Holding and stock out costs

A business is responsible for costs if its products are damaged or costs resulting from insurance cover, labor and storage. In comparison, the cost of stocking arises if inventories are expanded or exhausted and can be correlated with factors like lack of manufacturing, purchasing costs and revenue depreciation.
Network structure benefits
One of the key benefits of network architectures is that it removes the departments of an organization.
It is essential in the reduction of administration costs
A network structure facilitates organizational flexibility
It is instrumental in fostering learning and expertise within an organizational set-up.
Difference between production of service and production of manufactured goods

Production of services entails the maintenance of equipment and instruments that are responsible for processing and manufacturing of products by an organization. Consumers, under production of services, have an influence on the product outcome unlike production of manufactured goods. Production of manufactured goods, on the other hand, refers to the processes or operations that are carried out from the time raw materials are brought to an organization to when a manufactured output is produced. Manufactured products include chemicals and vehicles.

Good versus bad news in manufacturing

The good news is that the U.S. manufacturing sector has enjoyed massive growth in the past decade and it currently produces more than 20% of the global output with approximately 60% of the manufactured exports being from the sector. Job creation in the manufacturing sector has also been on the rise.

The band news, on the flip side is that the country is faced with high manufacturing costs and that most of the manufacturing jobs have been outsourced to overseas country where those employees are paid lowly. Finally, the rise in China’s industrial park may have a negative effect on U.S. manufacturing sector.