The Spanish retailer Zara doesn’t need the expensive inventories that burden competitors like The Gap. Zara operates its own Internet based worldwide distribution network, linked to the checkout registers at its stores around the world. This lets it continuously monitor store sales. When its headquarters in Spain sees a garment “flying” out of a store, Zara’s computerized manufacturing system swings into action. It dyes the required fabric, cuts and manufactures the item, and speeds it to that store within days.
Like Zara, few people or businesses do business today like they did even three or four years ago. We use PDAs to communicate with the office, and plan trips, manage money, and custom build and order new computers online. Companies use virtual online communities to improve efficiency. For example, to win a $300 million navy ship deal, Lockheed – Martin established a virtual design environment with about 200 global suppliers, via a private internet existing entirely outside the firewalls of the individual companies.
Indian Railways, the largest railway systems on the world, has provided computerized ticket booking facility to passengers who can choose tickets on any train departing from any railway station in India. Similarly, Air Deccan (now Kingfisher Red) was a pioneer in low cost air travel in India and popularized e-ticketing through the Internet, which reduced costs and made airline ticket easier for passenger in India.
Trends in the Nature of Work:
One implication is that technology has also had a huge impact on how people work, and on the skills and training today’s workers need.
High Tech Jobs:
For example, skilled machinist Chad Toulouse illustrates the modern blue collar worker. After an 18 week training course, their former college student now works as a team leader in a plant where about 40% of the machines are automated. In older plants, machinists would manually control machines that cut chunks of metal into things like engine parts. Today, Chad and his team spend much of their time typing commands into computerized machines that create precision parts for products including water pumps. Like other modern machinists, he earns about $ 45,000 per year (including overtime). As the US government’s Occupational Outlook Quarterly put it, knowledge intensive high tech manufacturing in such industries as aerospace, computers, telecommunications, home electronics, pharmaceuticals, and medical instruments are replacing factory jobs in steel, auto, rubber, and textiles.
Technology is not the only trend driving the change from “brawn to brains” Today over two thirds of the US workforce is employed in producing and delivering services, not products. Between 2004 and 2014, almost all the 19 million new jobs added in the US will be in services, not in goods producing industries.
Several things account for this. With global competition, more manufacturing jobs are shifting to low wage countries. For example, Levi Strauss, one of the last major clothing manufacturers in the United States, closed the last of its American plants a few years ago. There has also been a dramatic increase in productivity that lets manufacturers produce more with fewer workers. Just in time manufacturing techniques link daily manufacturing schedules more precisely to customer demand, thus squeezing waste out of the system and reducing inventory needs. As manufacturers integrate Internet based customer ordering with just in time manufacturing systems, scheduling becomes even more precise. More manufacturers are partnering with their suppliers to create integrated supply chains. For example, when a customer orders a Dell computer, the same Internet message that informs Dell’s assembly line to produce the order also signals the video screen and keyboard manufacturers to prepare for UPS to pick their parts at a particular time. The net effect is that manufacturers have been squeezing slack and inefficiencies out of the entire production system, allowing companies to produce more products with fewer employees. So, in America and much of Europe, manufacturing jobs are down, and service jobs up.