco, a design engineer named Adam Mack told me that technologies including 3-D printing were revolutionizing the process of deciding what to build and where. Threedimensional printing refers to computerized molding or related systems that can produce tangible objects in a matter of minutes or a few hours, on the basis of designs created on a screen. This dramatically speeds up the process of creating a prototype and then trying out variations and working out flaws. “Before, you could sit around and talk about something you wanted to make,” Mack said. “Now you can have a prototype of an injection-molded part in your hand the next day, and confer with factory managers about how much it would cost to build.” By making manufacturing generally more attractive and feasible, new tools will—so I heard many times—lead to more good jobs in America than we would have thought possible only a few years ago. “A revolution is coming to the creation of things, comparable to the Internet’s effect on the creation and dissemination of ideas,” Linus Chung told me at Lime Lab, in San Francisco. (Chris Anderson, formerly of Wired, has recently advanced a similar case in his book Makers.) Chung is an American-born, Stanford-trained manager who now works for PCH International and is based in Shenzhen. This past June, PCH bought Lime Lab as part of an expansion into America to encourage more start-ups and manufacturing work here. “There is a whole new interest in hardware in Silicon Valley,” said Phil Baker, a product-development expert who has worked with Apple and other companies since the 1970s. “I’ve never seen a more exciting time in the hardware business.” Why “exciting”? Let’s consider the changes affecting China, and America, and manufacturers everywhere. The Big Picture For the past 30 years, all of the largest forces have pushed in favor of China’s manufacturing expansion, from very low labor costs and a deliberate policy of welcoming foreign investment, to ever faster and cheaper global cargo-shipment networks, to a deliberately undervalued Chinese currency. Within the past two years, nearly all of those advantages have become more complicated. (In his accompanying article for this issue, Charles Fishman explains some of the large forces pushing in favor of America’s manufacturing renewal.) In China, wages are rising, workers are becoming choosier, public resistance to environmental devastation is growing, and the Chinese “investment led” model is showing strain. That model has involved a kind of hyper-Keynesianism far beyond what the United States experienced even during the most government-run periods of the New Deal. China has created jobs by building factories, highways, railroads, and dams—and airports where there are no cities, and cities where there are no people. “Americans are used to thinking of ‘savings’ and ‘investment’ as absolute goods, because we’ve done too little” of both, Michael Pettis, of the Guanghua School of Business in Beijing, told me. “But there is such a thing as too much savings and investment and infrastructure, and too little consumption, all of which we see in China.” If the American public challenge is “reinvestment” of all varieties—in education, in infrastructure, in a sense of community, in everything but houses—the Chinese counterpart is a need for a comprehensive rebalancing. Indeed, Pettis’s forthcoming book on the Chinese economy is called The Great Rebalancing. Reliance on exports needs to come into better balance with domestic consumption; economic growth with environmental sustainability; political liberties with the new level of economic prosperity; and on down a long list. Some observers inside and outside China think that the strains are too great and the system too rigid to allow the necessary rebalancing in time for the party to maintain political control. For instance, Minxin Pei, a native of Shanghai who now teaches at Claremont McKenna College in California, has been warning for more than a decade that the economic, social, and political imbalances of the Chinese system would reach a breaking point just about now—and that Communist rule would have to give way to a multiparty system. Many others contend that, on the contrary, the Communist leaders will manage somehow to address each of today’s problems just before any one becomes an outright emergency, as they have done time and again for 30 years. Whichever view proves correct, the relevant point for Americans is a convergence of trends that make operations here more attractive and feasible, just as the cost and friction of operating in China are increasing. The Factory-Level View, From the World’s Biggest Factory I had a more vivid sense of some of these challenges after this latest look at Chinese factories— especially at Foxconn, the world’s largest electronics maker. You learn a lot about China from its factories, of which I have now visited nearly 200—just as you would have learned a lot about the England of Charles Dickens and Friedrich Engels by seeing its factories, and the America of Theodore Dreiser and Upton Sinclair. Factories are not the only arenas for high-speed social transformation in China: its farms, from which working-age people are fleeing, and its cities, to which millions of people migrate each year, are also the settings for individual dramas and collective adjustment at a rate and on a scale that the world has never previously seen. But on this trip I spent time in factories. And what I saw underscored the ways in which the tumultuous transformation of China is complicating life for its outsourcers and exporters. At the Foxconn plant I visited, I know firsthand only about conditions I could observe in four hours of walking around the more than one-mile-square “campus” and being taken into selected dormitories, cafeterias, training rooms, and assembly-line areas by members of the newly accommodating Foxconn PR team. One part of the visit had the unmistakable note of the staged: In the sole dormitory we entered, whose occupants were all on their shifts at work, every towel and pillow in the four-bunk room I saw was perfectly aligned. The clothes were on hangers in precise order, and there was not a scrap of extra paper or debris on desks, dressers, the floor, or anywhere else. I could only assume that this room had been specially cleaned up; other parts of the campus resembled