Loading

Alison's New App is now available on iOS and Android! Download Now

Study Reminders
Support
Text Version

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

So, continue with this, I will now venture into the technical side. We will start with the simplequestion what is manufacturing; how you define manufacturing? I have just taken the definitionwhich is given by CIRP that defines manufacturing is a series of interrelated activities and
operations involving the design, materials, selection, planning, manufacturing, production,quality assurance, management, and marketing.So, if you see this definition, it is highly encompassing. It covers more or less all functional areasof management; from the procurement to the marketing, and supply chain everything isintegrated into this definition. So, looking at this definition it means that we are actually talkingabout a very large spectrum of activities and just to give you a flavour of how this word come.
The origin is a Latin word. Manus is hand and Facio is to do. When we are talking aboutmanufacturing we are talking about the Latin origins. It is about doing something and maybedoing by hand but I think that is where the technology differs because more and more automationand digitization is coming and we will discuss as we go along. (Refer Slide Time: 06:06)
So, with this simple definition, the definition part is over. Then the question here is, what is idealmanufacturing or put it that way is what actually you what you should get out of manufacturing,what are the goals of manufacturing? If you look at this particular slide, the slide is from a veryfamous science fiction serial Star Trek The Next Generation.
Some of you might have seen it. When I was a kid, I think it used to be telecasted in DD. This isCaptain Picard, one of the actors in that serial, and very often he used to use this particular thing,Tea, Earl Grey Hot and as soon as he says this within some seconds, the tea will actually come in
it will be Earl Grey, it will be hot. The spaceship, in which they are actually have shorted thewhole thing was the centre praise and this machine is the replicator.
The back end part of the replicator at least what is revealed in this whole science fiction thing isthat it actually can self assemble items into food and drink. So, if I am looking for an idealmanufacturing scenario, the machine actually can convert anything to everything. So, as soon asI start thinking about something the machine has the capability to convert any raw material towhatever I am looking for.So, if you think of maybe Aladdin's lamp whatever you wish for will be immediately provided.So, can we actually have a manufacturing system of the term? Is it possible to think of that?(Refer Slide Time: 08:23)
So, coming out of science fiction is it possible to actually have those things in reality. Thescience historian James book has a very interesting condition that something is going to happenin the next 40 years, that will change things probably more than anything else since we left thecaves and I think his context was talking about manufacturing when we look at it. This is somekind of a blog, The title is how a machine that can make anything would change everything.
The machine which may resemble the enterprise replicator may be going to come in the futureand that is nanofabricators. So, you may actually see advances in technology to such an extentthat the atoms can be reconfigured into different kinds of products. So, that is actually too far
into the future, we may not be covering that dimension of manufacturing in this course, but let ussee how far we actually can go closer to this.
So, suddenly as of now, we do not have the technology of nanofabrication. We do not have thetechnology that maybe there in the replicator. But let us see how far we actually can go close toit. So, whether we actually can be too far from that. So, let us see, that how far we actually cango closer to this. (Refer Slide Time: 10:00)
I asked you , what should be there in manufacturing, what are the goals of manufacturing, whatis the ideal manufacturing system. If you just look at the previous examples the 4 things, whichcame out very explicitly. It should be fast, cheap or economical and it should be better. In fact,we should look for best for time being let us confined to better.
It means that we are looking for good quality and it should be diverse. So, if instead of CaptainPicard someone else comes and say that I want some other type of tea, or why tea it could beanything else. So, replicators should have the capability or the technology to replicate to makesomething which is very diverse. But unfortunately, these goals are not in tandem with eachother.
These goals may be conflicting. So it is possible that you actually could have something which isfast, economical may be high quality, but may not be diverse. In fact, when we talk about a
typical mass production system, like Ford motors will discuss that in detail. It may be fast, it maybe economical. It may have reasonable quality it may not be the best, but it may not be diverse atall.
