The wholesale industry occupies a central place in the U.S. economy, as it constitutes a significant percentage (4.4%) of the country's employment and of all commercial establishments (7%). According to recent employment statistics, wholesale trade employed 5,897,600 Americans in 2006, and employment in the field is forecast to rise 8.4 percent during the 2004-14 period. The manufacturing industry has also oiled the nation's financial engine by posting the highest productivity growth among all other industry sectors. As for product development and technological innovation and progress, these enable the manufacturing and wholesale fields to continue boosting their performance and enhancing their products. Wholesale, manufacturing and development- the three major players in the nation's industrial powerhouse- are outlined below:
1. Wholesaling
Wholesale involves the sale of merchandise or goods to other wholesalers, to commercial, institutional, professional or industrial business users, or to retailers. Also known as distributors, wholesalers act as intermediaries between retailers and manufacturers in product distribution. Manufacturers, which typically operate out of an office or warehouse, ship and sell their merchandise to wholesalers, which then resell the products to customers, retailers or other wholesalers. Some of the items purchased and/or re-sold by wholesalers include (1) durable or capital non-consumer goods and (2) raw and intermediate supplies and materials utilized in production. Among the duties of wholesalers are (1) assembling goods, (2) sorting and grading the products in large lots, (3) breaking bulk, (4) repacking and (5) reselling in smaller lots. The three segments of wholesale trade in the U.S. are (1) durable goods, (2) non-durable goods, and 3) electronics markets.
Durable goods wholesaling is comprised of the following categories:
- Residential furnishing and furniture wholesalers;
- Vehicle and motor vehicle parts wholesalers;
- Commercial and professional supplies and equipment wholesalers;
- Lumber and other construction supplies wholesalers;
- Electronic and electrical goods wholesalers
- Mineral (with the exception of petroleum) and metal wholesalers;
- Heating, plumbing and hardware supplies and equipment wholesalers;
- Supplies, equipment and machinery wholesalers; and
- Miscellaneous durable goods wholesalers.
Non-durable goods wholesaling consists of the following specialties:
- Pharmaceutical products and drugs wholesalers;
- Paper wholesalers
- Piece goods, notions, and apparel wholesalers;
- Grocery and related items wholesalers;
- Agriculture, farm product, and raw material wholesalers
- Fishing and forestry products wholesalers;
- Chemical and similar products wholesalers;
- Distilled alcoholic beverage, wine, and beer wholesalers;
- Petroleum and petroleum products wholesalers; and
- Miscellaneous non-durable goods wholesalers.
Wholesale markets offer numerous benefits, such as:
- promoting a more stable supply and sale of products;
- improving access to market information, such as quantities of products marketed, stored and shipped; stocks; variety of products; packaging and quality; destinations; line of products; price and market trends;
- encouraging competition, which in turn facilitates price discovery and enhances efficaciousness in distribution;
- enhancing efficiency and decreasing distribution costs by the mere fact of the wholesaler's specialization;
- improving quality control and inspection; and
- increasing quality differentiation and output, as well as encouraging productivity.
2. Manufacturing
This industry involves the application of labor and tools to transform raw materials into products for use or sale on a large scale. Industrial design and engineering are very much implicated in the manufacturing field. Quality engineering and quality control create mechanisms to guarantee that services and products are designed and produced to fulfill or surpass customer expectations and demands. Quality assurance encompasses activities ranging from production, management, development, and design to documentation, servicing, inspection, and installation. The quality of products and components, assemblies, and raw materials are regulated through quality assurance.
Some of the most commonly-employed manufacturing systems in the U.S. are (1) the American system of manufacturing, in which specialized equipment replaces hand tools, (2) mass production, (3) prefabrication, which is prevalent in the construction field, and (4) rapid manufacturing. Manufacturing is divided into numerous categories, which include the following:
- Construction industry
- Chemical and pharmaceutical industry (i.e. paper and pulp industry; medicine)
- Toy industry
- Computer industry (i.e. semiconductors)
- Energy industry
- Electronics industry
- Beverage and food industry (i.e. brewery, food processing)
- Industrial design industry
- Engineering industry (nanotechnology, synthetic biology, biotechnology)
- Metalworking industry (steel, tool and die making, machine tools)
- Telecommunications industry
- Plastics industry
- Garment industry (tent-making, clothing, sail-making)
- Automotive industry (tires, automobiles, aerospace manufacturing)
Manufacturing, which some economists consider to be wealth-generating hub of an economy, has produced numerous benefits including:
- a growth in advanced manufacturing job opportunities in the nation's Manufacturing Belt;
- significant material contributions to national infrastructure;
- a higher rate of production and lower labor costs, as a result of mass production, which in turn benefits consumers who pay less for the goods purchased;
- reduction in human error; and
- minimization of on-site construction, reduction in construction time, faster completion of buildings, and a quicker return on capital investment due to prefabrication.
3. Development
The process of introducing a new service or product to the marketplace is known as new product development (NPD). Types of new products include the following:
- Core product revision
- New product lines
- Modifications to augmented product
- Entirely new product
- Repositioning
- Line extension
NPD involves the following steps: (1) idea creation, (2) idea screening, (3) development of concept and testing, (4) analysis of the business, (5) market testing and beta testing (creating a mock-up or a concrete prototype), (6) technical execution and (7) sale. NPD is usually expensive when technically-complex products are concerned. Therefore, many organizations opt to join forces with other companies, which helps them take advantage of a wider range of expertise, defray the costs, and expedite the process. One type of NPD is flexible product development, whereby changes are made to the product being designed, even at late stages, without triggering any disruptions. Software products are an example of items that typically undergo flexible product development.