Manufacturing Sector
Companies in this industry manufacture a wide variety of goods; major product groups include food and beverage, chemicals, machinery, transportation equipment, and computers and electronics. Major companies include Boeing, Caterpillar, DuPont, Ford, GE, General Motors, HP, IBM, Pfizer, P&G, and Tyson Foods (all based in the US); Nestlé (Switzerland), Sanofi (France), Siemens (Germany), and Toyota (Japan).
The top manufacturing countries include China with $4 trillion, accounting for about 30% of the world total, followed by the US at $2.3 trillion (about 17%), Japan at $1 trillion (about 7%), Germany at $800 billion (about 6%), and South Korea at $460 billion (3%), according to Safeguard Global.
The US manufacturing sector consists of about 290,000 establishments with combined annual sales of about $6 trillion.
Competitive Landscape
Globalization has opened new markets and opportunities for manufacturers but has also created new challenges, including how to manage far-flung supply chains and distribution channels. Manufacturers have turned to digitalization to improve efficiency across every area of operations, including product development, design, production, distribution, and marketing. However, implementing a successful digital transformation strategy -- including the leveraging of internet of things (IoT) technology and big data -- requires careful planning and significant investment.
Demand ultimately depends on consumer spending. The profitability of individual companies depends on efficient production and distribution. Large companies often have large economies of scale in purchasing, production, and marketing. Small companies can compete effectively by producing specialized products. The US manufacturing sector is fragmented: the 50 largest firms account for about 30% of revenue.
Many US exports are goods with?high technology content: motor vehicles and parts, semiconductors, computers, drugs, and agricultural and construction equipment. Leading export markets include Canada, Mexico, Japan, and China. A large portion of exports are components shipped to?Canadian?and?Mexican?factories for eventual re-entry to the US as finished products. Imports of manufactured goods to the US come primarily from China, Mexico, Vietnam, Canada, and India.
Competitive Advantages
Increasing Automation - Automating production is becoming the dominant means for reducing labor costs as wages in the developing world have increased, particularly in China. As low-wage production centers become rarer, companies that invest in automation can gain an edge over competitors.
Developing a Digital Transformation Strategy - Whether automating production, streamlining supply chains, developing marketing campaigns, or building connectivity into products, manufacturers must develop comprehensive strategies that leverage digital technology to increase competitiveness.
Focusing on Value-Added Products - Industry watchers expect many manufacturers to shift to a quality-over-quantity mindset in response to the rising numbers of middle-class consumers in the developing world. As consumers' incomes increase, they make up-market purchasing choices for everything from food to automobiles.
Products, Operations & Technology
The manufacturing of gasoline accounts for 30% of the industry revenue, as well as the manufacturing of trucks, truck tractors, and truck and bus chassis
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Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Financial Information
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Industry Forecast
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Industry Websites
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Glossary of Acronyms