COMPUTER‐BASED INFORMATION SYSTEMS: THEIR ROLE IN REVITALISING THE UNITED STATES MANUFACTURING INDUSTRY
| DOI | https://doi.org/10.1108/eb057513 |
| Published date | 01 July 1988 |
| Pages | 3-5 |
| Date | 01 July 1988 |
| Author | Wu Yong Kaw,John C. Malley |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
COMPUTER-BASED INFORMATION
SYSTEMS: THEIR ROLE IN
REVITALISING THE UNITED STATES
MANUFACTURING INDUSTRY
by Wu
Yong
Kaw and
John
C. Malley
University of Mississippi
Introduction
Since World War II, the US has been the most industrialised nation in the world. In the 1950s and 1960s,
the US had the highest standard of living in the world. Its Gross National Product (GNP) growth averaged
4 per cent per annum. Its dominance in economic and industrial affairs was unquestioned; however, since
the early 1970s, this dominance has slowly eroded. Recent GNP growth has averaged 2.5 per cent a year
and there is fear that the high standard of living so long enjoyed by the US may be in a state of decline. The
US is no longer the manufacturing powerhouse it used to
be.
The manufacturing industry is losing its competitive
edge to countries like Japan, Taiwan and West Germany. Ever-growing foreign competition has reduced the
market share of US products to their lowest level in years
—
from steel and manufacturing tools to automobiles
and consumer electronics.
In the early 1960s the United States produced 90 per cent of the colour TVs in the world. Today, more than
half are made in Japan. World exports of machine tools have plummeted from 23 per cent in 1984 to about
4 per cent today. While the United States produced about 50 per cent of the world's automobiles in 1960,
today the Japanese have taken over that distinction, and the list goes on[1].
What has happened to US manufacturing? Why has this competitiveness crisis emerged? This article analyses
this crisis and examines the use of computer technology and computer integrated manufacturing as possible
solutions to the crisis. Final remarks are then presented in the conclusions.
The Mass Production "Mentality"
In 1958, Galbraith[2] boasted that "we have solved the
problem of production". This statement was based on
a world manufacturing environment where US
supremacy was unchallenged. The US could produce
anything better and cheaper than anyone else in the
world.
There was little foreign competition. The world
was the marketplace for American industry. In this
environment, the US manufacturing function was
reduced to one of economies of scale where the
maximum number of products were produced at the
least cost. This, of course, brought about standard-
isation of products, stable production lines, and
relatively little product variety. The "mass production
mentality" was in place and working
well.
With the use
of production management models, productivity was
high and very efficient in the manufacturing sector.
In the 1970s the bubble burst. This mass production
"mentality" of centralisation, standardisation and stable
production to achieve efficiency of productivity created
an environment which stifled innovation and flexibility
of the manufacturing process. As a result foreign
competition, with a wider variety of products of higher
perceived quality and less cost began to capture a large
portion of the once US-dominated marketplace. On one
hand,
US industries were caught by the "productivity
dilemma". "Stated generally, to achieve gains in
productivity, there must be attendant losses in
innovative capacity; or conversely, the conditions
needed for rapid innovation and change are much
different from those that support high levels of
production efficiency"[3]. Though this study was
performed on the US automobile industry, it may be
quite true for most of the US industries in general. On
the other hand, US industries were vulnerable to foreign
competition in the area of technological aggressiveness
— new products and new processes[4].
Recently, US industry has responded to foreign
competition in an energetic and determined way. Clark,
Hayes and Lorenzo, however, described this response
as "back to the old game
plan"
where attention was
focused on the productivity process of maximising
efficiency through the use of industrial engineering
concepts and techniques of co-ordination and control.
It worked well in the 50s and 60s, didn't it? The premise
of this response is that rationalisation, standardisation,
high volume, stability, large scale production, strict co-
ordination and control will restore the former
IMDS
July/August
1988
3
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