Manufacturing

Is the burning of unwanted materials such as paper, trees, brush, leaves, grass, and other debris, where smoke and other emissions are released directly into the air without passing through a chimney or stack. Open burning also includes incineration devices that do not control the combustion air to maintain an adequate temperature and do not provide sufficient residence time for complete combustion.

Open burning pollutes the air and poses a fire hazard. The air pollution created by open burning can irritate eyes and lungs, obscure visibility, soil nearby surfaces, create annoying odors, and are a danger to those with respiratory conditions. Alternatives (car eminence):

1. Compose – compost (butt Baja) Instead of burning them (the garbage) clippings can be turned into food for your garden or houseplants.
2. Recycle ; Leaves and grass – process old/used materials (e. G. Per, metal, plastic, etc) into new product.
3. Craft (Kara tango) – use old material and create something useful
4. Reduce – Less stuff used, less stuff need to be burned – Look for Items with less packaging ; Buy items in packaging that can be reused or recycled
5. Reuse – Reuse everything can be reused (bottle, can, etc) – Donate old clothes, shoes, books, appliance, electronics, furniture and toys to charity.
6. Carry a coffee mug with you instead of disposable cups.Bring your own cloth bag to the store or reuse plastic bags.
7. Landfill (attempt bung sampan) – Items that cannot be reused or recycled should be taken to the landfill.

Open Burning Outcomes:

1. Alarm pollution
2. Foggy Rebus)
3. Hazardous/ poisonous air/smoke from the burning of pesticides, detergent, etc.
4. Danger of explosion
5. Can result in uncontrollable burning (forest burning, house on fire, etc)
6. Can danger human being as well as animals

Companies want to utilize modern infrastructure and focus on their core strengths hill other professional firms handle their other business processes (Lathering, 2007: 2). The textile Industry has been a fundamental driving force In China’s economy for many years. Outsourcing production to the Chinese manufacturers has become popular among other foreign firms in the recent past (Earns, 2006: 362). This is especially because the textile industry is a labor intensive industry and firms prefer to outsource In China since It has large pool of cheap labor.

The World Bank report of 2006 Indicated some of the most suitable locations to Invest In china which re; the south east Coastal provinces, the Pearl river delta province of Gudgeon, all special economic zones and the province of Fijian (Yuan, 2008: 20). Pestle analysis is a technique used to assist corporations in understanding the external environment In which they operate In the present and future. It helps an organization to assess the macroeconomic conditions surrounding it in order to make a business decision.

It works more efficiently when used in conjunction with risk analysis, SOOT analysis, and urgency grid. Expert knowledge of the organization and its external surrounding Is also Important in pestle analysis. The word PESTLE was coined from political, Economic, Sociological, Technological, legal, and environment factors that affect an organization. The main aim of conducting PESTLE analysis is to help in the analysis of the external environment and its effect on the organization (Institute of leadership & management 2007:23).

In pestle analysis, we consider each of the external factors and how it is likely to impact on the organization. Political factors: The government plays a major role in growth of businesses through policy formulations. These policies can affect an organization both positively and negatively. Although policies existing In China favor exports to China, sourcing remains the best tool to gain entry into the market. It is further renown for its low cost sourcing. Gap Inc. Should consider the existing government policies and assess whether or not they favor the textile industry.

Social factors: Most of the Chinese working class lack global business experience due to socialism mode of governance where the government provided almost everything especially in the past. Gap should aim to build good legislations with both the local and international governments. It should also use sourcing as a means to penetrate the Chinese market. The composition of a country population has major effects on the performance of a business (Center & Edmonds, 2002: 40). Outsourcing also requires high level of trust since It involves sharing financial information and actual transfer of cash (Chining, 2009:127).

Economic factors: China’s economy is more advantaged in comparison with most other developing I OFF countries. I Nils Is primarily Owe to Its tidally to allover Nell quality products Tanat meet he standards that are required by legislation and consumers in the European countries. It also provides ideal environment to source consumer products. The textile industry is also on the road to recovery due to the policy for revitalization plans for the textile industry which was passed in 2009 Just after China regained economic growth.

This has seen the textile industry overcome numerous difficulties and make new development (China textile network company, 2009: 4). However, China’s market is characterized by risks and GAP Company should maintain flexibility and diversity when dealing with sourcing. Teaming up with local companies in China would help Gap in cost cutting. It would also aid with the knowledge on the domestic market as they would rather assists as partners rather than competitors (The outsourcing institute 2005).

Legal factors: The Chinese legal system does not adequately protect the IP rights. The outsourcing company should therefore understand the extent to which patents and trade secrets can be protected (Kennedy & Clark, 2006: 1). Gap Company should therefore ensure that their legal rights are protected. Technology: IT professionals graduating each year from China are approximately 200000, providing a strong technically skilled population. China is rapidly emerging as one of the world’s leading supplier in offshore software outsourcing due to its remarkable development rate.

