Factors that influence change within the Engineering Industry

Factors that influence change within the Engineering Industry

Market forces • The process of supply and demand that shapes a market economy. • The term demand refers to the quantity of a given product that consumers will be willing and able to buy at a given price. • The term supply refers to the quantity of a particular product that suppliers (producers and/or sellers) will make available to the market at a particular price.

Market forces The demand for a product will be influenced by several factors: What do you think they are? • Price • Income levels • Consumer tastes and preferences • Competition • Fashions

The Global Marketplace • Global business, that is, business activities between individuals, companies and governments different countries, has existed for centuries. • Globalisation is a much newer concept. Globalisation implies an integration of world economies. It includes a rapid increase in the movement of goods, services and capital across national borders. Increasingly businesses see the world as a single market.

The Global Marketplace How do you think globalisation affects the engineering industry? • Jobs – gain jobs if you can produce goods at cheaper prices lose jobs if your goods are to expensive. • Larger marketplace to sell goods. • Increased competition. • Increased efficiency.

Advances in technology One of the most significant factors affecting how businesses have operated in the twentieth century has been the impact of new technology. Examples: Communication now happens very quickly due to advances in technology. Information can be passed between departments, between businesses and their customers. This process can be conducted via fax, telephone, email and internet.

Advances in technology Finance: Budgetary Control - Once budgets have been set, the finance department can easily compare current expenditure levels with original budgets using spreadsheets. Forecasting and Planning – Large amounts of data can be held on a computer, to make forecasting easier. Location: Many businesses are now able to locate in cheaper areas because they can use technology to communicate with customers. For example, call centre staff can bring up a customer’s whole history on the computer screen rather than looking through paper files, or dealing with the customer face-to-face.

Advances in technology Electronic Point Of Sale (EPOS) – Computers make stock control easier. Holding stock information in a database makes it easier to monitor when new stocks are required. The EPOS system relies on barcodes to record the products being purchased by the customer. The stocks can then be re-ordered automatically. Technology, therefore allows for more products to be produced with less resources input. As a result, businesses may gain higher profits. In addition, fewer of the environments resources may be used up, reducing unnecessary waste.

Advances in technology Production / manufacturing. Computer Aided Design (CAD) – Uses computers to design new products, or to make alterations to existing products. CAD produces 3 D mock-ups on a computer screen. For that reason, managers do not have to wait for a prototype to be built before they know what the image will look like. Computer Aided Manufacture (CAM) – Uses computers to produce a product, usually involving robots or computer numerically controlled machines (CNC). CAM is often combined with the CAD process – products are designed on computer, and the design data fed straight into the production machine.

Advances in technology • Technology in business used to be seen as an expensive method of solving problems. • However, increased flexibility of applications and the falling cost of hardware have ensured that all businesses use technology in some way. • Technology is now found in every process in the Production chain, from stock ordering to marketing.

Environmental Twenty years ago, environmental issues were rarely a priority on the agenda of business management. Now, there is an argument that operating an environmentally-friendly business is a top priority for business, particularly those whose operations and activities are nationwide and international. The environment has become a key external influence on businesses. The key environmental issues which potentially constrain the ability of a business to achieve its objectives include:

Environmental • What do you believe are the key environmental issues that affect business and how would these influence change? • Sustainability • A “green” supply chain • Minimising packaging • Promoting environmental policies • Complying with environmental laws • Carbon emissions • Waste disposal

Skill requirements • Why would skill requirements change in an engineering business? • The introduction of new technologies or equipment, necessary to keep pace with the speed of technological change. • Development of new products and services. • Introduction of new working practices to reflect new technologies and processes. • New legislative or regulatory requirements

Reduced product demand • How would “reduced product demand” influence change in the engineering industry? • Redesign existing products – make them better / cheaper • Introduce new products to compete with competition • Introduce new manufacturing techniques to produce products quicker / cheaper • Loss of orders • Loss of income • Loss of jobs