Product development teams are composed of an integrated group of professionals working from the nascent stage of new product planning through design creation and design review and then on to manufacturing planning and cost accounting. An increasingly large number of graduate and professional training programs are aimed at meeting that need by creating a better understanding of how to integrate and accelerate the entire product development process. This book is the perfect accompaniment and a comprehensive guide. The second edition of this instructional reference work presents invaluable insight into the concurrent nature of the multidisciplinary product development process. It can be used in the traditional classroom, in professional continuing education courses or for self-study. This book has a ready audience among graduate students in mechanical and industrial engineering, as well as in many MBA programs focused on manufacturing management. This is a global need that will find a receptive readership in the industrialized world particularly in the rapidly developing industrial economies of South Asia and Southeast Asia.
- Reviews the precepts of Product design in a step-by-step structured process and focuses on the concurrent nature of product design.
- Helps the reader to understand the connection between initial design and interim and final design, including design review and materials selection.
- Offers insight into roles played by product functionality, ease-of assembly, maintenance and durability, and their interaction with cost estimation and manufacturability through the application of design principles to actual products.
Product development teams are composed of an integrated group of professionals working from the nascent stage of new product planning through design creation and design review and then on to manufacturing planning and cost accounting. An increasingly large number of graduate and professional training programs are aimed at meeting that need by creating a better understanding of how to integrate and accelerate the entire product development process. This book is the perfect accompaniment and a comprehensive guide. The second edition of this instructional reference work presents invaluable insight into the concurrent nature of the multidisciplinary product development process. It can be used in the traditional classroom, in professional continuing education courses or for self-study. This book has a ready audience among graduate students in mechanical and industrial engineering, as well as in many MBA programs focused on manufacturing management. This is a global need that will find a receptive readership in the industrialized world particularly in the rapidly developing industrial economies of South Asia and Southeast Asia. Reviews the precepts of Product design in a step-by-step structured process and focuses on the concurrent nature of product design Helps the reader to understand the connection between initial design and interim and final design, including design review and materials selection Offers insight into roles played by product functionality, ease-of assembly, maintenance and durability, and their interaction with cost estimation and manufacturability through the application of design principles to actual products
Front Cover 1
Product Development 4
Copyright Page 5
Dedication 6
Contents 8
Preface to the second edition 12
Preface 14
Biographies 16
One 18
1 The Significance of Manufacturing 20
1.1 Globalization and the world economy 20
1.2 Importance of manufacturing 24
1.3 What is manufacturing? 26
1.4 Some basic concepts 28
1.4.1 Capital circulation or the production turn 29
1.4.2 Manufacturing capability 29
1.4.3 Mass production 30
1.4.4 Interchangeability 30
1.4.5 Product life cycle 30
1.4.6 The S curve of the technology growth cycle 31
1.4.7 Simultaneous or concurrent engineering 32
1.4.8 Design for “X” 33
1.4.9 The engineering problem-solving process 35
1.5 Summary 35
References 36
2 Developing Successful Products 38
2.1 Introduction 38
2.2 Attributes of successful product development 39
2.3 Key factors to developing successful new products 40
