Heavy Industry — is a business that is related to the production of capital goods and machinery and also to mineral processing. Heavy industry is related to the production and supply of items to other businesses. This is called B2B (business-to-business) sales. The enterprises of heavy industry are an important part of the supply chains. Their stocks are very sensitive to market sentiment and quite profitable.
Types of productions in the Heavy Industry
All heavy industries are related to big machinery, massive buildings, and the processing of natural resources. They require a large space for the manufacturing area and office blocks and many employees.
List of main heavy industries:
- locomotive manufacturing;
- chemical production;
- machine tool building;
- steel production;
Automobile manufacturing isn’t included in this list because it is a B2C (business-to-consumer) business, and the main clients are physical persons.
Work of Heavy Industry
Heavy industry has high barriers to entry because it requires big and complex equipment, large facilities for storage and shop floors, and a big amount of investment. The production process in the heavy industry is cyclical. All works related to the manufacture of items are situated in large production areas. The workers should strictly follow the technological process and quality standards.
All questions related to safety and technical problems come under the purview of the production department. The development engineers and technicians improve the product and production materials. The safety engineer oversees the occupational health and safety compliance on the shop floor.
To communicate with the clients the enterprise has a sales department where the sales manager offers the end product to other companies. The process of sale may be quite long because the production of heavy industry is usually expensive and hard to transport. However, the profit and commission from one deal are rather big, that’s why the job of sales manager in the B2B sector is very popular.
If the company purchases a product of heavy industry, such a task passes under the control of the procurement department. The buyer analyzes the commercial offers from different companies and selects the most advantageous one. Also, the procurement department collects the requests from the production department on the items they need and searches for the suppliers.
The promotion of the company’s product and the search for new business contacts is the task of the marketing department. The marketer analyzes the state of the market, the balance between demand and supply, and the popularity of the company’s production. They create advertising campaigns, participate in trade shows and develop the corporate identity to make the company recognizable.
The department of quality control monitors the final product to identify manufacturing inconsistencies. This is very important because the quality of the end product directly influences the company’s reputation and level of sales. If the quality manager finds the problems with the facilities or conditions of work that lead to the deterioration of the product, they decide how to overcome it. It can be a purchase of a new machine tool or material.
Heavy Industry in Asian countries
The development of heavy industries in Asian countries like Japan, South Korea, Singapore, Hong Kong, and China had helped them to achieve economic progress in a short time. This phenomenon is called the “economic miracle”. Afterward, these countries had become called the “Asian tigers”.
The main factors of the economic miracle were the access to the new technologies, the support from the government, opening to the western investors, and low taxes. Examples of the world-known Asian companies are Toyota (Japan), Samsung Electronics (South Korea), and Huawei (China).
Problems of Heavy Industry
The heavy industry is related to several controversial topics. The main one is the negative impact on the environment. The byproducts of factories pollute the atmosphere and rivers. Construction of new shop floors leads to deforestation and destruction of habitat loss for many animals. Polluting emissions cause the greenhouse effect and climate change. Some noxious emissions lead to numerous respiratory tract diseases and lung cancer.
Today companies try to decarbonize their production and make it more eco-friendly. However, some industries like lead smelting and oil extraction are hard to make more environmentally compatible. Many biologists and scientists insist that humanity should leave hydrocarbon extraction in the past and switch to green sources of energy like hydropower, solar energy, wind energy, or biomass from plants. These sources allow people to receive energy from natural biological processes. Currently, this question is under discussion because renewable sources are a new thing. Some countries try to implant green technologies in daily life, and they already see the positive result.