Its aim is to outshine India and become the dominant competitor (Shine technologies 2008). Gap Inc. Should take advantage of this emerging strength and go ahead to outsource its textile manufacturing services in China as well as looking into ways to benefit from China’s current software strengths since for any company to succeed in the modern market, it has to utilize highly advanced technology. Environmental factors: China has a developed IT structure, networks, and infrastructure. It has massive telecommunication expansions making it more suitable for an industry growth.

China also has the advantage of having a large pool of inexpensive skilled labor. Companies can benefit from the China market by taking advantage of and cut costs that are up to approximately 50-60% (Shine technologies, 2008). However, the textile industry in China has constantly been on the spotlight due to its massive negative effects on the environment. Prices of clothing and fabric imported to the U. S have been falling ever since 1995. The Chinese textile companies have been known to cut costs of production by dumping wastes into rivers causing massive pollution. U. S retail textile industry on the other hand is struggling to prevent environmental issues that have caused them consumer backlash in the past. The textile industry in China is one of the dirtiest industries in the country. Heavy metals and carcinogens contain high levels of organic materials causing much damage to the environment. Gap therefore should consider this as a drawback when opting to outsource in China nice this pollution may eventually lead to emergence of social movements that will rise against environmental degradation by textile industries leading to considerable reduction in sales.

Toyota Motor Corporation started as a subsidiary of the Toyota Automatic Loom Works, Ltd. It was founded in 1937 as the Toyota Motor Company, Ltd. It changed its name to the Toyota Motor Corporation in 1982 when the parent company merged with Toyota Sales Company, Ltd. In 1 993, Toyota Motor Corporation (Toyota) was Japan’s largest automobile company. It controlled approximately 45% of the domestic market. Its next largest Japanese competitor was Ionians, with approximately 25% market share, followed by Honda and Mazda, which together represented about another 20%.

The remaining 10% of the domestic automobile market was made up of several domestic manufacturers, including Issue, and several foreign competitors, such as Mercedes Benz and the “big three” American firms: General Motors, Ford, and Chrysler. The domestic and world automobile markets were characterized by Intense competition. Models were brought out rapidly despite their high development costs. Fractions of a percentage of market share were often viewed as representing the difference between success and failure.

No Globalization Over the years, Toyota had evolved into a global firm. In 1993, a considerable part of the firm’s overseas markets were serviced by local subsidiaries that frequently designed and manufactured automobiles for local markets. For example, local plants produced almost one-third of the vehicles sold in the North American market. These vehicles were produced in three plants, one in Kentucky, another in Ontario, Canada, and the New United Motor Manufacturing Inc. (MINIMUM) Joint venture plant with General Motors.

These plants produced approximately 400,000 vehicles per annum, including 220,000 Camera, 170,000 Corollas, and the remainder being pickup trucks. Production volumes for pickup trucks were expected to increase to approximately 100,000 in the next Professor Robin Cooper of the Peter F. Trucker Graduate Management Center at The Claremont Graduate School and Professor Take Tanana of Tokyo Aziza University prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

Copyright 1997 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or write Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means-?electronic, mechanical, photocopying, recording, or otherwise-?without the permission of Harvard Business School. This document is authorized for use only by Lingua Wang at Chinese University of Hong Kong until May 2013.

Copying or posting is an infringement of copyright. Permissions@hbsp. Harvard. Du or 617. 783. 7860. 197-031 few years. In 1994, the firm expected to begin exporting vehicles from North America to markets such as Japan and Taiwan. In addition to automobiles, the firm also manufactured and sold forklifts. Toyota controlled 70% of the forklift market in the United States. The same commitment to local manufacture and control was apparent in Toast’s other major overseas markets. In Europe, two new UK plants began producing to reach 100,000 by 1995 and 200,000 units before the end of the century.

Altogether, Toyota vehicles were either manufactured or assembled in more than 20 nations. These local manufacturing facilities provided Jobs for nationals and business for local supplier firms. The relative importance of the international supplier business to Toyota was increasing. In 1992, for example, Toyota purchased locally approximately 70% of its parts requirements (or $5 billion) for its North American operations. The other 30% was imported from Japan, but this percentage was expected to decrease over time. By 1994, Toyota expected to purchase $6. Billion of parts from local suppliers worldwide and import $2. 9 billion for domestic use. Supplier Relationships Product design was also international in scope. Salty Research, Inc. , a Toyota subsidiary formed in California in October 1973, was responsible for the body styling ND interiors of new models scheduled for production in North America. The design styling for European markets was coordinated from the firm’s design and technical centers located in Brussels. Third-party suppliers were responsible for approximately 70% of Toast’s parts and materials.

