Rural areas are considered to be attractive for manufacturers due to ready supply of reliable and low-cost labour. From 1950 to 1980 manufacturing firms flocked in rural areas and created millions of job opportunities for people living there. But the new manufacturing technologies and globalization of markets changed the competitive edge. The only reason that caused manufacturers turned towards rural areas was the low cost in everything as the cost of labour, cost of land, government polices, and state and local tax rates all were quite low which caused greater benefit. Now the manufacturing firms in rural areas face great difficulties to keep up the pace with today’s advanced technological and economical environment.
Lack of Skilled Labour
The problems faced by manufacturing firms based in rural areas can be divided into some potential problem areas including Human resources, access to wholesalers, suppliers and customers, transportation infrastructure and government policies.
Human resource is the greatest problem faced by rural manufacturing firms. Labour quality is one of the major human resource problems. Most of the labour in rural areas is ignorant and illiterate having no knowledge of latest technologies. Manufacturing plants are now computerized which require expert labour. Although labour in rural areas is abundant and willing to work on quite low wages but the quality of skilled labour still remains the biggest problem.
Less Attraction to Managers and Professionals
The next major problem for manufacturers operating in rural areas is lack of managers and professionals. Experienced managers and professionals always seek other facilities besides salary package like big hospitals, good schools, easy access to airports and main highways and other places like shopping malls etc. A company runs successfully due to good and experienced managers without them it becomes difficult for the country to become successful.
Almost all wholesalers and suppliers reside in urban areas to be nearer to retailers and other potential customers. Therefore they all prefer manufacturers who are in urban areas or near urban areas to avoid transportation costs and other coordination problems. So for manufacturers in rural areas it becomes a big problem to deal with good wholesalers. Other problems for manufacturers in rural areas include low quality of life, problems of water, sewerage systems, limited access of supplies and other things.
Manufacturers who are looking to create a manufacturing setup in rural areas should keep an eye on all these factors. They should try to eliminate all these problems efficiently. Doing this they can save a handsome amount and cane become successful in no time.