The Encyclopedia of Products & Industries—Manufacturing is a two-volume collection of essays presented in alphabetical order by product. Users will also be able to find products by industry grouping in the NAICS or the SIC indexes. These indexes present the contents arranged by industry groupings and, within these, by NAICS or by SIC codes. The alphabetical General Index is another tool for locating topics that are covered throughout the Encyclopedia.
Each essay is divided into twelve sections referred to as rubrics. The rubrics and their contents are:
- Industrial Codes. Codes assigned by the U.S. Bureau of the Census to the product under consideration are provided in two categories. Listed first are the codes of the North American Industrial Classification System (NAICS) currently used in the United States, Canada, and Mexico to classify industries and their products. These are six-digit codes rendered in the Encyclopedia with a hyphen between the first two and the last four digits (e.g., 31-1811 for Retail Bakeries). The hyphen is intended to help the user manage the long number more easily in copying it into notes for later use in additional research. The earlier Standard Industrial Classification (SIC) coding is still widely used outside of government. SIC codes are shown separately; they are four-digit numbers (e.g., 2051 for Bread, Cake, and Related Products). Finally, more detailed NAICS product codes are listed, which may help the user look deeper into the subject using statistics from the Census Bureau.
- Product Overview. The text of each essay begins with a general introduction to the product under review. Some products require minimal descriptions, while others require more extensive and technical descriptions. Extensive technical treatment is sometimes appropriate to show the ways in which categories within different types of the same product differ from one another. Technical treatment is also required to deal with manufacturing, performance, and pricing issues. The Overview also typically presents a history of the product and the range of its end uses. A fair number of product categories are under regulatory control by the government. The Product Overview at minimum summarizes regulatory issues and their implications. The general intent, under this rubric, is to position the product so that most of the discussion that follows is properly grounded.
- Market. This section provides the statistical data necessary to put the product into a broad commercial perspective. Measurements of the market are presented in dollars and, if appropriate, in units. In each case an attempt has been made to provide as extensive a history as possible on sales or shipments in order to highlight trends. In the United States domestic consumption of a product is often significantly higher than domestic production. In these cases imports account for a large part of consumption. Where this is the case, import and export data are presented. Forces influencing the market are also highlighted.
- Key Producers/Manufacturers. Under this heading brief capsule descriptions of important companies participating in the market are provided. Industrial concentration varies by product categories. In some cases just a few companies dominate, while in others, participation by many hundreds of companies is common. In all cases, however, we have endeavored to identify leading producers, both domestic and foreign. In some industries, such as dairy products, associations and cooperatives play a role very similar to the role normally played by key producers. In such cases, these associations and cooperatives are also listed in the Key Producers/Manufacturers section.
- Materials & Supply Chain Logistics. In some industries unique materials requirements and/or geographic factors play an important role. Such factors influence the producing industries in important and different ways. Generally geographic factors are highlighted in this rubric, but from a supply perspective. In those industries where natural resources are involved, a look at the occurrence of the resources in the United States and globally may be highlighted.
- Distribution Channel. The most common form of product distribution involves: (1) a manufacturer selling to a wholesale distributor, (2) the distributor supplying a retailer, and (3) the retailer selling to the consumer. Variations on this pattern abound. Distributional arrangements also tend to change over time. The Internet introduced e-commerce, yet another layer of distribution, which is often a hybrid of wholesale and retail distribution with courier services providing the transportation. Under this rubric the dominant and secondary forms of distribution used to bring a product to the market are outlined.
- Key Users. Users fall into many diverse categories, which are delineated and discussed under this rubric. Broadly speaking users are either consumers or institutions. Other delineations result from age and income stratifications, male or female predominance in use, and geographic considerations.
- Adjacent Markets. This rubric highlights product categories that represent alternatives to the product under consideration or products that move up or down in tandem with the product category under consideration.
- Research & Development. All industries spend money on research and development (R&D) at least in the form of new product development, the most common kind of R&D practiced by industry. In highly technical and advanced fields, both basic and advanced research tends to be funded. Breakthroughs can entirely transform an industry. Therefore, R&D activities are important indicators of future trends. Low levels of R&D expenditure, or spending on product enhancements alone, tend to signal loss of momentum in a field. In industries where breakthroughs are close to commercialization, changes loom ahead. Such issues are highlighted under this rubric.
- Current Trends. In many essays trends identified under other rubrics are summarized here and put into an overall context. In other essays underlying forces impacting a product or its industry are presented for the first time. A discussion of trends is most fully developed for those industries faced with one of the following challenges: resource scarcity, a changing regulatory environment, and/or a disproportionate reliance on a particular demographic segment of the population.