2.3.1 Uniqueness 41
2.3.2 Customer focus and market orientation 41
2.3.3 Doing the homework 41
2.3.4 Sharp and early product definition 42
2.3.5 Execution of activities 42
2.3.6 Organizational structure and climate 42
2.3.7 Project selection decisions 43
2.3.8 Telling the world you have a good product 43
2.3.9 Role of top management 43
2.3.10 Speed without compromising quality 43
2.3.11 Availability of a systematic new product process 44
2.3.12 Market attractiveness 44
2.3.13 Experience and core competencies 45
2.3.14 Miscellaneous factors 45
2.4 Strategy for new product development 46
2.4.1 Determining the company’s growth expectations from new products 46
2.4.2 Gathering strategic information 47
2.4.3 Determining existing opportunities 47
2.4.4 Developing a list of new product options 49
2.4.5 Setting criteria for product inclusion in the portfolio 49
2.4.6 Creating the product portfolio 50
2.4.7 Managing the portfolio 50
2.4.8 Developing new product plans 50
2.4.8.1 Understanding consumers and their needs 50
2.4.8.2 Understanding the market 52
2.4.8.3 Product attributes and specifications 54
2.4.8.4 Schedules, resources, financials, and documentation 54
2.5 Summary 58
References 58
3 The Structure of the Product Design Process 60
3.1 What is design? 60
3.2 The changing design process 61
3.3 Design paradigms 65
3.3.1 The need for a model 65
3.3.2 The need for redundancy 66
3.3.3 The scale effect 66
3.3.4 Avoiding starting problem analysis in the middle 70
3.3.5 Avoiding confirming a false hypothesis 70
3.3.6 Avoiding tunnel vision 73
3.4 The requirements for design 74
3.5 The design process 75
3.5.1 Problem confronting the designers 75
3.5.2 Steps of the engineering design process 76
3.5.3 Defining the problem and setting objectives 79
3.5.4 Establishing functions, setting requirements, and developing specifications 85
3.5.5 Developing provisional designs 88
3.5.5.1 Brainstorming 88
3.5.5.2 Analogies and chance 89
3.5.5.3 Analytic methods 90
3.5.6 Evaluation and decision making 92
3.6 Summary 95
References 95
Two 98
4 Design Review: Designing to Ensure Quality 100
4.1 Introduction 100
4.1.1 Why quality control? 101
4.1.2 Reactive versus proactive quality control 102
4.2 Procedures for incorporating high quality in design stages 103
4.2.1 Design for six sigma 104
4.2.2 Mistake proofing (Poka-Yoke) 105
4.2.3 Quality function deployment 106
4.2.4 Design review 109
4.2.4.1 SH review 111
4.2.4.2 Failure mode and effects analysis 112
4.2.4.3 Experimental design 112
4.3 Case studies 114
4.3.1 Design review case study 114
4.3.2 Six sigma case study 117
4.3.3 QFD case study 121
References 124
5 Consideration and Selection of Materials 126
5.1 Importance of material selection in product manufacture 126
5.2 Economics of material selection 129
5.2.1 Cost of materials 130
5.2.2 Cost of direct labor 130
5.2.3 Cost of indirect labor 130
5.2.4 Cost of tooling 131
5.2.5 Capital invested 132
5.3 Material selection procedures 132
5.3.1 Grouping materials in families 132
5.3.2 Grouping materials based on process compatibility 132
5.3.3 Super materials and material substitution 136
5.3.4 Computer-aided material selection 138
5.4 Design recommendations 139
5.4.1 Minimize material costs 139
5.4.2 Ferrous metals, hot-rolled steel 139
5.4.3 Ferrous metals, cold-finished steel 140
5.4.4 Ferrous metals, stainless steel (Franson, 1998) 143
5.4.5 Nonferrous metals (Skillingberg, 1998) 143
5.4.5.1 Aluminum 143
5.4.5.2 Copper and brass (Kundig, 1998) 143
5.4.5.3 Titanium 143
5.4.5.4 Magnesium 143
5.4.5.5 Zinc and its alloys 144
5.4.6 Nonmetals (Harper, 1998) 144
5.4.6.1 Thermosets and thermoplastics 144
5.4.6.2 Rubber 145
5.4.6.3 Ceramics and glass 146
References 148
6 Selection of Manufacturing Processes and Design Considerations 150
6.1 Introduction 150
6.1.1 Primary processes 150
6.1.2 Secondary processes 151
6.1.3 Tertiary processes 152
6.2 Design guidelines 153
6.2.1 Design guidelines for casting (Zuppann, 1998 DeGarmo et al., 1984) 153
6.2.2 Design guidelines for forging (Heilman and Guichelaar, 1998) 158
6.2.3 Design guidelines for extrusion (Bralla, 1998) 159