The Ford motors used to produce only one type of model the Model T at the peak of their massproduction system. So, these objectives, these goals may be conflicting and then again theimportant question is, is it possible for technology to bring these goals into sync with each other.There is a very famous quotation given by the economist, George Stigler he got the Nobel Prizein 1982 for a different field altogether.
But he has a very interesting paper which he published in 1939 and one of the very famousquotation came out of it is that flexibility is not free. So, it shows that these two goals mayconflict with each other. So, if I want high flexibility the things may not be economical and Ithink that is the idea, which comes in mass production systems where Henry Ford decided toforego flexibility in favour of the cost.
So, will keep on talking about these things, at least in the first part of the course. Our objectiveis to see how we actually can bring these goals into sync with each other. (Refer Slide Time:13:21)
Based on this simple background I will go into some data, we try to look into the macro pictureof where the manufacturing is contributing. So, this particular slide if you see it talks about theworld GDP. In the last 2000 years, and everything has been adjusted to some people who haveseen how the GDP is normalized, so everything has been into international dollars in 2011prices.So, if you see that for the initial maybe till 1600 years or 1500 years there is some kind of thewolrd GDP was more or less constant. So, there is not much difference, but post 1500 and aftermaybe 1600 there is a gradual increase and then there is a really big increase, maybe in the 20thcentury. Now, if you look at these numbers, one thing which comes significantly, that theadvances in technology during the Industrial Revolution has significantly impacted theproductivity.Most of these advances were actually in the context of manufacturing. So, if I put indirectly, thatmanufacturing has changed the way we live. I am just adding something from my side fromeconomics. So, we call it the great divergence and great convergence. So, when I say, greatdivergence, it means that the impact of industrial revolution was not constant across the globe.Some countries have advanced significantly compared to those other countries. If you talk aboutsome of the European countries like UK, France, like America ( U.S.). These countries havesignificantly gained because of the impact of industrial revolution. We see great divergence, butof post second world war, you can see Japan , start matching the American productivity evenovertaken the term.In the 80s we are talking about emerging economies like China, India, Brazil, and then we aretalking about the great convergence. So, is it possible for some of these countries the emergingeconomies to leverage manufacturing and start matching what has been observed in the advancedeconomies? So, these may be more macro side. I will show you some more data on macro. So,this sources, our word in data. org.(Refer Slide Time: 16:49)
This is taken from our trading economics.com and this is actually from the data, originally fromminister of statistics and program implementation government of India and these are in Indianrupees in billions. We are talking about 6000 Indian rupees in billions. So, that is the kind ofoutput, which we see as the contribution of manufacturing in the Indian GDP.(Refer Slide Time: 18:02)
Now I look at similar data for the US economy and the contribution of manufacturing is morethan 2 trillion dollars. This data is maybe the first quarter of 2020. So, if you look at the Indiansize of the Indian economy which is about 2.7 or 2.8 trillion dollars. So, US manufacturing itselfis touching that number. So, when he talked about the great divergence that is something I waslooking at.
So, whether it is possible for Indian manufacturing by using whatever technology to start hittingthe numbers like 2.2 or 2.3 and then we actually can achieve the dream target of 5 trillion dollars.So, if I just start multiplying all these numbers that is something which we can easily achieve.When we can do that, I think that is a different question altogether.
Now, another thing which has been observed in the association of manufacturing technology.They have estimated in U.S. 1 million if you sell dollar 1 million sales of manufacturing goods inthe U.S., it normally supports 8 jobs in manufacturing and 6 jobs in the supported domains. So, itmeans that 1 million dollar sales will support about 14 jobs, and what they have estimated thatnone of the other sectors even come closer to it.
So, this becomes really relevant, that the countries, actually should emphasize on growth throughmanufacturing and one more thing which I think you can easily look at these numbers when Italk about the great divergence that a large number of these countries who are usingmanufacturing as the engine of growth, they actually were producing the machines which alsomake machines. So their differentiation was very high. Therefore, you cannot easily replicatewhat they were actually doing.(Refer Slide Time: 19:58)
These questions are actually significant. When we talk about manufacturing and this data is 2018data. It actually tells you how each country is actually contributing to the global manufacturing.