- Target Markets and Segmentation. This section highlights the manner in which producers position their products in order to appeal to what they view as different market segments. In some product categories producers sell the same product to every market segment, but differentiate the product by using different marketing approaches or packaging, or by making minor changes to the product itself, such as using different colors. In other cases products are substantially different depending on the market targeted, and may have been developed specifically for a particular clientele. The Key Users rubric and this one have commonalities. In some essays we enlarge upon user group findings by emphasizing complementary marketing approaches. In others we have used this section to discuss product differentiations, but with a marketing emphasis.
- Related Associations and Organizations. This rubric generally presents a listing of trade, professional, and user organizations that directly deal with the product or represent the industry that manufactures the products under consideration. Web addresses of the organizations listed are also presented. Such organizations are often important sources of additional insight into the topic and deserve close scrutiny by users wishing to go beyond the presentation in these essays.
Although excessive generalization is never useful, especially not in dealing with products, seven broad trends are worth noting because they surfaced during the compilation of many essays, usually in groups. A brief summary follows with a general caution added: trends observed at any one time tend to be temporary and may rapidly reverse. The seven trends in brief are:
- U.S. Manufacturing Decline. Since the mid-1990s the manufacturing sector in the United States has been declining, with more and more production taking place beyond U.S. borders. While this trend is common knowledge, finding it confirmed in detail and with the documentation of statistics, and occasionally with the documentation of multiple domestic producer bankruptcies, makes a more serious impression on the industrial analyst. The impact of this trend on the corporate community is often muted because the offshoring activity of well-known domestic leaders is not one of their widely touted advertising messages. To discover that many companies have gradually transformed themselves into domestic headquarters for foreign production is at minimum bad news for young people seeking careers in manufacturing.
- Brand and Producer Split. Due in large part to offshoring activities, the direct relationship between a brand and its producer has been severed in many cases. It is no longer safe to assume that two similar items carrying the same brand name were made by the same company, in the same country, or that they are even being marketed by the same outfit. The sale or licensing of brand names has developed into a unique business and the buying public continues to associate genuine value with a brand because, in the past, quality associated with the brand gave it its power in the market.
- The Retailer as Manufacturer. Many large retailers have discovered that their vendors buy their products from overseas manufacturers whom the vendors neither own nor control, except peripherally. Some retailers have decided to deal directly with third-party manufacturers in Asia and Eastern Europe, in many cases the same subcontractors with whom their previous manufacturing vendors also deal. In doing so the retailers are bypassing their traditional manufacturing vendors altogether in order to offer store brands at lower prices. Such developments have been particularly notable in the apparel industry but have emerged elsewhere as well.
- Emergence of China. By the middle of the first decade of the twenty-first century China had come to replace Japan as the country most frequently mentioned as the chief competitor of U.S. manufacturers, as the source of goods sold at low cost by major merchandising firms. Somewhat less generally remarked, but certainly noted in many essays in the Encyclopedia, is the emergence of China as a market for goods as it gradually establishes a modern infrastructure. China is also emergent as a very substantial competitive buyer of natural resources, especially petroleum. Rarely noted in the general concern over China as a competitor is its own political history. China's history has been punctuated by major periodic upheavals of which the communist revolution dating to Mao Tse-Tung's emergence in the Long March (1934) and the Cultural Revolution (which began in 1969) are examples. Another period of uncertainty may change the face of China again and influence trends now seen as inevitable.
- Rising Commodity Prices. A repeating theme in many essays is the rising price of commodities. In this context petroleum is the leading product. Precisely because crude oil prices influence both fuels and plastics, and because all industry is so highly mechanized and therefore energy-intensive, rising oil prices have been producing complementary increases in the costs of agricultural products, minerals, metals, and synthetic and natural fibers. Extended logistical systems, drawing raw materials and products from distant regions, have also added costs. Rising material costs have indirectly intensified efforts to curb expenditures on labor, accomplished in part by technological solutions (rising productivity) and by outsourcing labor-intensive operations to low-wage markets, thus diminishing domestic purchasing power.
- Aging Population. A major demographic trend not subject to easy intervention, except perhaps by drastically modified policies of immigration, is the increase in the older segment of the population and the resultant relative decline of children and young people as a percent of all people in the United States. Since the end of World War II, the Baby Boom has been the most important demographic fact in the United States. The boomers are now moving on, retiring, or reaching retirement age. As they do, their numbers are a transformative factor. Some markets are shrinking, while others are growing as the Baby Boom generation ages.
- Adverse Health Trends. The last notable trend we wish to highlight, its impacts visible in a multiple cluster of products, is the growing incidence of obesity and the increasing number of overweight individuals. This trend is markedly present in children as well as adults and is associated with a rising incidence of Type II diabetes. The steady increase in these conditions, apparently highly resistant to efforts at public education and in part due to changes in lifestyle, has produced both real and cosmetic responses by participants in multiple branches of the food industry, radiating backward into agricultural commodities.