6.2.4 Design guidelines for metal stamping (Stein and Strasse, 1998) 160
6.2.5 Design guidelines for powdered metal processing (Swan and Powell, 1998) 162
6.2.6 Design guidelines for fine-blanked parts (Fischlin, 1998) 162
6.2.7 Design guidelines for machined parts (Bralla, 1998 DeGarmo et al., 1984) 164
6.2.7.1 Standardization 164
6.2.7.2 Raw material 164
6.2.7.3 Component design (general) 165
6.2.7.4 Rotational component design 167
6.2.7.5 Nonrotational component design 167
6.2.7.6 Assembly design 167
6.2.8 Design guidelines for screw machine parts (Lewis, 1998) 167
6.2.9 Design guidelines for milling (Judson, 1998) 169
6.2.10 Design guidelines for planing and shaping (Bralla, 1998) 169
6.2.11 Design guidelines for screw threads (Engineering Staff, Teledyne Landis Machine, 1998) 170
6.2.12 Design guidelines for injection molding 170
6.3 Manufacturing technology decisions 171
6.4 A typical part drawing and routing sheet 173
References 175
7 Designing for Assembly and Disassembly 176
7.1 Introduction 176
7.1.1 Definition and importance of the assembly process 176
7.1.2 Definition and importance of the disassembly process 176
7.2 Design for assembly 177
7.2.1 Definition 177
7.2.2 Different methods of assembly 177
7.3 Design guidelines for different modes of assembly 178
7.3.1 Manual assembly 178
7.3.2 Automatic assembly 180
7.3.3 Robotic assembly 180
7.4 Methods for evaluating DFA 180
7.4.1 The Hitachi assemblability evaluation method 181
7.4.2 Lucas DFA evaluation method 182
7.4.3 The Boothroyd-Dewhurst DFA evaluation method 186
7.5 A DFA method based on MTM standards 189
7.6 A DFA case study 191
7.7 Design for disassembly 193
7.7.1 Definition 193
7.7.2 Disassembly process planning 197
7.8 Design for disassembly guidelines 198
7.9 Disassembly algorithms 199
7.9.1 Product recovery approach 199
7.9.2 Optimal disassembly sequence planning for product recovery 200
7.9.3 Disassembly sequence planning for a product with defective parts 203
7.9.4 Evaluation of disassembly planning based on economic criteria 203
7.9.5 Geometric models and CAD algorithms to analyze disassembly planning 205
7.9.6 Automation of disassembly technology and predicting future trends 205
7.10 A proactive design for disassembly method based on MTM standards 206
7.11 A design for disassembly case study 207
7.12 Concluding remarks 217
References 218
8 Designing for Maintenance 220
8.1 Introduction 220
8.1.1 Importance of designing for maintenance 220
8.1.2 Factors affecting ease of maintenance 221
8.2 Maintenance elements and concepts 223
8.2.1 Maintenance elements 223
8.2.2 Maintenance concepts 225
8.2.2.1 Corrective (reactive) maintenance 225
8.2.2.2 Preventive (and predictive) maintenance 225
8.2.2.3 Maintenance of a degrading system 226
8.2.2.4 Aggressive maintenance 227
8.2.3 Design review for maintainability: planning for maintenance and its management 227
8.2.3.1 Review of design specifications 228
8.2.3.2 System review 229
8.2.3.3 Equipment evaluation 229
8.2.3.4 Component analysis 232
8.3 Mathematical models for maintainability 232
8.3.1 Simple models 232
8.3.2 An integrated approach to maintenance 234
8.3.3 Capital replacement modeling 234
8.3.4 Inspection maintenance 235
8.3.5 Condition-based maintenance 235
8.3.6 Maintenance management information systems 236
8.4 Prediction models for maintenance 237
8.4.1 The RCA method 237
8.4.2 The Federal Electric method 240
8.4.3 The Martin method: TEAM 241
8.4.4 The RCM method: maintenance management 243
8.4.5 Design attributes for enhancing maintainability 244
8.4.6 The SAE maintainability standard 246
8.4.6.1 Location 247
8.4.6.2 Access 248
8.4.6.3 Operation 249
8.4.6.4 Miscellaneous considerations 249
8.4.6.5 Frequency multiplier 251
8.4.7 The Bretby maintainability index 251
8.4.7.1 Description 252
8.4.7.2 Access section 252
8.4.7.3 Operations section 253
8.4.7.4 Other features 255
8.4.7.5 Using the index 256
8.4.7.6 General observations about the index 257
8.5 A comprehensive design for a maintenance methodology based on methods time measurement 257
8.5.1 A numeric index to gauge the ease of maintenance 258
8.5.2 Role of work standards and standard times 261
