Duvall & Associates, Inc.
BUSINESS ADVISOR NEWSLETTER
 

 Manufacturing enters new age

- by Alan Duvall 

Published in Dayton Daily News  August 26, 2007 

“The river flows – it flows to the sea.  Wherever that river flows, that’s where I want to be.”  The Byrds

 The steady current of evolution is transporting the mind-set of American manufacturing - from a one-stop shop for production - into an assembly-house for parts made outside the plant. 

The Boeing Company is undocking its landmark 787 Dreamliner, a passenger jet revolutionary not only in design, but in production techniques as well.   

Breaking long-standing tradition, many sections of the Dreamliner were designed and prefabricated in distant plants of independent companies, then shipped to Boeing for final Lego-mode assembly.  Executive fingers are crossed, praying this international production team can be properly coordinated and quality-controlled to meet tight sales schedules. 

In 1999, Daytonians experienced the economic impact of the assembly craze when General Motors spun off Delphi into an independent company.  Although myriad factors led to the separation, undeniably the severance transported GM further into the world of institutional assembly-mechanics. 

As computer capabilities and communications advance, the 20^th Century need to house all production capabilities within a singe facility is fading into oblivion.  Outsourcing is swiftly becoming the norm of the day.

 Low cost of overseas manufacturing is certainly a driving influence, but that explanation does not explain the Delphi spin-off.  Perhaps it is more attributable to a widening recognition the system works most efficiently when companies focus on their individual strengths. 

So it is many companies are outsourcing production while preserving assembly and even quality control functions, thus maintaining an “If you can’t beat ‘em – join ‘em” attitude. 

The trend is not limited to manufacturing as service providers are jumping into the fray.  Technology sectors have long outsourced programming and support tasks to overseas partners and numerous accounting firms ship data to India for tax return preparation. 

“Was there ever a time when you thought there’d be some assembly required?”  One Dollar Short 

Alan Duvall is a certified public accountant in Dayton.  Contact him at Alan@Duvallcpa.com.  Previous articles archived at www.duvallcpa.com.