Manufacturing Industries In Germany Research Assignment (Essay Sample)

MANUFACTURING INDUSTRIES IN GERMANY
Name
Institution
Introduction
Most of the manufacturing industries in Germany bear something in common and this is their face level in comparison with global industry leaders, with a characteristic innovative strength that enables them to transform over time and therefore keep up with global demands. In order to maintain their sustainability, manufacturing industries in Germany have employed professional expertise from various parts of the world, which also allows them to upgrade their creative potentials.
Right from IT and telecommunications to healthcare, automotive engineering and aerospace engineering, it must be recognized that these industries face a number of global concerns despite the fact that they have outperformed most global corporations. These manufacturing companies are well-distributed through the country and despite their geographical locations, the global problems that they face are almost similar. Some manufacturing companies especially those dealing with the automotive industry have tried as much to embrace flexibility in an attempt to deal with some of the most prevalent global issues but there are numerous strides that ought to be made in order to stem the tides that affect various markets.
Literature review
Over the last few decades, a lot of research has been done relating to the reallocation of various manufacturing industries using offshoring. In German to be specific, manufacturing industries have engaged in offshoring in order to gain advantages such as cost benefits and the proximity to their target customers. Of recent concern, however, is the increased focus on backshoring, which is the reverse movement of these same manufacturing industries.
In Germany, these industry reallocations have sparked a lot of debate at the government level because a greater proportion of the government leaders have expressed the desire to own a strong manufacturing sector (Grappie et al. 2015). This happens because they have postulated the creation of numerous jobs, higher wages especially in the service sector and the potential for more exports at the expense of increased imports. Germany recently came up with a program that is identified as Industrie 4.0, which is meant to provide €200 million for manufacturing industries, taking into account various aspects such as geographical location from an industrial, social and technical perspective (Grappie et al. 2015). Such a move is also apparent in the United States whereby the U.S Economic Development Administration has come up with a program called ‘Make it in America’, which is a $40 million initiative that is directed towards the backshoring of manufacturing industries.
Unlike offshoring, backshoring is receiving a lot of attention from researchers and practitioners, something that has pushed the practitioners into a deeper understanding of the backshoring rationales. Researchers on the other hand, are focusing on the challenges, effects and drivers of both movements and which of the two ought to be given more attention at a time when global corporations are facing uniform challenges, not forgetting the pressure that they are facing in an attempt to gain a competitive advantage. Some of the most essential issues that have led to the increased cases of backshoring in Germany are related to quality, extended lead times, variations in exchange rates and lack of enough knowledge to run large manufacturing corporations in their current state.
Grappie et al. (2015), found out that most of these moving companies have leveraged from positive consumer reactions with regard to their willingness to buy goods that have been produced locally and this means that the reasons for offshoring and backshoring are totally different.
To further highlight the importance of exploring Germany manufacturing industries, there is evidence of the empirical and theoretical issues that affect the efficiency of various industries despite the manufacturing efforts that these industries have shown (Berger & Humphrey 1997). Most of the literature on industry efficiency comes bifold: models for measuring efficiency and an explanation of the various inefficiencies that affect manufacturing industries.
Despite the widespread literature, however, there is very little information on the attempts that have been made to try and quantify the allocative efficiency. Berger and Humphrey (1997) for instance, have tried to review some of the best studies within the financial sector in an attempt to explain the various challenges that face German manufacturing corporations and as it will be noted later, the hunt for potential clients and financial challenges are some of the major issues affecting manufacturing industries globally.
German corporations might have done so well in the past few years but there are differences in efficiency and unless the factors accounting for these differences are identified, it is barely possible to understand the various ways in which such industries will improve. The most probable factors that can be used to explain the differences in efficiency are grouped into four broad categories and these include:
* External factors
* Specific firm characteristics such as its size and human resources
* Dynamic deviations from an industry’s state of equilibrium
* Ownership factors such as the extent of public intervention to an organization’s management
In an age where outsourcing is the order of the day, industries have increased the number of services that they outsource and this has contributed directly to the differences in operational efficiency. Right from assembly to product design, there are various services and technicalities that German-based companies are outsourcing and it has contributed to their growth or downfall. This makes it essential to carry out a detailed literature review on the success of Germany companies right from the 1990’s, not forgetting the various research studies that have been carried out to determine the factors that boost or limit the efficiency of various clusters of manufacturing industries.
Manufacturing industries in Germany
Armament manufacturing industries
Some of the renowned German weapons, submarines and tankers are in a constant high demand across the globe, with the leading importer being Israel but the firearm industry has a lot of worries relating to policy regulations. There has been a dramatic decline in the number of weapons ordered by the German military and this has forced most of the industry manufacturers to focus on the international market.
This is evident from the assertions made by Frank Haun, one that currently stands as the Krauss-Maffei Wegmann defense company that is based in Munich. This company’s product line includes tankers and armored vehicles but due to a declining local market, focus has shifted to the global industry (Hawranek et al. 2011). A few days back, Haun projected some of the countries that could emerge as potential buyers of the weaponry that this company produces and these included Brazil, Chile, Canada and China. These were grouped under the blue label, meaning that they could import any weapons at any given moment. Those on the yellow label on the other hand, could only import weapons upon specific conditions because the armament industry is barred from selling weapons to unstable nations.
Unfortunately, it is the German government that decides the specific countries that ought to be labelled blue or yellow. The German Federal Security Council determines the specific countries to which weapons should be sold and depending on a nation’s stability standing, it may swiftly change from yellow to blue (Hawranek et al. 2011). Haun expected to sell some 2A7+ tankers to counties such as Saudi Arabia that had ordered for these weapons but since it had been green-lighted by the Security Council, the company had to stay in wait.
Germany ranks third amongst all the global weaponry supplies, with Russia and the United States being the leading nations. The most coveted tanks from Germany are produced by Rheinmetall and KMW, while the most renowned Germany submarines are produced a company known as ThyssenKrupp (Hawranek et al. 2011). Missiles emanating from the Diehl Company are in high demand, not forgetting that Heckler &Koch leads in the production and supply of riffles.
The most notable problem affecting the armament relates to the local regulations that govern various nations. In the United States for instance, military corporations are only allowed to buy their weapons locally but in an instance where there are exceptions, the U.S can only buy smooth-bore guns that have been manufactured by Rheinmetall because they are more superior compared to those that are manufactured in the U.S (Hawranek et al. 2011).
There is no crisis in the armament industry because it has always been argued that any crisis is the order of business in the industry but Germany has proved to be more successful in this manufacturing industry compared to all the other nations (Hawranek et al. 2011). There is a number of rising troubles in the world and considering the fact that Germany manufactures world-class weapons, its global market has expanded unprecedentedly.
Like most armament manufacturing industries in Germany, Rheinmetall has tried as much to adapt its products to a changing global climate and this is one of the factors that place the country ahead of the other nations. Ten years ago, most of the armament industries in Germany were only selling their goods to the local industries but in recent times, approximately 70% of their military products are exported to foreign nations.
Challenges facing the global armament industry
The greatest policy challenge facing this industry relates to the policy regulations in various countries. Towards...