In particular, the cost and quality of third-party supplied parts was considered critical to the firm’s success. In recent years, Toast’s expansion into international production had required increased interaction with non-Japanese suppliers to raise their efficiency and quality to the same level as that of Toast’s Japanese suppliers. Etc To help non-Japanese supplier firms manufacture acceptable parts, Toyota had developed programs to transfer Japanese manufacturing techniques. At the heart of these so-called design-in programs was Joint work by suppliers and Toyota engineers on new components.

This Joint work began in the early stages of the vehicle- development process, because prospective suppliers cited a lack of involvement in the early stages of vehicle design as an obstacle to winning business in highballs components. In a typical design-in program, several designers competed for a part interact; the firms were evaluated on the prices bid, the technology applied, and their performance. The winning firm was granted a contract for the life of the model. When the next model was developed the contract was once again thrown open for bidding.

By 1993, more than 120 U. S. Suppliers had participated in design-in programs and firms were involved in such programs but had yet to sign contracts for parts. A similar program was in place in Europe. Toyota engineers also helped its overseas suppliers to adopt the Toyota Production System. Many Toyota overseas suppliers had now successfully implemented modified erosion of the Toyota Production System. The system contained four key elements: just-in-time production, Kanata, total quality management, and multi-functional work teams.

Just-in-time production avoided the build up of excessive work-in-process inventories and increased the firm’s ability to respond quickly to customer demands. Kanata was the driving force behind KIT, tying production closely to customer demand. Total quality management ensured high-quality products and minimized the risk that the reduced levels of inventories would lead to stock-outs because of poor-quality components. Finally, multi-functional workers, capable of performing several tasks, dealt with the increased complexity of the production process. 2 Cost Planning Cost planning at Toyota worked to reduce product costs at the design stage.

Toyota first set its cost planning goals and then set out to achieve those goals through aggressive design changes. To correctly assess the gains made, the exact amount of cost reduction achieved through design changes was estimated after excluding all other factors that affected costs, such as increases in material and labor prices. The measurement process started with cost tables that helped engineers estimate he current cost of existing models. These cost tables were kept up-to-date for changes in material prices, labor rates, and production volume levels.

The updated production volumes helped determine both depreciation and overhead charges that would be allocated to the new model. Comparison of this estimated cost to the vehicle’s target cost gave the desired level of savings, or cost-planning goal, as it was called. At the profit-estimation stage, also referred to as the “target cost-setting stage,” Toyota calculated the differences between the costs of the new and current models, strutted the appropriate portion of the cost-reduction goal to the design divisions, and then assessed the results.

Profit targets for the life of the new model were also calculated as differences between estimates and targets. This process constituted the essence of budget control at Toyota. Toyota clearly specified cost reduction goals for each control unit to ensure that the company’s overall goals were attained. Target Costing Toyota invented its target costing approach in 1959. Although many major manufacturers in Japan use target costing, Toast’s system is the oldest and insider by many the most technically advanced.

While the idea of systematic cost reduction had existed at Toyota since it was founded, the process was first codified in the mid-sass, when the firm set itself the objective of producing a $1,000 car. Existing cost estimation played a role in target costing, but there are differences between the two. First, cost estimates relied upon existing standards while target costs were adjusted for any future savings due to design changes. Second, cost estimates had a horizon of six months while the horizon for target costs was the time engaging until the launch of the new product.

Target costing brought the target cost and the estimated cost of a product into line by better specification and design. Toast’s target costing system was designed not simply to estimate the cost of new products but to enable a product to attain its profit targets throughout its life. Product Planning Toyota used two broad categories of product development, one for completely new types of automobiles and the other for changes to existing models. The development of an entirely new model, such as the Lexus, was relatively unusual.

Most of the reduce development projects focused on modifications to existing models. Japanese passenger cars usually underwent major model changes every four years. However, recent industry trends suggested that the period between full model changes may The firm used target costing primarily to support model changes, though the same general cost control procedures were applied to the design of entirely new vehicles. Cost estimates for new vehicles involved a greater degree of uncertainty than for model changes. 3 A model change began with a proposal from chief engineers for development of a new model.

The proposal usually included: Specifications such as size (length, width, wheelbase, and interior space), weight, mileage, engine (type, displacement, and maximum power), transmission (gear and moderation ratios), chassis (suspension and brake types), and body components; Development budget; Development schedule; and Retail price and sales targets. New models basically maintained the same product concept as their predecessors. Styling was not specified at this stage; usually no more than a vague image was mentioned. Most of the cost incurred in any model change was for prototyping. Retail Prices and Sales Targets oodles.