China may be about a quarter or more than a quarter of the global manufacturing and forhistorical reason, let me just put that at the beginning of the industrial revolution China wascontributing about 33% of the global manufacturing and India was contributing about 25%.
China still is closer to that number, but India has come down drastically. So, from 25% they arenow at about 3% and you look at the countries which I was talking about in great divergencelook at U.S., Japan, Germany, Italy, France, and the UK. Most of the countries that actually haveleveraged the industrial revolution well; they are actually part of the top 10 list.
China in fact has significantly gained a lot of outsourcing. When we talk about supply chains, alot of cost arbitrage is involved. The U.S. traditionally is a high manufacturing country, but itsglobal contribution is about 16%. Therefore, this data I think will give you an idea that, whetherit is possible for India to start hitting these numbers and whether the technology will allow us todo that. This gives you the macro picture. Now I will continue my discussion by talking aboutthe background of the future. (Refer Slide Time: 22:07)
I will start building the manufacturing paradigms; Manufacturing in the pre-industrial revolution.My story will start with a very interesting poem by Kipling, in fact, Kipling is known more forThe Jungle Book. You might have seen that character of Mowgli. So, if you just look at thisparticular poem by Kipling it says gold is the mistress, silver for the made, copper for thecraftsmen but the last line is significant, that cold iron is the master of them all and in fact, iron
comes as at the centre of all this, manufacturing revolution, maybe iron and steel. I think now westart building the case, how these advances and maybe iron refining industrial manufacturing hasactually brought those thoughts of, which actually takes us to the goals of manufacturing.
So, now I will start building the case. A lot of you would have heard about a simple process ofsmelting. I think in our high school books we talk about smelting. It is a reduction process tomake iron from iron oxide, but traditionally this process maybe I go to 5000 years back. Thisprocess even existed at that time, but it was not used to make iron, it was actually used to makecopper and zinc.
So this process continued for copper and zinc and then there was some modification which wasactually done in about 1200 BC, where this process was actually modified in fact themodification came so in terms of keeping the furnace sufficiently hot so that you actually can usea smelting to make iron and then what actually happened. So, the cost of iron refining issubstantially reduced.
Because of this, I can now call the contribution of technology. So, let my technology be smeltingand that actually is significantly reduced the cost of iron refining during that time. This is all thestatistical data. I have taken it from a source where all these numbers have been normalized. Thisled to a decrease in prices of Iron by 97%. Steel was also discovered around the same time.
So, this process was in Mesopotamia which will be closer to modern Iraq. Steel was alsodiscovered around the same time. You can get different kinds of steel but you when we talkabout steel we are talking about as an alloy. So, the Chinese were a pioneer in that and they werein fact using the blast furnaces.
If you go to a modern steel plant we still talk about blast furnaces to make steel. They are still the
pioneers. China is the largest producer of steel about 800 million tons. India is the second-highest, but India is about 10% of that number and the Chinese were using these blast furnaces to
make a steel way back about more than 2000 years ago.
So, what it actually signifies because when I talk about blast furnace. I am talking about a batchprocess. We will discuss those things as we go deeper into that. These blast furnaces arenormally large in scale; it means that the Chinese got some idea that if you scale the productionup the cost would actually come down. So, we are actually not talking about the economies ofscale, which we formally will see as we go more into the goals.
But for time being just believe me that the Chinese were using the blast furnaces. They actuallyhave some idea about how the scale and the costs are actually related and I think they are makingthe best steel till the advent of the industrial revolution. So, for time being we stop here. So, wewill continue our discussion on manufacturing in the pre-industrial revolution and we are goingto see different manufacturing paradigms, as well as different kinds of manufacturing processesand how these processes, these manufacturing paradigms are actually linked to those four initialgoals. So, I will continue this in the next session. Thank you.