The Common Sense of CIM
| Date | 01 July 1990 |
| Published date | 01 July 1990 |
| Pages | 3-8 |
| DOI | https://doi.org/10.1108/02635579010145426 |
| Author | J. Tracy O′Rourke |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
THE COMMON SENSE
OF CIM 3
The Common
Sense of CIM
J. Tracy
O'Rourke
C
IM requires new ways of looking at
investments, which offer
survival,
growth
and prosperity.
Introduction
If this article does not make you think positively about
CIM nothing will!
A
whole new philosophy of business must be adopted by
companies considering Computer Integrated
Manufacturing
(CIM).
They must broaden their thinking
to strategic dimensions and they must be ready for bold
action. Some manufacturers already know that; they have
felt the sharp sting of international competition. They have
discovered that their competitors are on the next
continent, as well as in the next town.
American manufacturers have probably felt more pain than
any other group. The US Department of Commerce
recently reported that America's share of world trade
shrank from
21
to
14
per cent
in
the past quarter century.
In that time, the US trade balance tumbled from
a
healthy
5 billion dollar surplus to a 152 billion dollar deficit. And
it gets worse. In less than a decade, America's trade
balance in manufactured goods fell from an
11
billion dollar
surplus to a 39 billion dollar deficit.
Efforts
by
politicians and others to save blue-collar jobs have
probably slowed US manufacturers' progress in becoming
more competitive and could move them towards the position
in which British manufacturers have found themselves.
Some
time
back Peter Drucker
wrote:
"The British example
indicates a new and critical economic equation: a country,
an industry, or a company that puts the preservation of
blue-collar jobs ahead of international competitiveness will
soon have neither production nor jobs".
First presented at the International Conference on Strategic
Manufacturing held at Gleneagles, Scotland, 1989.
However, despite the dismal statistics, manufacturing is
still very big business in the USA. Manufacturing's
contribution to the gross national product has remained
a constant 19 to 25 per cent since 1947. The wealth is
there, even if the jobs are not. There are going to be a
lot fewer people operating US factories of the future and
those who remain are going to be Very Important People
— VIPs in a very real sense because they will have
significantly more responsibility than the factory worker
of today. The trend is already evident.
The
Wall
Street
Journal
recently reported that since late
1982,
when the recession bottomed out, manufacturing
jobs have increased by less than 6 per cent, while
manufacturing output, as measured by the Federal
Reserve Board index, has increased nearly 35 per cent.
To
fill the manufacturing jobs that remain
is a
labour force
that will expand by only 1 per cent annually in the next
decade
—
well below the 3 per cent annual growth of the
1970s.
And that workforce
will
be older
—
six years older
on average
—
than at any time in the history of the USA.
US manufacturers increasingly recognise that today the
only way they can meet global competitors head on
—
and
win
—
is with
CIM. So
what
is
causing
all
this change?
Peter Drucker recently observed that economic dynamics
have shifted us from a national economy to a global one.
Only
a
few decades
ago
the world's economies were based
on natural resources. A nation's climate, waterways and
minerals created the competitive advantages which defined
its manufacturing specialisations. Then, in the 1960s, we
began to see the emergence of a created competitive
advantage: lower labour
costs.
Developing countries with
large labour pools attracted manufacturers from more
industralised countries who sought the advantage of lower
labour costs.
These developing nations shaped their
own
manufacturing
specialisations. They gradually built
capital,
and developed
infrastructures of transportation and communication. Today
they put pressure
on
the more advanced
economies.
Thus,
the international playing field has been levelled
considerably.
Natural resources
have
decoupled from national boundaries,
direct labour
is
decoupling from production, and capital and
technology have combined to form a new driving force.
Today, any country can buy raw materials such as oil and
copper on the world market — and they will pay
approximately the same price as anyone else. So, natural
resources are no longer a differentiator. Neither are the
wages of
a
nation's labour force, because direct labour is
an insignificant cost factor in advanced manufacturing.
These changes are forcing advanced nations to compete
with three resources: capital, technology and know-how
—
the kind of technical "know how" found only in large
pools of educated professionals.
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