Abstract
This paper examines supply chain value added in the US for producing assembly-centric products, which includes machinery, computers, electronics, and transportation equipment, and determines whether costs are disproportionally distributed. The implication being that reductions in resource consumption in some cost areas can disproportionally reduce total resource consumption. Efforts to develop and disseminate innovative solutions to improve efficiency can, therefore, be targeted to these high cost areas, resulting in larger efficiency improvements than might otherwise be achieved. An input–output model is used for this examination and is combined with labor data and data on assets. The top 20 industries, occupations, and industry occupation combinations contributing to production are identified. A sensitivity analysis is conducted on the model using Monte Carlo simulation. The results confirm that costs are disproportionally distributed, having a Gini coefficient of 0.75 for value added and for compensation it is 0.86. Wholesale trade, aircraft manufacturing, and the management of companies and enterprises were the industries with the largest contribution to assembly-centric manufacturing, even when including imports. Energy in the form of electricity and natural gas were discussed separately, but would rank 8th if compared to the industry rankings. In terms of occupation activities, team assemblers, general and operations managers, and sales representatives were the largest occupations. Public entities might use this model and results to identify efficiency improvement efforts that will have the largest impact on industry per dollar of expenditure.
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Notes
Calculated using Input–Output analysis of the BEA Benchmark data.
It is important to note that the capital purchases and the goods and services used up in production cannot be added together as it would be double counting some values.
The steel and aluminum industry often produce standard shapes rather than customized shapes tailored to specific products. This results in needing to cut away some portion of material, which ends up as scrap.
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Disclaimer: Certain trade names and company products are mentioned in the text in order to adequately specify the technical procedures and equipment used. In no case does such identification imply recommendation or endorsement by the National Institute of Standards and Technology, nor does it imply that the products are necessarily the best available for the purpose.
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Thomas, D., Kandaswamy, A. Identifying high resource consumption areas of assembly-centric manufacturing in the United States. J Technol Transf 44, 264–311 (2019). https://doi.org/10.1007/s10961-017-9577-9
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DOI: https://doi.org/10.1007/s10961-017-9577-9