ENGR 0011 Dr. Vidic, 2:00 PM
Group R10
DOMESTIC MANUFACTURING: NOT MADE IN THE USA
Melissa Morello (mlm181@pitt.edu)
INTRODUCTION: WHAT IS THE
PROBLEM?
What makes the United States of America the country
with the most influence in the world? Strong military force?
Democracy? Patriotism? Whatever the answer, it is not the
products manufactured in this country. Most products are
imported from foreign countries [1]. The main reason there
are so many imported goods is because of the reduced cost.
The cost of labor is significantly less in other nations than in
the United States. Manufacturing in the United States is
becoming more and more rare, and this is a substantial
problem because this country needs the economic support of
domestic manufacturers to restore this economy to full
health and provide a superior quality of products. This
problem connects to engineering because a main component
of industrial engineering is improving manufacturing
processes. When there are fewer production plants in the
United States, there are a smaller number of industrial
engineering jobs available. Onshoring is the only way to
keep domestic manufacturing alive in the United States for a
better quality of the product. The reason I am so passionate
about this issue is because as a future industrial engineer,
onshoring is the only way to keep the manufacturing field
job market as non-competitive as possible. This engineering
problem is also crucial to the ethics and education of
engineering. With numerous companies recalling products
every year, it is very easy for engineers to be at fault for the
poor quality of the product due to a lack of supervision. I
believe it is strongly necessary for freshman engineers to be
educated about the problem of offshoring and how they can
avoid being a part of a scandal involving products being
recalled due to a lack of professional ethics.
WHY IS THIS A PROBLEM?
A consequence of the current economic state is a high
unemployment rate. Many American citizens are unable to
find a job or have been released of their job due to the
current recession. Among these jobs are positions for
industrial engineers to make manufacturing processes reach
their full potential. Offshoring leads to fewer jobs, and as a
result, an even poorer quality of the product being made.
Quality
When American citizens think of American-made
products, they think of great quality. If someone was to
compare a product made in the United States versus China,
most likely that person would choose the American-made
University of Pittsburgh, Swanson School of Engineering
October 30th, 2012
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product. Americans have always held themselves to high
standards, so why choose to buy poor quality products? The
reason for this poor quality is again, the cheap labor. With
cheaper labor, there comes a product not made to its fullest
potential [1]. An example of this is associated with the
optoelectronics company Fuchs and Kirchain.
This
company decided to offshore because of cost pressures.
Although this labor was a more frugal option, the innovation
of their processors decreased significantly [2]. A better
processor could have been built if Fuchs and Kirchain did
not choose offshoring to cut costs. Another example of poor
quality is the recalls of Mattel toys in 2007. In August of
2007, millions of toys were recalled made by Mattel due to
high lead content. All of these products were manufactured
in China via offshoring [3]. Because the labor was not
expensive, the quality of the work was much less than it
needed to be. The Mattel manufacturers did not oversee the
production of these toys well enough to catch the high lead
content because they were not in the United States. If the
plants were not in China, this famous recall could have been
avoided. The Mattel recalls of 2007 violated the first
principle of industrial engineering ethics “Using their
knowledge” [4]. Without a higher number of engineers onsite in the production plant, the lead content of the toys was
not caught. If there were more engineers, the lead content
would have been reduced dramatically and the toys would
not have been released to the public with an unsafe lead
content. With industrial engineers managing the efficiency
process of a manufacturing plant, the quality would be the
highest possible for the company. The quality of these
goods produced in the United States would be so much
greater due to the better choice of labor.
Offshoring
The most cost effective route for a manufacturing firm to
take is in a process called offshoring [5]. This process
involves an American company building a factory overseas
for cheaper labor [5]. This is the root of the problem.
Everyone wants to save money, but so many manufacturers
are using offshoring that America as a whole is suffering.
Because of this, all the positions for a manufacturer are
being created in another country rather than the United
States. The job market continues to worsen because of
offshoring, which leads to fewer workers making a better
product.
Unemployment
In the fall of 2008, the United States economy began a
seemingly endless recession. The job market was very
Melissa Morello
competitive, but with very few jobs available, many
Americans were forced to live without employment. If there
were more job openings, this problem could have been
solved immediately. With an unemployment rate continuing
to increase [6], more positions need to be created. If more
manufacturers opened industrial production plants in the
United States, thousands of jobs would be created.
Industrial engineering positions are included in this addition
to improve the efficiency processes in manufacturing. With
more engineers working on-site at production plants in the
United States, a better product would be made. This would
significantly increase the overall quality of the product being
manufactured.
decreasing and increasing, more companies need to build
production plants in the United States to ensure that the
industrial production rates will continually rise. If this
percentage could gradually rise and never fall, more
opportunities to make a better product due to more engineers
working at a plant will definitely occur.
