A Trend Toward Small Production Facilities

Date: 2015-10-07; view: 715.

Case

1. Work in small groups of three or four students. Study and discuss the case paying special attention to the questions below it.

2. Choose a spokesperson in the group to make a presentation to the whole class, summarising the opinions in the group and sharing your decisions of the issues with others.

3. Hold a Questions & Answers (Q&A) session.

In 1973, a book was written by E.F. Schumacher entitled Small Is Beautiful. In this book, Schumacher insisted that smaller production facilities were becoming more popular and were more efficiently run than larger production facilities. According to Schumacher, “while many theoreticians are still engaged in the idolatry of large size, with practical people in the actual word there is a tremendous longing and striving to profit from the convenience, humanity, and management of smallness.”

When Small Is Beautiful first appeared, it was mainly seen as an attack on big business. Basically, the book challenged the commonly held belief that bigger is better. Today, however, there is a growing number of business people who seem to be agreeing with Schumacher. They agree that “The big is coming out of manufacturing because a lot of business have discovered that small is beautiful” – easier to manage successfully.

Examples of companies moving toward smaller manufacturing facilities are easily obtained. For example, one pharmaceutical consumer-goods giant increased manufacturing efficiently by dividing its large plant into four smaller groups. An electric's aircraft engine group shifted its production from two large manufacturing complexes to eight smaller satellite centers. As another example, a large manufacturing company has been shutting large assembly lines, over the last few years, in favour of smaller, automated facilities making specialised products.

Naturally, small plants are not for everyone. Some industries, like aircraft manufacturing, will always require very large manufacturing facilities. In a growing number of industries, however, smallness may be advantageous. Partly because of the difficulty in running large plants in some developed countries, manufacturing productivity growth fell drastically to. Perhaps reducing manufacturing facility size is one way to turn this trend around.

Issues for Discussion:

1. Is coordinating production easier for managers in large manufacturing facilities or in small manufacturing facilities? Explain in detail.

2. Is controlling production easier for managers in large manufacturing facilities or in small manufacturing facilities? Explain in detail.

3. List as many reasons as possible supporting management's continued use of large manufacturing facilities as opposed to small facilities.