most other parts of China in being much more casually groomed. I’m acutely aware of all the things I did not see: conditions at night, the dorms where not four but six or eight workers live in each room, assembly lines where hazardous materials might be used or where the pace is exceptionally fast. Still, what I was allowed to see was more than a tiny keyhole glimpse—and my movement around the campus was less rather than more controlled than I’d been accustomed to on other factory visits. The scale of buzz and activity was so vast— cafeterias with thousands of people getting lunch, bus and shuttle stops with hundreds of workers waiting for a ride, coffee shops and convenience stores crowded with Foxconn patrons— that I doubted that every detail could have been orchestrated overnight. Plus, there were products to ship. At most other big Chinese factories I’d seen, people walked around all day in uniforms—usually gray or blue coveralls for men, light-colored smocks for women. At Foxconn, people wore antistatic jackets and caps when at work on the assembly lines and shirts or vests with the Foxconn logo when in offices. But when walking to the cafeteria, going to the shops, or commuting to normal off-site apartments, where three-quarters of the workforce lives, people were dressed in the blue jeans or cargo shorts and fake Polo or NBA shirts of a normal Chinese crowd. On the lines I did see, where printed circuit boards and other electronic components were being put together in a process that combined the use of large, fancy, expensive machinery with detailed handwork, the pace and supervision seemed no looser or tighter than I’d seen at comparable sites elsewhere in China. If you are looking for the most-gruesome factory conditions in China, you don’t go to a multinational giant like Foxconn, which has to deal with Western customers and pay at least some attention to appearances and laws. You go instead to the small, ramshackle, often unregulated workshops, often away from the big cities, where conditions are as inefficient and sometimes as unsafe as they were when China was just beginning to industrialize. Although I had heard about the Foxconn “suicide nets,” I was still taken aback to see them. Most dormitories and factory buildings on the site are five or six stories tall. Outside every upperstory window, open balcony, and other spot from which someone might plunge, the company has installed netting about 20 feet above ground level. The founder and CEO, Terry Gou, ordered the nets installed after a spate of jumping suicides in 2010; many of the upper windows also now have latches that keep them from opening fully, and some balconies have a fine mesh of jump-prevention wire. The idea, I was told by a Foxconn spokesman, was that while some suicide attempts reflect deep mental illness or depression, others are impulsive and halfthought-through, so anything that even slightly slows an attempt might deter a suicide altogether. (The peak suicide rate for Foxconn came in 2010, when it reported a total of 12 “completed” suicides at all its Chinese plants. On a per capita basis, this was below the suicide rate for China as a whole, but everyone at Foxconn recognized it as an emergency.) But to me the most significant aspect of the visit—one my hosts were so inured to that they barely mentioned it—was the sight of the enormous throngs at Foxconn’s recruiting and newworker training sites on campus. In a typical week, the Shenzhen Longhua facility will take on about 2,000 new employees for its own factories, and recruit and train many more for other Foxconn sites. It brings in so many people because so many keep heading out; the annual turnover rate at the plant is about 60 percent—high but not astounding by Chinese standards. A convergence of trends make operations in America more attractive and feasible, just as the cost and friction of operating in China are increasing. You can draw many conclusions from this rate of churn. Anita Chan, an expert on Chinese labor conditions at the University of Technology, Sydney, said the turnover indicated some brutal realities of Chinese factory life, in ways that reflected both well and poorly on Foxconn itself. “Why do workers still go to Foxconn despite its bad reputation?” she asked, in an interview with The China Story, an Australian online journal. “I believe that it is because they know that Foxconn pays wages on time. While this may appear to be a crude view, workers at Foxconn often come from smaller companies where they have been cheated, are underpaid, or even owed wages. In this context, they know that Foxconn is synonymous with an assured income.” But to earn more money—or even enough money to stay ahead of fast-rising food and housing costs— the workers find that they have to put in overtime. According to Chan, “They willingly comply until they get totally exhausted and cannot tolerate the long work hours anymore. Their solution then is to quit.” Some go back to Foxconn; some go, often with a group of friends, to another factory in hopes of a better deal; some find retail jobs; some move back home or to other parts of the country. All in all, they change the labor dynamics of China’s vast factory zone, steadily increasing the cost and reducing the predictability of doing business there. I spoke about workforce churn with Foxconn’s Louis Woo, whom I had met years earlier in Shanghai. Woo and Terry Gou had become friends in the early 1990s, when Woo was the general manager of Apple Taiwan. Four years ago, Woo accepted Gou’s offer to be Foxconn’s chief spokesman, and moved to Shenzhen. Woo told me that Gou, who turned 62 on the day of my visit, was at this stage of life increasingly conscious of the social as well as the purely industrial legacy of his work. Terry Gou has done as much as anyone since Deng Xiaoping to shape life in China, or at least in the factory-dense southern part of the country. Although Gou is Taiwanese and Foxconn’s headquarters are in Taiwan, the company is the largest private employer in mainland China. According to Louis Woo, Gou is aware of the example of Henry Ford. Not the Ford of the assembly line and the mass-marketed Model T, whose achievements Gou has already matched, nor the elderly Henry Ford of the anti-Semitic conspiracy theories. Rather, the “welfar ...
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