Unit 5

Topic: Types of Manufacturing

Types of Manufacturing

• Manufacturing businesses can be classified based on the process.

• Can be classified as either requiring large quantities of labour or machinery to do the processing. 

1. Labor intensive: requires a lot of person hours to produce the product.

Ex. Jewelry making

2. Capital intensive: requires a lot of expensive equipment to make the product.

Ex. Automotive industry Pg. 217-218

Types of Manufacturing• Manufacturing businesses can be classified based

on the output.  

• Can be classified as producing large, expensive items for other businesses or as producing small items for consumers to purchase directly. 

3. Heavy industry: produces big expensive products for for other industry. Ex. Ship yard, tractor production

4. Light Industry: produces products for consumers. Ex. Pop industry.

Pg. 218

a) Making water turbines? _______________

b) Assembling televisions? _______________

c) Shirt manufacturing? _______________

d) Ship building? _______________

Classify the following as labour or capital intensive and light or heavy industry.

Pg. 218Figure 13.2

Case Study

Manufacturing Wrigley’s Gum

( handout )

Location of IndustriesFactors Affecting Industry Location“Industries locate where production costs are lowest”

Site/Physical Cost Factors

Three major factors of site (physical location)

1. Proximity to raw material. • The heavier & bulkier the raw material, the closer the

industry will be located to reduce transportation costs.

Pg. 224

2. Land • Must have a good price, level area, good drainages, dense well-settled soil, etc.

3.Energy - not as

important a factor today due to our ability to transport power long distances. However, was it a decision in the location of GFW?

Human (Situation)Based Cost Factors

1. Market Oriented Industry • Industries that are located close to the market

because the product has a greater value and can offset transportation costs.

• The resources are not bulky or expensive to transport.

2. Resource oriented industry • Industries that are located close to the resource

because it is to heavy/bulky to transport. • Communities frequently spring up around

resource industries.  – EX: Labrador City, Churchill Falls, Grand Falls-

Windsor and Bonavista.

Pg. 224

3. Weight-Gain vs. Weight-Loss• Weight-Gain

• If product weight is greater than the input weight, resource is located near market

• Weight-Loss• If product weight is less than the input weight,

resource is located near resource.

> The purpose of this decision is to reduce transportation costs.

4. Agglomeration Tendency

The tendency for factories producing related products to locate close to each other for mutual benefit.

• Ex. Car factory & tire factory. How does each benefit by being located close to each other?

5. Industrial Parks – Industrial parks provide many advantages for a

business. – Industrial parks are attractive for manufacturing businesses because of:

•Existing infrastructure of roads, on ramps and off ramps to highways, large lots, sewer, ample electricity etc.•Close location to related industries•Pool of skilled workers

6. Labor force characteristics that attract business

a) Wages expected: lower wages are better.

b) Training: highly skilled people are better.

c) Benefits: lower costs of employment insurance,

pensions, etc. are better.

d) Availability: high unemployment rate might

attract business.

Government Influences1. Transportation subsidies affect the location of industry.

– Subsidies allow businesses to locate farther from the resourse.

– Subsidies allow governments to encourage industry in rural areas.

Examples: • ice breakers in Botwood; • roads in Labrador; • cost of coastal transportation in Labrador; • cost of crossing the Gulf.

2. Tax breaks affect the location of Industry. – Provinces like NL have attempted to attract business by

offering tax breaks.  – The company obtains a financial break while the province

gets the advantage of putting people to work.

Industry Location; The Global Picture

The highly industrialized areas on the earth's surface are concentrated in 4 definite regions:

North America, Western Europe, Japan, and Australia

Pg. 223 fig. 13.6