Made in America: Still on Top of the Manufacturing Game

The conventional wisdom is that the United States no longer produces much. The notion that globalization has dealt a fatal blow to the U.S. manufacturing sector is a widespread one. It has become common to hear people declare that "everything is made in China!" Not only do most believe the United States is no longer the manufacturing giant it once was, but they also think it has fallen behind emerging countries that are set to usurp the United States' once-secure lead.

The impression that the United States is no longer on top of the global manufacturing game is reasserted over and over by our day-to-day shopping experiences. Clothes, electronics, toys, and household goods are likely to be made outside the country, and yes, probably in China. We can't be blamed for thinking the United States no longer produces anything useful. However, our daily experience tells us only one side of the story. After all, most of us are never in the market for a communication satellite or an aircraft carrier, big ticket items that are very likely to be made in America. The United States may not be making many of our $20 toys, but it's certainly manufacturing our planes.

Regardless of what the prevailing perceptions are, the simple truth is that the United States hasn't lost its lead as the manufacturing power. It's still the world's No.1 producer. Japan comes in second ahead of China, which takes a precarious third place. To top it off, brand U.S.A. continues to get high marks. U.S. products are thought of as safe and reliable in much of the world, something China can by no means claim.

Truth in numbers

The United States makes some $5 trillion worth of goods and the manufacturing sector still employs 13 million people across the country, according to National Public Radio. The country has less than five percent of the world's population but actually manufactures 20 percent of the world's goods. These numbers are impressive by any standard.

U.S. manufacturers sell their products all over the world. In 2007 alone, the United States rang up more than $200 billion in sales of aircraft and other high tech goods, and $80 billion in cars and parts, according to the Associated Press. Just one heavy machinery company, Deere & Co., recorded $16.5 billion in sales of farming equipment. The United States produces two and half times more than China in dollar value.

The role of small and medium-sized companies

Those who work for small and medium-sized firms may be wondering where they fit into this manufacturing picture. In 2007, some 266,457 U.S. companies exported merchandise, according to the U.S. Department of Commerce. A staggering 97 percent of these companies were small and medium-sized enterprises (SMEs). That is, 259,381 SMEs in total, more than doubling from the 108,026 that were exported in 1992. Among these companies, 29 percent (75,220) were manufacturing firms.

Looking ahead

Much has been said about the challenges small and medium-sized U.S. companies face from global competition. It's easy to overlook some of the advantages being smaller may confer. Well-run, forward-looking SMEs can react better to the markets by repositioning themselves to ride new trends much faster than big, bureaucratic companies. They can also customize their services to a greater extent to fit individual customers. In addition, they can expand into small niche markets that are often ignored by multinationals.

That said, to ensure long-term existence and to remain competitive, all U.S. manufacturing companies, especially small and medium-sized, need to raise their productivity, continue to innovate, and improve their products. To do this, SMEs must maintain a well-trained workforce, keep channels for customer feedback open, and foster an environment where collaboration with customers can thrive.

It's easy to become comfortable when orders are rolling in. It pays to always remember that the manufacturing world isn't static. The survival of small and medium-sized firms depends on their ability to stay abreast of emerging trends in the marketplace and then take quick, well thought out actions accordingly. In other words, it pays to be ready to pounce.

This article was provided by AllBusiness.com, which provides resources to help small and growing businesses start, manage, finance and expand their business.

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