The retail price remained the same unless a change in function or performance altered the perceived value of the vehicle in the eyes of the customer. In theory, therefore, prices changed as the perceived value of the vehicle changed. Formula for List Price of a New Model The selling price of a new car model was composed of the selling price of the equivalent existing model plus any incremental value due to improved functionality. For example, adding air conditioning to the standard version of a model would increase its price by the value of air conditioning as perceived by customers.

The incremental value of a new model was determined by analyzing market conditions. Because the automotive industry was mature, most new features already existed in some form on other models. For example, if air conditioning was to be included in the standard version, its added value was determined using the list price of optional air conditioners for other models. In the unlikely event that no equivalent option existed, then the firm’s design engineers and market specialists would estimate how much customers were willing to pay for the added feature.

The price increase for an added function did not always equal its selling price as a attendant option. The incremental price for an increase in functionality might be lowered because of the firm’s strategy for the vehicle and because of competitors’ pricing strategies. As functions were added to the standard version, Toyota increased the selling price until it reached the upper limit for that class of vehicle. When this limit was reached, the only potential benefit from adding functionality was increased sales.

Because new models were introduced some four years after the design project began, Toyota delayed setting the functionality of the standard version as long as possible. Therefore, the target price and margin for a new model, and thus the associated target unit price, were set quite some time before product launch. The exact functionality of the standard version was set only when factors such as competitive offerings, foreign exchange rates, and user demand were better understood. Changing the functionality of the standard version increased the probability that the new model would achieve its 4 desired level of profitability.

Similarly, the actual selling price was not fixed until Just before product launch. Delaying these two critical decisions reduced significantly the uncertainty faced by the firm. For example, suppose the incremental value assigned to an air bag in the US market was $450 but the competition had set it at $700. In this case, Toyota might increase its price by the difference. Similarly, if the competitive prices were lower, Toyota would drop its prices to match. The sales division proposed anticipated production volumes based upon past sales levels, market trends, and competitors’ product offerings.

The sales division typically proposed a figure that was considered safe (I. E. , achievable), based upon the model’s current sales level. Optimism was restrained in favor of realistic goals. Development Plan Assisted by engineers in the design, test-production, and technical divisions, a chief engineer drafted the development plan for the new model and then led the development project. Well over a hundred engineers from the various divisions worked with a chief engineer on a typical project, but since they belonged to different divisions, probably only about a dozen people reported directly to the chief engineer.

In this sense, the chief engineer was more a project leader than a supervisor of product development. The chief engineer coordinated the design process at the design divisions, which were relatively autonomous; the chief engineer was expected to develop a “concept” for the new vehicle that pned multiple design divisions. Toyota considered the tensions created by this matrix approach beneficial to the creative design process and worth any conflict that might arise. Toyota set the cost-planning goal based upon the product plan and the targets for the product’s retail price and production volume.

Because an estimated price had the expected profit from product sales over its production life (usually, four years). The product’s target cost was the unit cost upon which the profit target was based. Calculating Target Profit and Target Cost Toyota calculated the lifetime target profit for a product, such as the Celiac, by multiplying the target sales volume by the model’s return on sales (or, as it was known at Toyota, profit ratio of sales). Toyota set the sales profit ratio with reference to the corporation’s long-term target profit ratio.

Estimated cost was determined from the firm’s cost tables. Estimated profit was calculated using this figure. Estimated profit was less than the target profit because the target cost included the estimated cost savings due to value engineering and other cost reduction activities. The difference between target and estimated profit was the amount to be cut from costs through cost planning. The cost-planning goal was obtained by subtracting the estimated total profits from the target profits.

The goal of cost planning was to determine the unit profit needed to achieve the profit target, and thus the amount to be trimmed from the new product’s cost through cost planning activities. Estimated profit equaled the retail price minus the estimated cost per unit times the production volume. As cost reduction activities were implemented, the product’s estimated costs decreased. If the goal was achieved, the target cost and expected cost became equal, as did the expected and target profits. Estimating Difference Costs Rather than adding together all of the costs for a new model, Toyota added the determined at the major function level. Thus, cost planning could begin even before blueprints for the first test model were drawn. Also, estimating the total difference instead of the total cost tended to be more accurate because the typical new model was heavily based upon existing designs. Trying to estimate the cost of a new vehicle from scratch would, in management’s opinion, introduce more errors than using existing data and modifying it accordingly. And it helped the related divisions understand cost fluctuations. The approach was more helpful to the design divisions because it highlighted the areas of the new model that were different from existing designs. New designs required most of the work in the design divisions. Thus, the estimated cost of a new model was the cost of the current model plus the cost of any design change. Thus, for every increment in the functionality of a new del there was an estimated incremental price and cost.

