Reading: Why Manufacturing Matters

1. Since the U.S. economy is becoming more service based, the percentage of employment in
manufacturing is declining while the percentage of employment in service industry is increasing.
An agile manufacturer is able to switch quickly and economically from one product to another
with very little disruption.
2. Yes, the business leaders and the government officials should be concerned about declining
percentage of manufacturing jobs because of a variety of reasons including the following:
a

Manufacturing provides 70% of the U.S. exports.

The average compensation for a worker from manufacturing industry is 20% greater than the
average of all workers in the U.S.

Compared to service industry employees, the manufacturing employees are more likely to
have a better benefits package.

Productivity growth in manufacturing is much higher than productivity growth in the U.S.
economys overall productivity growth.

Even though manufacturing employment accounts for a smaller portion of the employment
for U.S. than the service industry, the manufacturing accounts for more than 50% of the
Research and Development in the United States.

The cookie production process is called a batch processing system, in which

company uses two continuous band ovens, to bake the cookies. Manufacturers, of
anything from cakes to computer chips, have numerous ways of
organizingproduction, and one of these methods is called batch production or batch
processing system, in which, instead of manufacturing things singly, or by
continuous production, items are manufactured in batches. A specific process for
each item takes place at the same time on a batch of items, and that batch does
not move onto the next stage of production or inspection until the whole batch is
done (www.wisegeek.com). According to the text; batch processing is used when a
moderate value of goods or services is desired and it can handle a moderate variety
of products and services (Stevenson, 2009, p. 239). The batch processing
technique includes mixing, cutting and baking, for non filled cookies, but filled
cookies, requires an additional step for filling, and folding. As soon as management
receives orders from distributors, production is scheduled, and process of making
cookies begins. Every day, list of the cookies to be made is given at the start of the
shift, to the person in charge of mixing, who checks the master list, indicating the
ingredients needed for each type of cookie, and enters that information into the
computer. The computer determines the amount of each ingredient needed,
according to the quantity of cookies ordered. The ingredients are automatically sent
to giant mixing machines, where they
Home-style Cookies
3are mixed with proper amounts of eggs, water, and
flavorings. Properly mixed ingredients arepoured into a cutting machine, where it is
cut diagonally into individual cookies. The cookies are cut diagonally rather than

straight because this strategy requires less space, which in turn result is a higher
level of productivity. Once they are cut they are dropped onto a conveyor belt, and
transported to one of two ovens, for baking. Baked cookies that emerge from the
ovens are fed onto spiral cooling racks. As the cookies come off the cooling racks,
workers place them manually into boxes, taking care to remove any broken or
deformed cookies in theprocess. The boxes are then wrapped, sealed, and labeled
automatically (Stevenson, 2009).Measures to increase productivity, and faster
output rate:According to Mankiw (1998, p.11), Productivity is defined as the
quantity of goods and services produced from each hour of a worker's time.
Productivity is an overall measure of the ability to produce a good or service, more
specifically, productivity is the measure of howspecified resources are managed to
accomplish timely objectives as stated in terms of quantity and quality, thus
productivity may also be defined as an index that measures output (goods and
services) relative to the input (labor, materials, energy, etc.), used to produce the
output (www.enotes.com). Home-style cookie has adopted two ways, to become
more efficient in increasing productivity: 1) to cut the cookies diagonally, rather
than round; and 2) increase in the length of each oven by 25 feet. The diagonal-cut
cookies require less space, as they are able to fit more in the oven at one time,
resulting in higher level of productivity. Increase in the length of oven helps the
company to produce more cookies at a time, and thus results in a faster output rate,
and increased productivity.Decision for not automating the packing as an obligation
to community, and employees:
Home-style Cookies
4I think that the company is making the right decision, by
employing 30 women to do the boxes manually, and not automating the packing of
cookies. Although automating the packing process might save some money, and
increase efficiency, but owners have resisted making this change because they feel
an obligation to the community, to employ women for manual packing, as if their
labor costs are not high, thus company is showing loyalty to ones community, and
loyalty to their employees. In some respects, the company has a moral obligation
towards the community, to help employ some of its locals. By giving jobs to the
local people of the community, company is spending money to stimulate the local
economy, and ensures that the community prospers, which is one of their prime
obligations towards community. As an obligation to its employees, company is
telling indirectly to the employees that they appreciate their services, and value
their work. This makes the company look good in the community, by showing that it
has a diverse workforce, as well as they are giving back to the community, and
obligating it. In some respects, the company is obligating the community by
employing locals, in the same way as GM, and Ford, employs residents of the local
towns. Also, women workers on the line are responsible for removing defective
cookies, which can be used in the oatmeal cookies, which in turn reduce the cost of
ingredients, and save on waste disposal costs, which is an additional obligation to
the community.The Baking Company is located in a small town, and employs fewer
than 200 local people, soI do believe that size of the town is a factor in not

