For many Americans, there is an idea that the economy is heavily supported by service sector. That includes office work, restaurants, hotels, marketing firms and other companies that don't produce anything tangible. While that has certainly been the case in recent years, there is a little bit of evidence that manufacturing is starting to recover. In addition, with many companies embracing technology like the Microsoft Dynamics NAV ERP system, there is enough of a case to make that manufacturing not only still matters, but is getting stronger and once again becoming a major force in the American economy.
Recovering from losses
Admittedly, one of the major reasons that manufacturing has dipped in its contributions to the economy is the shedding of jobs. According to the Wall Street Journal, more than six million jobs in the sector were lost between 1998 and 2010. This was in large part due to foreign countries having lower costs for production overall, especially China. However, since 2010, the dynamic has shifted, with the benefits of working in these countries declining greatly combined with increases in shipping. As a consequence, the industry recovered seven percent of its workforce by the end of 2014, numbering 12.2 million people. While it's a far cry from 17.5 million in 1998, this result is still promising.
More importantly, output is growing substantially. For example, Congressional newspaper The Hill noted that in 2014, manufacturing contributions to the American economy increased to more than $2 trillion, equaling an eighth of the total gross domestic product. More importantly, every dollar of sales from a manufacturer contributes $1.37 of output elsewhere in the economy.
In addition, one of the more important benefits of keeping manufacturing strong is that it improves the economic standing of the U.S. By producing more goods, the country can export more and rely less on imports, making it more self-sufficient. That will allow it to whether future economic crises.
What will greatly help manufacturing companies do more is better ERP software. With new mechanisms such as automatic data capture, mobile WMS and other features, factories and shops can benefit from the latest developments in Microsoft Dynamics NAV. By upgrading to new cloud-based systems, these businesses can become more flexible in how they operate, switching from made-to-stock to made to order without losing revenue overall. Such software will make them competitive in the future, both in the long and short terms, and contribute greatly to the American economy.
To discuss Microsoft NAV solutions for manufacturing, join the Microsoft Dynamics NAV for Manufacturing LinkedIn group.