8.5.3 Common maintenance procedures and the parameters affecting them 261
8.5.4 Provision for additional allowances for posture, motion, energy, and personnel requirements 262
8.5.5 Design parameters affecting premaintenance operations 262
8.5.6 Structure of the index 264
8.5.6.1 Gaining access to components 266
8.5.6.2 Pre- and postmaintenance activities after access 267
8.5.6.3 Maintenance activities 267
8.5.6.4 Maintenance allowances 269
8.5.7 Using the index 270
8.5.8 Priority criteria for design evaluation 270
8.6 Developing and evaluating an index 273
8.6.1 Numeric index and design method for disassembly and reassembly 273
8.6.2 Numeric index and method for maintenance 273
8.6.3 Priority criteria for maintenance 273
8.6.4 A holistic method for maintainability 275
8.6.5 Design modifications and measures to enhance ease of maintenance 275
8.7 Design for maintenance case study 276
8.8 Concluding remarks 283
References 283
9 Designing for Functionality 286
9.1 Introduction 286
9.1.1 Definition and importance of functionality 286
9.1.2 Factors affecting functionality 286
9.2 Concurrent engineering in product design 287
9.2.1 Functionality in design 288
9.2.2 Function and functional representations: definitions 290
9.3 A generic, guideline-based method for functionality 293
9.3.1 Phase 1. Development of generic criteria for functionality 293
9.3.2 Phase 2. Validation and testing of developed criteria and processes 296
9.4 The procedure for guideline development 296
9.5 Functionality case study: can opener 300
9.5.1 Can opener architecture 300
9.5.2 Can opener manufacturing processes 301
9.5.3 Guideline development process for the can opener 301
9.5.4 Identification of important manufacturing variables affecting functionality 301
9.5.5 Functionality-manufacturing links 302
9.5.5.1 Design and technical requirements deployment 302
9.5.5.2 Product deployment 303
9.5.5.3 Process deployment 303
9.5.5.4 Manufacturing deployment 306
9.5.6 Survey development 306
9.5.7 Statistical analysis and testing 308
9.5.8 Hypothesis test results 317
9.5.9 Discussion of the results 317
9.5.9.1 Discussion of the reliability test 317
9.5.9.2 Discussion of the validity test 318
9.5.9.3 Discussion of the comparison between the two checklists 319
9.6 Functionality case study: automotive braking system 319
9.6.1 The function of an automotive braking system 319
9.6.2 The components of an automotive braking system 320
9.6.3 Wheel cylinder architecture 320
9.6.4 Wheel cylinder manufacturing processes 320
9.6.5 Guideline development procedure for the automotive brake system 321
9.6.6 Functionality-manufacturing links 322
9.6.6.1 Design and technical requirements deployment 322
9.6.6.2 Product deployment 323
9.6.6.3 Process deployment 323
9.6.6.4 Manufacturing deployment 323
9.6.7 Survey development 329
9.6.8 Testing and statistical analysis 329
9.6.8.1 Reliability test results 329
9.6.8.2 Validity test results 329
9.6.9 Discussion of the results 348
9.6.9.1 The reliability test 348
9.6.9.2 The validity test 348
9.6.9.3 Conclusions 348
References 349
10 Design for Usability 352
10.1 Introduction 352
10.2 Criteria for designing and manufacturing usable consumer products 353
10.2.1 Functionality 353
10.2.2 Ease of operation 354
10.2.3 Esthetics 355
10.2.4 Reliability 355
10.2.5 Serviceability and maintainability 356
10.2.6 Environmental friendliness 357
10.2.7 Recyclability and disposability 358
10.2.8 Safety 358
10.2.9 Customizability 359
10.3 Design support tools and methodologies 360
10.3.1 Design for producibility 360
10.3.2 Design for assembly 360
10.3.3 Robust design 361
10.3.4 Group technology 361
10.3.5 Quality function deployment 362
10.4 Design methodology for usability 362
10.4.1 Development of generic usability evaluation checklists 364
10.4.2 Development of generic design and manufacturing checklists 364
10.4.3 Reliability and validity testing 364
10.4.4 Testing the effectiveness of the design/manufacturing guidelines 364
10.5 Generic checklist design: methods and case studies 365
10.5.1 Product development for the usability of a can opener 366
10.5.1.1 Technical requirements deployment 367
10.5.1.2 Product deployment 367
