TRANSFORMATIVE ACTIVITIES: CHARACTERISTICS, DEVELOPMENT, EXAMPLES - ECONOMY - 2024

The transformational activities are the different steps or processes by which raw materials are transformed into a final product. This transformation process begins with the design of the product and the detail of the materials from which the product is manufactured.

Then these materials are transformed through the manufacturing processes in order to be transformed into the required piece. Modern transformation involves all the intermediate processes that are required in the production and integration of the elements of a product. Some industries, such as semiconductor and steel manufacturers, use the term manufacturing instead.

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The transformation is carried out with the production of goods for use or sale, using labor and machines, tools, chemical or biological processing, or formulation.

The term can refer to a range of human activities, from the artisanal process to the high-tech one. However, it is most frequently applied to industrial design, in which raw materials are transformed into finished products on a large scale.

characteristics

Manufacturing plants often use an assembly line, which is a process in which a product is assembled in sequence from one workstation to the next.

By transforming the product through an assembly line, the finished product can be put together faster and also with less manual labor.

Risk management is the most important part of the transformation. Managing this risk includes:

Productivity

Balancing efficiency with productivity translates into profit. Low productivity means higher costs, due to wasted labor and overhead.

QA

If products are not made of consistent quality, a business may not survive.

Customer experiences should be positive on all branded products. Otherwise, the entire company could be affected.

Design

Manufacturers must ensure that their product is well designed in order to beat competitors. When designed with quality and innovation, a product stands out from the rest.

Cost effectiveness

Both the allocation of labor and the robotic support, the quality of the material and the unit price, affect the profitability in the transformation.

If a product is not profitable, it will fail and jeopardize the bottom line of the entire company. The automotive industry makes production more profitable by creating different car models based on shared platforms.

Types of transformative activities

At the unit level

They are those activities that are carried out each time a unit is produced. For example, each time a unit is produced, machine hours and energy are used.

Direct materials and direct work activities are also unit-level activities, although they are not overhead costs.

At the batch level

Machine setups, inspections, and production scheduling are examples of activities that are related to batches, but not to individual products.

At the product level

Equipment maintenance, routine testing, bill of material maintenance, and material handling are some examples of product-level activities.

At the installation level

Examples of facility-level activities are factory management, plant maintenance, safety, and depreciation.

How do transformative activities contribute to development?

Transformative activities form a substantial part of the Gross Domestic Product (GDP), create products and are the engine of economic growth, being crucial for all developed economies, although the predominant trend in developed countries is the tertiary sector.

Without a transformer sector, it will be very difficult for a country's economy to sustain innovation.

Necessary for world trade

According to the World Trade Organization, 80% of interregional trade is in products and only 20% is in services.

This means that products are needed to trade for foreign products. Otherwise, a large trade deficit would accumulate.

Crucial for service industries

Although about 66% of most economies are made up of service industries, these industries depend on transformed products for their operation and for their own technological progress.

For example, the retail and warehousing industries, which account for 11% of US GDP, are in the business of selling processed products.

The airline, telecommunications and software industries depend on airplanes, telephones, and computers, both for their existence and for their technological progress.

Job creation

The US Institute for Economic Policy has found that every manufacturing job supports three other jobs in the broader economy, through a "multiplier effect."

Economic growth

The productivity of transformative activities is increasing about 3% each year in the United States, because technological advances are always being made for factory machinery.

In contrast, service industries depend on technological progress in machinery.

Also, since machines can make other machines, there may be what is called exponential growth.

National power

During the last 100 years, the four or five most powerful countries in the world have controlled about 75% of the world production of industrial machinery.

This is because industrial machinery is used both to generate wealth and to produce military equipment.

If all regions of the world had the independent capacity to produce transformed products, there would be little opportunity to intimidate and dominate countries.

Elimination of poverty

Manufacturing creates jobs for the middle class, which hold onto a middle class economy. Unions thrive in manufacturing industries because it is easier for workers to bargain.

Examples

The basic list of the transformative and industrial sector, or secondary sector of the economy, is as follows:

- Automotive industry.

- Foods.

- Electrical industry.

- Consumer goods (all consumables).

- Metallurgical industry.

- Chemical industry.

- Building.

- Energetic industry.

- Textile and clothing.

- Glass industry.

An example of transformative activities is the use of rubber trees to produce latex as a raw material to make rubber powder. Smoked rubber or rubber processing is included in the transformation process sector.

The transformation sector is closely related to engineering and also to industrial design.

Examples of major transformers or manufacturers in North America include General Motors Corporation, General Electric, Procter & Gamble, General Dynamics, Boeing, Pfizer, and Precision Castparts.

Examples in Europe include Siemens, Volkswagen Group, Michelin, and FCA. Additionally, examples in Asia include Toyota, Panasonic, Yamaha, Samsung, LG, and Tata Motors.

References

1. Rohit Agarwal (2019). Activities in Manufacturing Organizations: 4 Classifications. Your Article Library. Taken from: yourarticlelibrary.com.
2. Wikipedia, the free encyclopedia (2019). Manufacturing. Taken from: en.wikipedia.org.
3. Management Mania (2019). Secondary Sector (Manufacturing and Industry). Taken from: managementmania.com.
4. Steffani Cameron (2018). The Key Characteristics of Manufacturing. Bizfluent. Taken from: bizfluent.com.
5. Jordan (2012). Why is manufacturing important? The Global Teach-In. Taken from: globalteachin.com.