This approach allowed the firm to measure the incremental profitability of each new function it built into a new model. A full model change required many design modifications. Consequently, the cost of the design change was broken out into the costs of a number of different design modifications. The design team analyzed each modification and assigned it an estimated cost. The sum of these cost estimates had to equal the cost planning goals for the new model. Estimating differences helped clarify the cost-planning goal and wowed accurately how much was accomplished through cost planning.

Cost planning focused on new model design. Its effectiveness was measured as the amount of cost reduction achieved through design. Therefore, other factors that affected cost, including wages and fluctuations in indirect costs incurred by related divisions, had to be eliminated from overall cost reduction in order to identify the portion due to cost planning. By fixing the cost of the current model and calculating the differences between the current and new models, Toast’s system dealt only with cost changes resulting from changes in design and production volume.

Without actual drawings for the new model, the estimate often began with Just an idea. Since rough sketches provided by the design division were often the only sources of information, estimates were made under the guidance of the cost planning division rather than the accounting division. Toast’s 20 design divisions designed each major function of the new vehicle, including the engine, transmission, air conditioner, and audio system Because the people at the design and cost planning divisions had the latest in-house

Vertical roller mill occupies an essential place from the non-ferrous metal production, and this kind of tools is utilized to sinter and roast ore, ore concentrate and intermediate merchandise. The dimension with the kiln is among the primary indicators to present its production capability. With all the vigorous improvement with the non-ferrous metallurgy sector in China, far more and more vertical roller mills and larger and greater specifications are desired. The initial step of metallurgy should be to create aluminum oxide.

In alumina oxide production with sintering process, we need to first create the raw materials compounded by bauxite, limestone and alkali into clinker. The sintering process is completed within the vertical roller mill whose inner temperature is 1300;C. The final phase of aluminum oxide manufacturing is to roast aluminum hydroxide into alumina oxide. The inner temperature is about There really are a good deal of wastes in aluminum production – red mud, that’s primarily applied to produce the red mud moment.

So there’s generally a large-scale red mud cement plant near alumina oxide manufacturing producer with sintering process. The vertical roller mill is the primary products to sinter cement clinker and has become widely used in cement, metallurgy and chemical marketplace. This vertical roller mill is largely composed of rotary physique, supporting gadget, belt wheel, transmission device, movable kiln head, sealing device, burning gadget, and so on and has rewards like basic construction, beatable functioning and controllable processing.

Additionally It Is utilized to sinter clay, limestone and slang. In the non-ferrous and ferrous metallurgy, the vertical roller mill is adopted to sinter resources like Iron, aluminum, copper, zinc, tin, nickel, tungsten, chromium, file, and so forth. By way of example, we will sinter aluminum hydroxide Into alumina oxide and generate pellet ore for blast furnace Rainmaking. In the vertical roller mill system, we are able to use vertical roller mill to conduct generating roast to lean Iron ore and make It modify from weak magnetic to sturdy magnetic, which Is helpful for magnetic separating.

In environmental protection process, we will use vertical roller mill to Incinerate the unsafe wastes and recognize their harmlessness and recycle. Http://www. Slaughterer. Com/products/grandly- mill/lump-alternate-vertical-roller-mill. HTML The Wider Application of vertical roller mill in Nonferrous Metallurgy By Livingston reputable functioning and controllable processing.

Additionally it is utilized to sinter ill is adopted to sinter resources like iron, aluminum, copper, zinc, tin, nickel, hydroxide into alumina oxide and generate pellet ore for blast furnace rainmaking. Magnetized roast to lean iron ore and make it modify from weak magnetic to sturdy magnetic, which is helpful for magnetic separating. In environmental protection process, we will use vertical roller mill to incinerate the unsafe wastes and recognize their harmlessness and recycle.

Henry Ford Henry Ford was one of America’s greatest businessperson, the founder of Ford Motor Company and the man largely responsible for mass production in the American economy. This achievement led Ford to becoming a rich and famous man. Ever since Ford was a child, he had a dream to become an engineer and to manufacture cars. He began to pursue his dream when he Introduced the Assembly line, by breaking down production into simple tasks. He lowered the skill level needed to work in a factory, which allowed enormous amounts of products to be produced at lower prices.

During the sass’s, Henry Ford’s management skills and leadership of The Ford Motor Company expanded the economy by making cars available to all Americans and stimulating industries related to the automobile empire. One way Henry Ford expanded the economy was by making automobiles available to all Americans. His Motor Company helped him produce and manufacture tons of cars. In order to get his company running, he had to pay employees at a lower rate, but also made sure they were paid enough so expenses were affordable. The automobiles made Its Impact felt first In rural areas where cars were used for oaring.