10.5.1.3 Product architecture 370
10.5.1.4 Process deployment 370
10.5.1.5 Manufacturing processes 370
10.5.1.6 Manufacturing deployment 372
10.5.1.7 Discussion 374
10.5.2 Product development for the usability of a toaster 376
10.5.2.1 User requirements 376
10.5.2.2 Technical requirements deployment 377
10.5.2.3 Product deployment 377
10.5.2.4 Product architecture 377
10.5.2.5 Process deployment 380
10.5.2.6 Manufacturing processes 380
10.5.2.7 Manufacturing deployment 380
10.5.2.8 Discussion 384
10.5.3 Checklists for evaluating the usability of a consumer product 385
10.6 Case study for development of customized checklists 385
10.6.1 Gauging user requirements 411
10.6.2 Technical requirements 413
10.6.3 Product and process characteristics 413
10.6.4 Manufacturing process attributes 418
10.6.5 Development of usability and design checklists 420
10.6.5.1 Data collection 421
10.6.5.2 Results 421
10.7 Concluding remarks 433
References 433
11 Concurrent Consideration of Product Usability and Functionality 436
11.1 Introduction 436
11.2 Design methodology 437
11.2.1 Developing generic integrated design guidelines 439
11.2.2 Case study: can opener 443
11.2.2.1 Identifying linkages 443
11.2.2.2 Establishing technical requirements and generating product features 443
11.2.3 Manufacturing process 443
11.2.3.1 Process deployment 444
11.2.4 Can opener assembly 446
11.2.4.1 Manufacturing deployment 446
11.2.4.2 Development of generic guidelines 446
11.2.4.3 Inferences 446
11.2.5 Case study: mountain touring bike 448
11.2.5.1 Customized design and manufacturing guidelines 468
11.2.5.1.1 Development procedure 468
11.2.5.2 User requirements 468
11.2.5.3 Mapping design dimensions 469
11.2.5.4 Linkage identification 470
11.2.5.5 Technical requirement deployment 470
11.2.5.6 Product feature generation 470
11.2.5.7 Process characteristics 470
11.2.5.8 Checklist development 470
11.2.5.9 Survey deployment and testing 473
11.2.5.9.1 Data collection and analysis 473
11.2.5.10 Test results 474
11.2.5.10.1 Reliability and validity 474
11.2.5.11 Variable screening 474
11.2.6 Automatic transmission: case study 477
11.2.6.1 Components of an automatic transmission 478
11.2.6.2 Performance and usability of automatic transmissions as perceived by users 479
11.2.6.3 Usability–functionality design criteria 479
11.2.6.4 Description of group 479
11.2.6.5 Development of linkages using flow diagrams 480
11.2.6.6 Development of design guidelines 480
11.2.6.7 Survey deployment and analysis 481
11.2.6.8 Test results: reliability and validity 481
11.3 Conclusion 485
References 486
Three 488
12 Establishing the Product Selling Price 490
12.1 Why estimate costs? 490
12.2 Cost and price structure 491
12.3 Information needs and sources 494
12.4 Estimating direct and indirect costs 496
12.4.1 Direct labor costs 496
12.4.2 Direct material costs 498
12.4.3 Indirect or overhead costs 503
12.4.4 An example 504
12.4.4.1 Machining time 504
12.4.4.2 Cost of labor/piece 504
12.4.4.3 Material cost/piece 505
12.4.4.4 Overhead/piece 505
12.4.4.5 Total cost/piece 505
12.5 Product pricing methods 505
12.5.1 Conference and comparison method 505
12.5.2 Investment method 506
12.5.3 Full cost method 506
12.5.4 Direct costing or contribution method 506
12.6 Summary 506
References 507
13 Assessing the Market Demand for the Product 508
13.1 Why assess the market demand? 508
13.2 Methods for assessing the initial demand 510
13.2.1 Expert evaluation technique 510
13.2.2 Jury of executive opinion 510
13.2.3 Delphi method 510
13.2.4 Sales force composite 511
13.2.5 Supply chain partner forecasting 511
13.2.6 Market research 511
13.2.7 Decision tree diagram 512
13.2.8 Market potential–sales requirement method 512
13.3 Methods for determining the annual growth 513
13.3.1 Graphical displays of data 515
13.3.2 Constant mean model 515
13.3.3 Linear model 518
13.3.4 Quadratic model 518
13.3.5 Exponential model 520
13.4 Adjusting for seasonal fluctuations 521
13.4.1 Naive model 521
13.4.2 Moving average model 521
13.4.3 Exponential smoothing 522
13.5 Summary 525
14 Planning the Product Manufacturing Facility 526
14.1 Introduction 526