Sustainability
If a manufacturer built five production plants in his state
of residence, he would be able to constantly be aware of how
those plants were doing. If he chose to build his plants in a
foreign country, he would not be able to oversee the plants’
production directly. If a manufacturer is knowledgeable
about his plants, then that company will be much more
successful [1]. Production plants overseas would have
individual managers reporting to the manufacturer, and
could easily lie about the production. If the manufacturer
could eliminate the suspicious behavior, then he should
choose to do so. When production plants are built in the
United States, the company has a better opportunity to be
successful and more sustainable. With a more sustainable
company, there would be almost no possibility of an
engineer violating any code of ethics due to an unsafe
product. With more sustainable companies in the United
States, the highest quality of a product will be available to
the general public.
Industry and Manufacturing
In 1950, the United States’ ratio of services related
industries to manufacturing was 40:60 [5]. Fifty years later,
that ratio was shifted to 80:20 [5]. This is a very drastic
change for only fifty years. This statistic alone demonstrates
that America’s manufacturing dominance has greatly
decreased.
Along with these ratios, the change in
manufacturing jobs between 1998 and 2008 was a -22% [6].
This disappointing change left the United States ranked 168
out of 182 nations in the Industrial Production Growth Rate
[5]. These jobs include careers like a plant worker,
managers, and industrial engineers. All of these statistics are
very frustrating for the American worker because thousands
of jobs are being lost every year because of a lack of
domestic manufacturing.
The more American
manufacturing jobs available, the more opportunities there
are to make a better product.
US Ex-Im
A United States senator, Dianne Feinstein, recognized
that the decreasing number of American manufacturers was
startling. She created the initiative Export-Import Bank of
the United States (US Ex-Im) [8]. This process would
involve the United States government to lend over $20
billion to American manufacturers with competition to
foreign companies [8]. Feinstein says, “Manufacturing is a
proven source of well-paying jobs for those of all
educational levels and we must have a thriving
manufacturing sector in order to address our chronic trade
imbalance and return our economy to sustainable growth”
[8]. This stimulation from the United States government is
an idea that must continue to create jobs for this country that
will, in addition, provide better labor for a better quality of
the product.
ARE THERE SOLUTIONS?
No matter how bad this situation may seem, there are
definitely solutions for this significant problem. Whether it
be from the United States government or from a local
company, this problem can be corrected.
Onshoring
Cost is the deciding factor when it comes to
manufacturers choosing a location of a production plant.
The location that costs the company the least amount of
money will be the winner. Offshoring is the largest
contribution to this problem by far. In order to decrease the
amount of offshoring, this country needs to use onshoring
[5]. This is the process of producing goods in the same
country as the company’s headquarters [5]. In May of 2011,
industrial production in the United States was up 0.1% than
that of the previous year [6]. This may seem like a good
sign, but production then fell 0.2% a few months later in
November [7].
With the industrial production rates
Ethics of Domestic Manufacturing
The engineering codes of ethics directly relate to this
situation regarding industrial engineers working in
manufacturing plants in the United States. The National
Society of Professional Engineers code of ethics definitely
applies to domestic manufacturing. The first canon is “Hold
paramount the safety, health, and welfare of the public” and
the second canon is “Perform services only in areas of their
competence” [9]. The first canon relates to domestic
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Melissa Morello
manufacturing because industrial engineers need to oversee
the production process. If any material is miscounted or
something unsafe is in a product, the engineer is responsible.
Just like in the Mattel recalls in 2007, millions of toys were
recalled because of high lead content [3], engineers are
responsible for ensuring that all products are safe for anyone
who buys them. If any engineer is associated with
approving products that are not suitable for the public, that
engineer’s reputation is ruined. The second canon shows
that industrial engineers should not be designing the product
or determining which materials to make the product with.
An industrial engineer does not have the education to make
those decisions. The ethics of domestic manufacturing
directly relates to industrial engineering because they have a
responsibility to oversee production to ensure safe and
reliable products for the public who purchases them.
amount of supervision and authority that comes with being
in the same country. With more supervision, all employees
will produce a better product. Of those jobs being lost,
industrial engineering positions are included as well. With
industrial engineers managing the efficiency aspect of the
manufacturing process, companies would be maximizing
their profit with fewer resources. This would lead to a
company being more stable because of it being domestic and
with industrial engineers making it more efficient. The
company would also be more sustainable due to the
improved quality of the product. With a better product,
comes more consumers willing to purchase it. This, in the
end, leads to a stable company that will greatly prosper.