They were also used for pastime on the weekends and soon enough the cars were replacing existing transit that brought people to and from work in urban areas (Melodies). Automobiles spurred over many areas, but rural areas were first because of all the activities happening on the weekends. As well as, the number of people who used automobiles to get to and from work. As a matter of fact, “the convenience of the automobile freed people from the need to live near rail lines or stations; they could choose locations almost anywhere in an urban area, as long as roads were available to connect them to other places” ( History of Automobile).

The automobile allowed people to live wherever they chose to rather than living in a specific area, Just so they could get to work or travel places. “As automobile sales increased, the demand for fuel led to a more systematic way of delivery, and In 1914, Standard 011 of California opened a chain of 34 standardized stations among the West Coast” (Melodies). This is implying that the demand for fuel allowed the automobile companies produce more so that they could get more consumers and increase the assure for all Americans.

In fact, “three hundred men were now employed by the Ford Motor Company, and they were making twenty-five cars a day, and the company was supplying a sales force of 450 agencies across the continent” ( Titlists). The more men meant that more cars were produced, and the more cars produced intended that more cars were available to the employees and any other Americans. Ford’s Company later “increased the production of cars by building several models offering different amenities be sold simultaneously at deferent prices, the company’s ratters hoped to maximize their profits by appealing to a large number of car buyers” (39).

By building more different models people had the option to choose what type of car they wanted to get. It also allowed an average American to decide whether to purchase a stylish car that less expensive, or a appealing car that was more class; however, with various models, even a simple car was made affordable by an average household. Overall, cars helped the workers and the Americans because it reduced the work they had to put into carrying parts to and from work and it allowed any people to live freely rather than living in an area where communication to work was accessible.

Another way Henry Ford expanded the economy was by stimulating industries related to the automobile empire. For example, “oil and steel were two well- established industries that received a serious boost by the demand for automobiles” (Age of the Automobile). Many industries like the oil and steel were increasing production for more automobiles being produced. During this automobile era, “manufacturing became a highly mechanized process in which mass manufacturing was performed by unskilled workers and the assembly line cut down on human handling, and machines were designed to handle multiple tasks”(Bianca).

In other words, quick development was a very important skill that unskilled workers had to master; however, this was made easy because a lot of the times machines did most of the work and the workers would have to put a little effort to make sure everything was right. This enabled Ford “to increase production from about 475 cars in a nine-hour day to more than 1,200 auto assemblies in an eight-hour day’ (Bianca). Due to more manufacturing of cars and more products of steel, rubber, and glass being created, Ford increased the production of the assembly lines.

Having raw materials such as rubber and steel available in the market, “more people would buy raw materials and products, which stimulated public spending throughout. ” This gave Ford a chance to another company called “The Ford Manufacturing Company, which was started to produce engines, running gears and other car parts” (Tilting, 41). Ford realized that in order for the cars to be perfect, he needed another company to aka all his cars stronger, so different industries with different productions parts were created to increase the production of automobiles even more.

Although Ford’s ultimate goal was to increase the production of automobile, he also focused on the efficiency of the automobiles. His major concern regarding the efficiency was “mainly towards the strength and reliability, knowing that the metal he was using for certain parts, such as the gears, was too brittle, so he looked out for a stronger kind of steel” (45). Ford knew that if his gears or any other car part broke, the car would be selves, so he wanted to guarantee that his car would be stronger and more efficient than anything else on the market.

Thus, Ford not only expanded the production of automobiles, but also other industries that played a major role in producing an automobile. Consequently, Henry Ford has played a huge leadership role because he made Americans lives better. He used many techniques that improved the economy. He did most of this by expanding his company so cars were available to Americans, and by stimulating public spending through many industries. The auto industry provided tit a large market of steel, rubber, glass and petroleum products.

All of which were available to consumers in the market at any time. Cars made exploration of the world outside easier and more affordable, which motivated public spending for good roads. His production line manufacturing was widely used for efficiency because before to work or other parts of the city. Many even traveled really far Just to get to work, because trains were mostly the means of transportation before the automobiles (Melodies). Shortly after the inventions of automobiles, the lives of many Americans hanged and the production of cars increased.

When the US construction industry grinded into an economic downturn, demand for Caterpillar products decreased. The major decrease in the US industry is the result of the completion of the interstates, giant dams, and other construction buildings. Hydraulic excavators are very big market. They accounted for 45 percent of the sales. They are the fast selling equipment that can create competition between the companies. Developing Nations played an important role in the competition, because the need for construction equipments increased to shape the new dams and especially to make roads.