14.2 Determining the location of the manufacturing facility 527
14.3 Developing the preliminary design for the manufacturing facility 530
14.3.1 Determining space requirements 530
14.3.2 Assembly line balancing 532
14.3.3 Systematic layout planning 535
14.4 Summary 538
References 539
The Significance of Manufacturing
Manufacturing is critical for the economic well-being of nations. A country rich in resources but without the manufacturing know-how is unlikely to prosper, while countries that are resource poor but have this knowledge will grow rich. Globalization is leading the surge for output, and only the countries that have the knowledge to apply manufacturing technologies efficiently will remain competitive.
In this chapter, we provided a synopsis of the world economy and the impact of globalization. We discussed why it is important to pay attention to manufacturing. We also discussed the broad meaning of manufacturing; it is much more than simply converting some raw materials into finished products by means of processes. Finally, we defined and discussed some of the basic terms that are important in the overall understanding of the product design, development, and manufacture process.
Keywords
Globalization; emerging economies; gross domestic product (GDP); manufacturing; capital circulation; manufacturing capability; mass production; interchangeability; technology growth cycle; concurrent engineering; design for “X”; problem solving
1.1 Globalization and the world economy
Globalization of the marketplace is synonymous with, or akin to, the free flow of goods and services, labor, and capital around the world. Aided by huge improvements in global communication and the transport industry, the barriers to free trade are being eroded, and most countries are advancing on the path to embracing market capitalism. This includes not only traditional capitalist nations such as the United States and United Kingdom, but communist giants such as China and social republics such as India. In countries such as India and Brazil, large pools of inexpensive and relatively skilled workers are putting pressure on jobs and wages in the rich countries in Europe and North America and, lately, China (a machine operator in China earns about $6405 compared to $4817 in India; Time, 2013). For consumers, the benefits of free trade are reflected in cheaper and better quality imports, giving them more for their money. This, in turn, forces the domestic producers to become increasingly competitive by raising their productivity and producing goods that can be marketed overseas.
For a long time, the West (North America and Western Europe) dominated the world economy by accounting for most of the global output of products and services. This picture has undergone a major change in the last few years; currently over half the global economic output, measured in purchasing power parity (to allow for lower prices in economically poorer countries), is accounted for by the emerging world. Even in terms of GDP (gross domestic product), the emerging world countries (also referred to as the Third World or poor countries) account for nearly one-third the total global output and more than half the growth in global output. The trend clearly indicates that economic power is shifting from the countries of the West to emerging ones in Asia (King and Henry, 2006; Oppenheimer, 2006). At the present time, developing countries consume more than half the world’s energy and hold nearly 80% of the foreign exchange reserves; China leads the pack, with nearly $3.66 trillion in foreign exchange reserves (The Wall Street Journal, 2013). The exports of emerging economies in 2012 were approximately 50% of total global exports. Clearly, this growth in the emerging world countries, in turn, accelerated demand for products and services from traditionally “developed” countries. Globalization, therefore, is not a zero-sum game: China, India, Brazil, Mexico, Russia, and South Korea are not growing at the expense of Western Europe and North America. As individuals in emerging economies get richer, their need and demand for products and services continue to grow.