There needs to be more manufacturers building production
plants in the United States to increase the number of jobs in
the country, and consequently, the economy will greatly
prosper. I strongly believe that there needs to be more
production plants in the United States to eliminate
offshoring. I also believe that with proper education for
freshman engineers, students can be exposed to this problem
and be fully aware of the consequences of violating the
codes of ethics of professional engineers because of
offshoring in production plants overseas before they start to
attain real working experience.
Education of the Problem
So why is domestic manufacturing important to a
freshman engineering student? As a freshman engineer, most
students do not have any idea why engineering issues are
important. I believe it is very important for freshman
engineers to be exposed to global problems involving
engineers, especially if it relates to their intended field.
Freshman engineering students do not even think about the
possibility of affecting a business in engineering, but
engineering is so common in a business setting [10].
Freshman engineers need to be exposed to how the quality
of a product is affected by offshoring. If an engineer is not
exposed to offshoring, they could easily become involved in
a recall scandal like Mattel, their reputation could be
permanently tarnished. I am very glad this assignment was
given to me as a freshman engineer, because it opened my
eyes, as a future industrial engineer, as to how offshoring
greatly affects the manufacturing process of almost every
company. As I look for internship opportunities in the near
future, I need to be aware of the manufacturing process of
each company and how it can impact me. If I work for a
company that chooses a poor quality versus less expensive
labor, I could become part of a potential scandal like Mattel.
References
[1] (2011). “Domestic powers proposed for US Ex-Im.”
Trade
Finance.
(Online
article).
http://go.galegroup.com/ps/i.do?id=GALE%7CA270250821
&v=2.1&u=upitt_main&it=r&p=ITOF&sw=w.
[2] A. Naghavi and G. Ottaviano (2009). “Offshoring and
product innovation.” Economic Theory. (Online article).
http://www.springerlink.com/content/p26546555g2g036v/fu
lltext.pdf. pg. 518
[3]Y. Choi and Y. Lin (2009). “Consumer response to crisis:
Exploring the concept of involvement in Mattel product
recalls.” Public Relations Review. (Online article).
http://www.sciencedirect.com/science/article/pii/S03638111
08001252. Pg. 1-5
[4]Institute of Industrial Engineers. “Engineering Codes of
Ethics.” Institute of Industrial Engineers. (Online article).
http://www.iienet2.org/Details.aspx?id=299. Pg. 1
[5] (2011). “United States.” Economic Outlook. (Online
article). http://onlinelibrary.wiley.com/doi/10.1111/j.14680319.2011.00860.x/abstract. p. 48-49
[6] (2012). “USA finance: Domestic manufacturing tax
deduction remains at 9%.” Economist Intelligence Unit:
Country
ViewsWire.
(Online
article).
http://go.galegroup.com/ps/i.do?id=GALE%7CA300977199
&v=2.1&u=upitt_main&it=r&p=ITOF&sw=w.
CONCLUSION: WHY IT MATTERS
Americans have always been proud to make goods in
their own country. Because of labor costs and offshoring,
there are significantly less manufacturing plants in the
United States. This is a problem because with the high
unemployment rate, more jobs need to be created to
stimulate the current state of the economy. With more
production plants being built in foreign countries, more and
more jobs are being lost in the United States. With this
factor alone, the state of the economy in the United States is
suffering.
Adding to that, the sustainability of
manufacturers is rapidly decreasing due to the diminishing
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Melissa Morello
[7] Williams, S.. (2010). “Does America need
manufacturing?”CircuiTree.
(Online
article).
http://go.galegroup.com/ps/i.do?id=GALE%7CA227375858
&v=2.1&u=upitt_main&it=r&p=ITOF&sw=w. p. 31
[8] (2012). “United States.” Economic Outlook. (Online
article). http://onlinelibrary.wiley.com/doi/10.1111/j.14680319.2012.00889.x/citedby. p. 45-46
[9] National Society of Professional Engineers. (2007).
“NSPE Code of Ethics for Engineers.” NSPE. (Online
article).
http://www.nspe.org/Ethics/CodeofEthics/index.html. pg. 1.
[10] Reid, K.J. (2010). “Work in progress-Measuring and
enhancing the entrepreneurship mindset of freshman
engineering students.” Frontiers in Education Conference.
(Online
article).
http://ieeexplore.ieee.org/xpls/abs_all.jsp?arnumber=567324
7. Pg. 1.
Acknowledgements
Thank you to my dad for helping me choose a topic
relating to industrial engineering. Thank you to the Writing
Center and Tamar for helping me organize my assignment
and helping me connect all of my sections. Thank you to all
the Writing Center staff for emailing changes about
formatting
and
instructions
for
submission.
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ENGR 0011 Dr. Vidic, 2:00 PM
Group R10
University of Pittsburgh, Swanson School of Engineering
October 30th, 2012
1