The growth rates of developing nations were faster than the global demand so developing nations becomes the new market areas for competition. One of the biggest competitions takes place in the replacement parts sector. It is an essential part of the industry. Replacement parts made up together over a quarter of the total revenues of the total construction equipment industry. Also the sales of replacement parts are more profitable than the whole machines. Construction Companies competed to provide the best parts for the best needs. It is vital for companies to achieve an economies of scale to survive in the competition. To achieve economics of scale, companies try to capture a large market share in order to eliminate the low volume of global sales.

Distribution and service network is the essential part of the industry because the inability to operate the equipment is very expensive. To gain competitive advantage by selling parts, companies used a worldwide network of dealerships to sell their machines and provide support. Intense competition among the companies drove them to form alliances to share risks, to access new markets, use technology and share production. Oil prices are very important because decline in oil prices can depressed the market and could affect the competition directly.

Currency Fluctuations affects the industry as a whole. Rise in the value of dollar makes other countries buying power decrease, which results as an import to the country The imports will be much cheaper than the domestic products, therefore industry will shift to import from other countries. Strong currency is the prime factor for companies such as Caterpillar to have trouble while competing for developing countries. Cyclical Nature of the construction equipment could make an industry wide downturn for both domestic and international markets.

What were the sources of Caterpillar’s spectacular success up to the early 1980s?

The major reason of the spectacular success of Caterpillar up to the early 1980’s was the post-war years. Those were the times to reconstruct the countries that were destroyed in the wars. As a result Caterpillar products exploded during those times to rebuild Europe, build the US interstate highway system, erect the giant dams of the third world, and layout the major airports. Also Caterpillar Company followed some strategies during those times to differentiate itself from its competitors by producing reliable, high quality products and providing a fast delivery of replacement parts. As a result Caterpillar became the leader of the heavy construction equipment industry.

On the other and Caterpillar’s distribution and relationship with their dealers contributed to the company’s world wide success. The vision of Caterpillar for their deal network was very unique. Those dealers were self sustaining businesses who invest their own capital. They generally earn 100 percent of their revenues by selling and supporting Cat equipment. By doing those Caterpillar dealers remained in the hands of the same family and helped the company to make huge success.

What were the strategies introduced by Schaefer, Fites, and Barton to reduce the impact of cyclical downturns on Caterpillar’s results?

George Schaefer

• Global Outsourcing; Caterpillar sought to purchase parts and components from low cost suppliers, who maintained high quality standards. Under their new policy “shopping around the world,” they moved to outsource 80 percent of its parts and components.
• With the help of its branding program Caterpillar sold outsourced machines under its own name. Branding program helped the company to keep production costs down while taking a superior marketing organization advantage.
• As the demand for heavy equipment decreased Caterpillar needed to reevaluate its product mix and create a broader product line. Caterpillar started to sale light construction equipment. “Between 1984 and 1987, accordingly, Caterpillar doubled its product line from 150 to 300 models of equipment introducing many small machines that ranged from farm tractors to backhoe loaders.” They also started to market light weight vehicles to small scale owner operations and new contractors.
• Schaefer promoted open communication strategy, which resulted the free flow of ideas between officers, managers, and production workers.
• Also Schaefer launched the Employee Satisfaction Process (ESP), which helped the company to organize in work teams, met weekly with management and offered suggestions that helped to solve many critical aspects of the manufacturing process. The program resulted in productivity gains, quality improvements, and increased employee satisfaction.
• Schaefer also launched a plant modernization program with just in time inventory method. This led the company to have computerized tools, and flexible manufacturing systems. They also changed the traditional manufacturing process system called “batch”. Unlike in batch systems assembly lines provided complete model production and helped the company to achieve high level of work in progress.
• Correcting the assembly mistakes Caterpillar reconfigured the layout of its manufacturing system into flexible work cells. Workers used computerized machine tools to perform several manufacturing steps.
• As general Schaefer reemerged the company as a lean, technological, flexible, and competitive global company. He increased the company shares up to 7 percent, while increased the revenues by 66 percent,