As the emerging economies have become integrated in the global economy, the Western countries’ dominance over the global economy has weakened. Increasingly, the current boost to global economy is coming from emerging economies, and rich countries no longer dominate it. With time, industrial growth in the developing countries, as indicated by the growth in energy demand (oil), is getting stronger. Figure 1.1 shows emerging economies in comparison to the whole world using a number of measures. For instance, growth in emerging economies has accounted for nearly four-fifths of the growth in demand for oil in the past 5 years. Further, the gap between the emerging economies and developed economies (defined by membership in the Organization for Economic Cooperation and Development prior to 1994), when expressed in terms of percentage GDP increase over the prior year (growth rate), has widened (Figure 1.2). Between 2003 and 2013, the emerging economies have averaged nearly 8.5% annual growth in GDP (International Monetary Fund, 2013) compared to just over 2.5% for the developed economies. Figure 1.3, for instance, shows the trend in the US GDP growth. If such trends continue, the bulk of future global output, as much as nearly two-thirds, will come from emerging economies.
Figure 1.1 Emerging economies as a percent of the world total. Source: Adapted from The Economist, August 4, 2011.
Figure 1.2 Emerging versus developed countries’ GDP growth rates 1986–2015. Source: Adapted from International Monetary Fund, World Economic Outlook Database, Hopes, Realities, Risk, 2011.
Figure 1.3 United States GDP growth in recent years. Source: Adapted from Bureau of Economic Analysis, U.S. Department of Commerce, 2012.
When the current and anticipated future GDP growth are put in historical perspective, the post-World War II economic growth and the growth during the Industrial Revolution appear to be extremely slow. It would be fair to say that the world has never witnessed the pace of economic growth, it has undergone in the last two decades. Owing to lower wages and reduced capital per worker, the developing economies have the potential to raise productivity and wealth much faster than the historic precedent. This is particularly true in situations where the know-how and equipment are readily available, for instance, in Brazil, Russia, and India; China has been losing the wage advantage as labor costs there are getting increasingly higher.
Associated with fast economic growth are higher living standards for the masses and greater buying power. While, on one hand, this has increased the global demand for products and services, on the other hand, it has created a fear of job and industrial output migration to less capital-intensive emerging economies. Such fears are baseless, as the increased demand in emerging economies is creating greater demand for products and services from both internal and external sources in the newly developing markets. The huge and expanding middle-class markets in China and India just prove the point. It is anticipated that the global marketplace will add more than a billion new consumers within the next decade. And, as these consumers mature and become richer, they will spend increasingly more on nonessentials, becoming an increasingly more important market to developed economies (Ahya et al., 2006).
While the integration of emerging economies is resulting in redistribution of income worldwide and a lowering of the bargaining power (lowering of wages and shifting of jobs to low wage countries) of workers in the West, it should be realized that emerging economies do not substitute for output in the developed economies. Instead, developing economies boost incomes in the developed world by supplying cheaper consumer goods, such as microwave ovens, televisions, and computers, through large multinationals and by motivating productivity growth in the West through competition. On the whole, growth in emerging economies will make the developed countries better off in the long run. Combined with innovation, management, productivity improvements, and development of new technologies, the developed economies can continue to create new jobs and maintain their wage structures. If wages remain stagnant or rise more slowly, this would have more to do with increasing corporate profit than competition from emerging economies. Figure 1.4 makes the point that corporate profits in the G7 countries have been increasing in the last four decades (U.S. Department of Commerce, 2012). Increased competition, however, should reduce profits and distribute benefits to consumers and workers over a period of time. An estimate by the Petersen Institute for International Economics states that globalization benefits every American family to the tune of $10,000 per year or nearly 10% of the family annual income (Bergsten, 2010). This translates into almost $1 trillion in benefits to the American economy and a tremendous boost in output.
