Free

Total Cost Minimization - Essay Example

Comments (1) Cite this document
Summary
Total Cost Minimization [Name of Student] [Name of Institution] Introduction That about 60 million automobiles are manufactured in a year points to the economic and industrial force that the automotive industry is. In fact, the automotive industry consumes almost half of all world’s oil and directly or/and indirectly employs more that four million people…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.7% of users find it useful
Total Cost Minimization
Read TextPreview

Extract of sample "Total Cost Minimization"

Total Cost Minimization of Introduction That about 60 million automobiles are manufactured in a year points tothe economic and industrial force that the automotive industry is. In fact, the automotive industry consumes almost half of all world’s oil and directly or/and indirectly employs more that four million people. The strong influence of the automotive industry persists despite the low profitability and overcapacity challenges that many of the automobile manufacturers face. Importantly, the industry avails well-paying jobs and linkages and businesses to supplier industries, further expanding its influence in world economic and industrial development (Georgano, 1985). This paper explores the difference between the past and the present automobile engineering world, giving examples of Toyota and Ford. Specifically, the paper discusses the past and present economic issues, the growth and development of the manufacturers, and the changes in production speed by the manufacturers. The Past and Current State of the Industry The automobile industry has been in existence for slightly more than one hundred years, having begun in France and Germany. However, the industry grew, developed, and came of age in the United States until the current times where automobile production is done in a rather mass scale (Toyota Motor Corporation, 1988). The main areas of noticeable growth in the automobile industry are vehicle efficiency, volume, safety, choices, and features (Papatheodorou, 2007). The automotive industry has thus not lagged behind in industrial and technological development and has stayed abreast with the 20th and the 21st century industrial and technological developments. There has been mass production of automobiles accompanied by an equal mass consumption, resulting in the automotive industry receiving the title the "industry of industries (Perryman, 2011)." Despite its growth, the automotive industry encountered and continues to face a number of economic issues, which derail its further growth. Due to these problems, the industry’s average margins have fallen from 20% in the 1920s to 5% in current times. Consequently, a number of automobile companies have lost money, causing low profitability as evidenced by the industry's market capitalization. The miniature 1.6%, which the industry accounts for at European stock markets reflects this dismal performance despite the huge revenues and employment in the industry (Perryman, 2011). There is also an apparent contrast between the industry’s oversized social role, share of employment and political influence and its uninspiring financial success. The main factors that determine the performance of the industry in current times is its overcapacity and mature markets, especially in the developed countries of Europe, U.S., and Japan. In fact, currently, these three regions account for about 80% of world automobile sales. Unfortunately, the industry’s growth has stalled a lot in the recent past. Although the obvious response to this slowed growth and an increased productivity should have be a reduced capacity, it has been rather difficult to close down the existing large and expensive plants, which confer mass production and cost advantages. In the U.S., the big three automakers of General Motors, Toyota, and Ford have been losing their market share and money rather fast in the last three decades while new non-U.S.-based companies’ plants have increased their capacity and competition (Perryman, 2011). This scenario is a pointer to the big change that the industry faces. Changes in speed and nature of production are some of the reasons for which the new players in the market seem to be overtaking the bigger and more established ones like Ford and Toyota. For instance, while the big companies are large, less flexible, and designed for mass production, the new entrants cover wider production spectrum of car sizes and are designed for flexibility thus produce different models (Magee, 2007). The new entrants, referred to as transplants, mostly have non-unionized, younger workforces, and geographically flexible plants. However, the growth of big firms such as Toyota and Ford stems from their spare part and assembly plants, which are also the reasons for their economic successes. In fact, spare part plants create about 60% of final vehicle value-added besides creating employment, creating even more jobs than the assembly plants do. More spare part plants are created every decade than assembly plants are, implying that they growth faster than assembly plants. However, automobile assembly plants have more indirect and induced effect on the motor industry than the spare part plants do. As mentioned, the production speed and line of Toyota and Ford and the other automotive manufacturers have changed a great deal in recent times. First, Toyota and Ford use electric technology to produce luxury cars such as Toyota Prius, which was the flagship of the Toyota’s hybrid technology. In addition, Toyota and Ford are speedily developing vehicles that would operate entirely only on electricity, aiming at mass-production of such cars in the early years of this decade. The production speed has also been accompanied by the building of different car models, with Toyota listing approximately 70 different models sold under its namesake brand in 2009. Examples of those listed are coupes, vans, sedans, trucks, hybrids, and crossovers. Conclusion Toyota and Ford are among the most successful care manufacturers in the world. Despite the economic challenges they faced in the past, these companies managed to cerate and production and consumer base that have seen them become the top automobile makers in the world. Specifically, increased production speed and models of cars with increased efficiency, volume, and safety are the main factors contributing to their success. References Georgano, G. N. (1985). Cars: early and vintage, 1886–1930. London: Grange-Universal. Magee, D. (2007). How Toyota became #1: leadership lessons from the world's greatest car company. Penguin Group. Perryman, S. (2011). Global Automotive Outlook for 2011 Appears Positive as Mature Auto Markets Recover, Emerging Markets. Retrieved on September 20, 2012 from http://businesscenter.jdpower.com/news/pressrelease.aspx?ID=2011018 Toyota Motor Corporation. (1988). Toyota: a history of the first 50 years. Toyota Motor Corporation. Papatheodorou, Y. (2007). The Automotive Industry: Economic Impact and Location Issues. Industry Week. Retrieved on September 20, 2012 from http://www.industryweek.com/global-economy/automotive-industry-economic-impact-and-location-issues Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Total Cost Minimization Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from https://studentshare.org/engineering-and-construction/1457349-total-cost-minimization
(Total Cost Minimization Essay Example | Topics and Well Written Essays - 750 Words)
https://studentshare.org/engineering-and-construction/1457349-total-cost-minimization.
“Total Cost Minimization Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/engineering-and-construction/1457349-total-cost-minimization.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
et
ethelkemmer added comment 9 months ago
Student rated this paper as
Terrific work done on the "Total Cost Minimization". I think it is the best document I have seen so far.