automating the packing of cookies, becauseif the company were located in a large
city, than the company might decide to utilize the automated packaging system, as
the company may not feel as much a part of the community, and would probably
not feel obligated to hire local women to prosper the community. Secondly in large
city, they may not feel the closeness that they feel in small towns, and also
Home-style Cookies
5may not feel morally obligated towards the upliftment of
the community, and therefore may not feel as obligated to their community and
employees. This is most likely to be a truth for a small town, having a specific type
of industry, where local town people can work. In large city, the company would be
packaging cookies for a much larger population, so they might deem it better to do
automated packaging, for the sake of production rate, and cutting cost. I believe
that size of company is a factor, because a small business might be more reluctant
toutilize automated packaging, whereas larger company might deem it necessary to
utilize automated packaging, in order to keep up with their costs, and productivity.
Large companiesmight produce millions of cookies a day; hence it would not be
prudent for them to hire more local women or men to have manual packing of
cookies. Also small companies do not have the same influence in larger cities.
Benefits to carry minimal amounts of inventories:The companys inventory
management is impeccable. The factors that cause the company to carry minimal
amounts of certain inventories are the fact that the cookies have a short shelf life,
due to the fact that nothing added to preserve its shelf life. Due to this fact, cookies
are produced as ordered by distributors; for example, if there is a large amount of
cookies ordered, more products or inventories are ordered, and more cookies are
produced and vise versa. Since cookies are loaded on trucks immediately, the
product is not left hanging around in storage. Since cookies are perishable goods,
and if they are not consumed in a certain amount of time, they might lose their
freshness, and become unsellable, thus become a sunk cost for the company. The
company carries minimal amounts of certain inventories like individual cookie
boxes, shipping boxes, labels, and cellophane for wrapping. For example: Labels are
reordered frequently, in small batches, because FDA label requirements are subject
to change, and the
Home-style Cookies
6company does not want to get stuck with labels it can't
use, and thus increase its sunk cost (Stevenson, 2009).Their silos are also filled
every few weeks to make sure that ingredients may not get spoiled. The cookies are
also baked in sequence so they do not have to clean the machines every time a
different cookie is made. They also have minimal amounts of scrap. For example, if
a batch is mixed improperly, it is sold for dog food. Broken cookies are used in the
oatmeal cookies (Stevenson, 2009). The benefit of this policy is that the company is
not wasteful. While it holds true that there are no preservatives added to the
cookies, to reserve its shelf life, the company should not face the issue of cookies
going bad because they make cookies at the rate that they are ordered. This
eliminates or minimizes the chances of cookies going to waste, and the company

losing money.Secondly, this policy reduces the cost of ingredients, and saves on
waste disposal costs. As the company becomes more efficient at managing its
inventory, it will decrease the amount ofsunk costs it incurs, and will be able to
budget, and allocate its resources better, to further increase
productivity.Consumers consideration in judging the quality of cookies:As a
consumer the things that I consider in judging the quality of cookies that I buy at a
supermarket is taste, flavor, price, popularity, brand, availability, and ingredients. I
normally dont like to buy cookies that are low fat because in my opinion, they taste
nasty. I have had several bad experiences with low fat foods. Price helps in judging
the quality because in my experience those foods that are really cheap tend to taste
worse. Im a firm believer in the saying, you get what you pay for, therefore if you
pay a small amount for the food, the
Home-style Cookies
7quality is worse. While I believe this, I also try to stick to a
price that is reasonable. I definitely judge on taste, and flavor, when I try a product.
If the package says the cookie is soft and chewy, then I expect it to be soft and
chewy. I would want the cookie to be as fresh tasting as possible, and just be
accurate in its item description.