Figure 1.4 G7 corporate profits as a percent of GDP. Source: Adapted from Bureau of Economic Analysis, U.S. Department of Commerce, 2012.
1.2 Importance of manufacturing
The synopsis of globalization and the state of the world economy presented in the previous section leads to a simple conclusion: global output will continue to rise, and at a faster pace as the consumer markets around the world get bigger and bigger. This presents both emerging and established economies with an unprecedented...
| Erscheint lt. Verlag | 12.8.2014 |
|---|---|
| Sprache | englisch |
| Themenwelt | Kunst / Musik / Theater ► Design / Innenarchitektur / Mode |
| Technik ► Bauwesen | |
| Technik ► Elektrotechnik / Energietechnik | |
| Technik ► Maschinenbau | |
| Wirtschaft | |
| ISBN-10 | 0-12-800190-9 / 0128001909 |
| ISBN-13 | 978-0-12-800190-5 / 9780128001905 |
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Kopierschutz: Adobe-DRM
Adobe-DRM ist ein Kopierschutz, der das eBook vor Mißbrauch schützen soll. Dabei wird das eBook bereits beim Download auf Ihre persönliche Adobe-ID autorisiert. Lesen können Sie das eBook dann nur auf den Geräten, welche ebenfalls auf Ihre Adobe-ID registriert sind.
Details zum Adobe-DRM
Dateiformat: PDF (Portable Document Format)
Mit einem festen Seitenlayout eignet sich die PDF besonders für Fachbücher mit Spalten, Tabellen und Abbildungen. Eine PDF kann auf fast allen Geräten angezeigt werden, ist aber für kleine Displays (Smartphone, eReader) nur eingeschränkt geeignet.
Systemvoraussetzungen:
PC/Mac: Mit einem PC oder Mac können Sie dieses eBook lesen. Sie benötigen eine
eReader: Dieses eBook kann mit (fast) allen eBook-Readern gelesen werden. Mit dem amazon-Kindle ist es aber nicht kompatibel.
Smartphone/Tablet: Egal ob Apple oder Android, dieses eBook können Sie lesen. Sie benötigen eine
Geräteliste und zusätzliche Hinweise
Buying eBooks from abroad
For tax law reasons we can sell eBooks just within Germany and Switzerland. Regrettably we cannot fulfill eBook-orders from other countries.
EPUB (Adobe DRM)Größe: 33,2 MB
Kopierschutz: Adobe-DRM
Adobe-DRM ist ein Kopierschutz, der das eBook vor Mißbrauch schützen soll. Dabei wird das eBook bereits beim Download auf Ihre persönliche Adobe-ID autorisiert. Lesen können Sie das eBook dann nur auf den Geräten, welche ebenfalls auf Ihre Adobe-ID registriert sind.
Details zum Adobe-DRM
Dateiformat: EPUB (Electronic Publication)
EPUB ist ein offener Standard für eBooks und eignet sich besonders zur Darstellung von Belletristik und Sachbüchern. Der Fließtext wird dynamisch an die Display- und Schriftgröße angepasst. Auch für mobile Lesegeräte ist EPUB daher gut geeignet.
Systemvoraussetzungen:
PC/Mac: Mit einem PC oder Mac können Sie dieses eBook lesen. Sie benötigen eine
eReader: Dieses eBook kann mit (fast) allen eBook-Readern gelesen werden. Mit dem amazon-Kindle ist es aber nicht kompatibel.
Smartphone/Tablet: Egal ob Apple oder Android, dieses eBook können Sie lesen. Sie benötigen eine
Geräteliste und zusätzliche Hinweise
Buying eBooks from abroad
For tax law reasons we can sell eBooks just within Germany and Switzerland. Regrettably we cannot fulfill eBook-orders from other countries.
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