CHECK THESE SAMPLES OF Total Cost Minimization

Total cost minimization

...and production systems quickly and efficiently, at minimal cost and risk across multiple global locations, is vital” (lboro.ac.uk, 2012). The contemporary automation systems are complicated in terms of service, integration, optimization, and reconfiguration. Benefits of Cost Minimization Cost minimization is frequently used in the process of product design and introduction into the market in order to bring the cost down and increase the profitability of business. As the name implies, this technique minimizes the costs. Cost minimization is extensively...
3 Pages(750 words)Essay

Total cost minimization

...Task: Total Cost Minimization: Ford Company Ford Company is a US based automobile manufacturing company, incorporated in June 16 1903. This essay paper provides a detailed discussion about information gathering, individual and teamwork, written communication skills, communication tools, professionalism, relationship, economics and project management in relation to Ford Company and its bid to minimize its total cost (Banham, Russ & Newman 3) 3. Investigation 3 a. Information gathering It has been necessary for Ford to conduct an internal investigation and gather information. The investigations have been to assess performance levels,...
3 Pages(750 words)Essay

Total cost minimization

...Total Cost Minimization The manufacturing sector is undergoing a technological revolution that is seeing it shed millions of employment opportunities to factor in highly automated and reengineered environments. Transnational corporations, for instance, are entering an era of lean production practices, fast communications, and short-time distribution and marketing operations that rely on a generation of robotic workers. Majority of the workforce is being shed and may likely not cross over into this high technology economy. Since the start of the industrial revolution, intimate energy forms and machines were utilized in boosting production and reducing labor needed in making a product. The...
4 Pages(1000 words)Essay

Waste Minimization in UK

...with relentless quantity of legislation as arising from both national and international sources and the inherent cost of recycling being the principle drivers for change. Local authorities are heading towards a more integrated approach to waste management practices in order to divert waste from landfill in the UK, in which sustainable waste management options are the most viable. Waste minimization initiatives are targeted at commercial and industrial waste streams with local authorities establishing waste minimization clubs and projects to evoke alteration in the waste management ...
4 Pages(1000 words)Essay

Total Quality Management: Cost, Gurus and Customer Service

...Total Quality Management: Cost, Gurus and Customer Service Introduction The advent of Total Quality Management has completely revolutionized existing strategies on achieving organizational efficiency and business success that it has been compared to the prodigious changes in communication ushered in by the IT revolution. Some of the so-called quality gurus that the new management concept engendered even see some parallels between its far-reaching benefits for business and the Industrial Revolution. This is mostly because business success under TQM is more than a balance in financial statements, positive profit margins or full production capacity. It even looks beyond the...
13 Pages(3250 words)Essay

The Minimization of Tension (to be decided)

...The Minimization of Tension This paper talks about how tension is minimized at my workplace, Honey Bun - a leading global investment banking, securities and investment management firm in Chicago. This summer, I interned as a financial analyst in the its Private Wealth Management Division, which provides highly customized and sophisticated investment management and financial planning services to high net worth individuals and families. BRIEFLY SUMMARIZE THE PAPER The industry is very competitive and the market is very volatile. People in my office are heavily involved in decision making and task handling process, which leads to the possibility of high level of tension in the workplace. However, this paper...
15 Pages(3750 words)Essay

Total

...1_What criteria are you using to evaluate the organization (TOTAL) for which you hope to work? In order to asses, whether a particular organizational strategy is suitable for an organization it is important to conduct a SWOT analysis. The SWOT analysis points out the strengths, weaknesses, opportunities and threats of the organization in question. To assess how effective an organizational strategy would be, it is very important to conduct a SWOT analysis. SWOT analysis is an overall strategic planning methodology. It is used to assess a strategy from the point of view of its strengths, weaknesses, opportunities and threats. It involves the business environment and the business objective of a particular project and how internal... and...
2 Pages(500 words)Assignment

Total Cost of Ownership

...Total Cost of Ownership exam question Question a Introduction In most of the companies the cost incurred in raw materials and components comprises the maximum percentage of the overall operation cost. It accounts to around 80% of the total operation cost of the company. This cost is maximum for the big and large firms where the raw materials are been bought at huge number. As per the Just-In-Time and Total Quality Management the company needs to have good criteria for selecting the right te4chquie and source for procuring the raw materials. Thus the selection of suppliers for procuring the raw material...
14 Pages(3500 words)Essay

The total cost of ownership

...Total cost of ownership Introduction Total cost of ownership is a fundamental factor that influences the cost of doing business in a country. This refers to the cost of purchasing a product and transporting it into a country. In the United States, the cost of ownership varies based on the features and usability of the product. Several indirect costs often raise the value of the cost. The cost of ownership is often high in imported products since the government investigates the nature of the products thus charging various costs and duties based on the...
2 Pages(500 words)Coursework

Total Operating Cost

...Analysis Project – Solution Introduction Several factors determine the total operation cost per revenue ton-mile for airlines.Recent pieces of research have indicated that Airline, Length of flight, Speed of Plane, Daily Flight Time per plane, Population served, Revenue Tons per Aircraft mile, Ton-Mile load factor, Available Capacity, Total Assets, Investments and Special Funds and Adjusted Assets are all-influential. The primary research question for this study is to determine which among them influence the operating costs per revenue ton-miles. The study shall also determine which variables have the strongest linear relationship with total operation...
3 Pages(750 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Total Cost Minimization for FREE!

Contact Us