NIST Special Publication 1601 Tracking Industry Operations Activity A Case Study of US Automotive Manufacturing Douglas S. Thomas Anand M. Kandaswamy This publication is available free of charge from: http://dx.doi.org/10.6028/NIST.SP.1601 NIST Special Publication 1601 Tracking Industry Operations Activity A Case Study of US Automotive Manufacturing Douglas S. Thomas Anand M. Kandaswamy Applied Economics Office Engineering Laboratory This publication is available free of charge from: http://dx.doi.org/10.6028/NIST.SP.1601 November 2015 U.S. Department of Commerce Penny Pritzker, Secretary National Institute of Standards and Technology Willie E. May, Under Secretary of Commerce for Standards and Technology and Director of NIST Certain commercial entities, equipment, or materials may be identified in this document in order to describe an experimental procedure or concept adequately. Such identification is not intended to imply recommendation or endorsement by the National Institute of Standards and Technology, nor is it intended to imply that the entities, materials, or equipment are necessarily the best available for the purpose. National Institute of Standards and Technology Special Publication 1601 Natl. Inst. Stand. Technol. Tech. SP 1601, 64 pages (November 2015) CODEN: NSPUE2 This publication is available free of charge from: http://dx.doi.org/10.6028/NIST.SP.1601 Abstract Private firms, driven by competition, frequently achieve advances in efficiency on their own accord; however, there are often barriers to advancement that surpass the ability of any single firm. Additionally, competition, lack of communication, and other factors can prevent the collaborative efforts necessary to overcome such barriers. It is in these types of situations that publicly-funded research efforts are often necessary for advancing industry efficiency. Unfortunately, there are numerous factors affecting efficiency and only a limited number of them can be identified. The result is that researchers must examine areas of manufacturing that consume high levels of resources in order to identify change agent efforts that have a high return on investment. To identify high resource areas it is necessary to have an inventory and model of resource consumption. This report identifies data on manufacturing activity and provides a model for tracking operations activity. The method is then illustrated in the automotive manufacturing industry. There are two potential approaches to track resource consumption: a top down approach and a bottom up approach. Data at the broadest level is readily available, but as one moves towards more and more detail, data becomes scarcer. For this reason a top down approach is developed. Data for a bottom up approach is briefly discussed; however, this approach is left for future research due to data limitations. The top down method is applied to the automotive manufacturing industry as a case study, which includes a review of automotive manufacturing. This approach provides a more comprehensive exploration of data for tracking industry operations activity at all levels of detail. The top down analysis uses input-output analysis combined with other industry data to estimate industry operations activity. The aggregated dataset layout is a 1238 by 397 matrix resulting in over 490 000 information points on the US economy with over 290 000 being related to manufacturing. That is, the data provides over 490 000 categories of information covering compensation costs, taxes, gross operating surplus, labor hours, production time, environmental impacts, natural resource use, energy consumption by end use (e.g., heating/cooling and production processes), and building capital. Compensation and other labor related activities are broken into over 800 different occupations for each industry. Industry data is broken into over 300 NAICS codes categories for each industry. Environmental and natural resource consumption is broken into 12 TRACI categories. This model incorporates the resources used in US manufacturing and its US based supply chain. Keywords: supply chain; value chain; manufacturing; input output; automotive manufacturing; manufacturing ii iii Preface This study was conducted by the Applied Economics Office in the Engineering Laboratory at the National Institute of Standards and Technology. The study provides a model for tracking manufacturing industry operations activity and illustrates the use of the model in the automotive industry. Disclaimer Certain trade names and company products are mentioned in the text in order to adequately specify the technical procedures and equipment used. In no case does such identification imply recommendation or endorsement by the National Institute of Standards and Technology, nor does it imply that the products are necessarily the best available for the purpose. Cover Photographs Credits At the Paint Shop in Chrysler Group’s Sterling Heights (Mich.) Assembly Plant, a 2015 Chrysler 200 moves through the Underbody Sealing and Underbody Coating station, flipping the vehicle body completely upside down to seal all appropriate seams and compartments. (2014). This image was used in accordance with Fiat Chrysler Automobile’s editorial use policy. iv v Acknowledgements The authors wish to thank all those who contributed so many excellent ideas and suggestions for this report. Special appreciation is extended to Simon Frechette, Katherine Morris, and Dr. Vijay Srinivasan of the Engineering Laboratory’s Systems Integration Division for their technical guidance, suggestions, and support. Special appreciation is also extended to Dr. Stanley Gilbert, Dr. Robert Chapman, and Paul Rothfeld of the Engineering Laboratory’s Applied Economics Office for their thorough reviews and many insights. The authors also wish to thank Dr. Nicos Martys, of the Materials and Structural Systems Division for his review. vi vii Table of Contents ABSTRACT ................................................................................................................................................ II PREFACE ................................................................................................................................................. IV ACKNOWLEDGEMENTS ........................................................................................................................... VI TABLE OF CONTENTS..................................................................................................................... VIII LIST OF FIGURES ............................................................................................................................... IX LIST OF TABLES ................................................................................................................................. IX LIST OF ACRONYMS .......................................................................................................................... X 1 INTRODUCTION .............................................................................................................................. 1 1.1 BACKGROUND ............................................................................................................................... 1 1.2 PURPOSE…………………………………………………………………………………………………………………………………1 1.3 SCOPE AND APPROACH ................................................................................................................... 2 2 CHANGE AGENT ACTIVITIES, STAKEHOLDERS, AND GEOGRAPHIC SCOPE ........................................ 5 2.1 EFFICIENCY AND MARKET FAILURES ................................................................................................... 5 2.2 CHANGE AGENTS ........................................................................................................................... 5 2.3 STAKEHOLDERS ............................................................................................................................. 8 2.4 GEOGRAPHIC SCOPE AND IMPORTED GOODS AND SERVICES ................................................................ 10 2.5 STANDARD DATA CATEGORIZATION ................................................................................................ 11 2.5.1 The North American Industry Classification System (NAICS) ................................................ 12 2.5.2 Standard Occupational Classification System (SOC) ............................................................. 13 2.5.3 Standard Classification of Transported Goods (SCTG) .......................................................... 14 2.5.4 Tool for the Reduction and Assessment of Chemical and Other Environmental Impacts (TRACI) .................................................................................................................... 16 3 INDUSTRY OPERATIONS DATA ...................................................................................................... 17 3.1 TOP DOWN DATA ........................................................................................................................ 17 3.1.1 Inter-Industry Data ............................................................................................................... 17 3.1.2 Environmental and Natural Resource Data .......................................................................... 19 3.1.3 Inventory and Transportation Data ...................................................................................... 20 3.1.4 Labor Data ...........................................................................................................................