If there’s one thing that doesn’t change, it’s the fact that everything is always changing.
As you are probably aware from Gary Mintchell’s column last month, he has moved on from his day-to-day editorial duties with Automation World. Though he may not be a part of the daily operations here any longer, he is certainly still a part of the mix. Gary’s monthly column will continue and can be found at the beginning of the industry columns that reside at the back of the publication. His column this month can be found on page 57.
For those of you wondering who I am, you may recognize my name from several feature and news articles I’ve written, along with the blog I’ve maintained, since joining Automation World in June 2011. You may also recognize my name from stints as editorial director at other prominent industry media sites including Control Engineering and Design News. Though I may still be relatively new to Automation World, I have been covering industry since 1991, when I started my editorial career working on Modern Paint & Coatings and Robotics World. Looking back, I have had a foot in both the process and discrete sides of the manufacturing industries from the beginning.
I came over to Automation World principally to develop content for The Automation Conference (www.theautomationconference.com), which is entering its second year. I’ll still be overseeing content development for the conference as well as directing editorial for Automation World—thus my new title, Director of Content. It seemed more fitting, considering my duties associated with The Automation Conference as well as Automation World’s print and online entities.
From the highly touted re-shoring initiatives to the increasing adoption of consumer technologies such as mobile and wireless in manufacturing, it’s clear that major changes are afoot in industry as well. One of the more interesting insights I’ve come across about changes in industry comes from the McKinsey Global Institute.
The McKinsey report explores the blurring lines between manufacturing and services. Their report notes that manufacturing has always included a range of activities in addition to production, but that service-like activities—such as R&D, marketing and sales, and customer support—have become a larger share of what manufacturing companies do.
According to the McKinsey report, “More than 34 percent of U.S. manufacturing employment is in service-like occupations today, up from about 32 percent in 2002. Depending on the segment, 30 to 55 percent of manufacturing jobs in advanced economies are service-type functions, and service inputs make up 20 to 25 percent of manufacturing output.”
The report also estimates that 4.7 million U.S. service sector jobs depend on business from manufacturers. Explaining this further, the report states that “manufacturing companies rely on a multitude of service providers to produce their goods, including telecom and travel services to connect workers in global production networks, logistics providers, banks and IT service providers.”
>> The Manufacturing & Services Connection: Read more from the McKinsey Global Institute report mentioned in this column at http://bit.ly/V0X3is
Combining job counts across the total manufacturing and manufacturing-related service sectors means that total manufacturing-related employment in the United States would be 17.2 million, versus 11.5 million as cited in official 2010 data. This connection goes beyond job creation and into economics, as the report says that for every dollar of output, U.S. manufacturers use 19 cents of service inputs, creating a $900-billion-a-year demand for services; at the same time, services create $1.4 trillion in U.S. manufacturing demand.
The manufacturing/services economic connection may not be earth-shattering news to anyone, but the detail provided by McKinsey certainly helps put in perspective how closely the two are connected, as well as how reliant each is on the success of the other.
>> David Greenfield is Director of Content for Automation World and covers Factory and Process Automation in his blog at www.automationworld.com.