Donald Fites

• Fites turned the company into a utilizing integrated approach based, Japanese style company. He also wanted to bring Caterpillar’s labor relations to the Japanese model, because Japanese unions are company based organizations.
• He also looked deeply into the customer needs, because global pricing decisions center didn’t have a broad knowledge about the local market conditions around the world. He delegated district offices authority to set prices which helped him to push responsibility down the chain of command to the lowest possible level.
• He applied the same principle to Caterpillar’s entire structure, developing a company wide reorganization plan under Schaefer’s direction. Caterpillar’s old organization structure was only suitable in US, but as the company expanded globally the limitations of such structure become apparent.
• Fites broke the company into 17 semi-autonomous divisions in order to operate necessarily and t gain the company flexibility. He then required each division to have 15 percent rate of return, on the other hand he threatened to penalize any division that fell behind. This helped the company to increase their profits and give them maximum flexibility.
• In addition to all those, Fites developed a new plan, which based all of its incentive compensation schemes on return on assets. As traditionally Caterpillar managers were paid in proportion to the size of the budget they controlled, or the number of employees they supervised. Also all funding, and R&D activities that controlled by each division helped the company to be more customer driven than at any other period in past.
• New organization plan affected the company’s distribution network as well. With the help of new divisions, dealers seeking help could contact them easily. The importance of this structure was the interaction between Caterpillar’s managers and dealers increased. It also enabled the company and dealers to have closer relationships to each other. According to Fites Caterpillar’s distribution system was the company’s single greatest advantage over it’s competitors.
• Another strategy for Caterpillar was to protect its dealers against failure. Caterpillar assisted individual dealers who were subject to intense price competition. To help those dealers Caterpillar reduced prices even sometimes reduced the dealer’s costs, and sometimes they launched a promotion campaign. All those helped the company to sell more vehicles and create sustainability when other dealers went out of business during the recession.
• Not only they helped their dealers but also they introduced “Partners in Quality” program to have quality discussions, which links personnel at Caterpillar plants and dealerships. This helped the company to have strong personal business ties with the dealers.
• Fites invested to upgrade the Caterpillar’s worldwide computer network. It helped Caterpillar to link together all factories, suppliers, sealers, distribution channels and customers. With the help of this system Caterpillar guaranteed 48 hours delivery of parts anywhere in the world. Caterpillar provided the most comprehensive and fastest part delivery system in the industry. Also electronic alert system developed under Fites. This system designed to monitor machines remotely identify parts, which needed to be replaced, and replace them before they failed. This helped the company to repair the machines before they broke down. They saved repair costs, it also provided to Caterpillar reduce their inventory costs.
• Fites expanded the products of the company. Caterpillar entered a total of 38 mergers and joint venture agreements. Caterpillar sold engines separately and accounted for 35 percent of Caterpillar’s revenues. This is a very big market and Caterpillar engines powered one third of the big trucks in the United States.
• Fites wanted to reject the collective bargaining agreement, because the labor costs are very high and they were cutting the company’s global competitiveness. The labor prices were very high and Caterpillar was heavily depended on the export of domestically manufactured products. After he rejected the agreement union went to strike. But Fites forecasted the strike and he built up enough inventory to supply customers for about six months.
• Fites was a very successful CEO; he trained managers and office workers to operate factory machinery, when the strike happened again he was prepared again. His ability to see the answer before the question earned company lots of money.
• At last he got what he wanted. He signed a contract with the union allowing Caterpillar to introduce two tier wage system and pay new employees 70 percent of the starting union scale. The contract also provided more flexible schedule format allowing management to keep employees on the job longer than eight hours. The contract also enabled company to hire temporary employees without the approval of the union.
• Fites wanted to have good relationship with the union because incase of an economic downturn and an recession he wanted to have a smooth workforce.

Glen Barton

• He believed that the downturn of the US market could be eliminated by an upturn in the international market.
• He increased sales of Caterpillars equipment to the developing nations such as Asia, Latin America, and Eastern Europe. By doing this he created new markets for the company.
• He made non truck engines incase of a decline in the truck engines. Such diversification enabled the company to produce engines even the truck engine part offset.
• Under the leadership of Barton, Caterpillar started to sell mobile power modules.
• Caterpillar started to rent business equipment. Barton made efforts to make dealers diversify into rentals. As successful as it is the rental distribution segment of the fastest growing segment.
• He also used joint ventures to expand into new markets, and he was very successful. He formed joint ventures with Daimler Chrysler and started to produce medium duty engines. He also started to manufacture fuel systems. Those fuel systems were designed to increase efficiency of diesel engines and thereby reduce diesel emissions.

The collection of ‘Construction Material’ market research reports has a new addition of “Wood-plastic Composite & Plastic Lumber to 2018” on Aromatherapies. Com. US demand to Jump more than% annually US demand for wood-plastic composite and plastic lumber Is expected to Increase four billion pounds of plastic. A rebound In new housing completions from the low 2013 level and gains In residential Improvement and repair expenditures will generate Increases In demand. Demand gains will also be boosted by Increased market penetration In decking applications, the predominant use for composite and plastic lumber.

Decking to remain key application Decking applications will account for more than two-fifths of composite and plastic lumber demand by 2018. Homeowners will increasingly choose decks made from alternative lumber because it has greater resistance to degradation by moisture, changes in humidity, insect attack, and time, and because it requires minimal maintenance over its long service life. Ongoing changes to manufacturing technologies that will improve the color-fade resistance and the resemblance to natural wood, particularly expensive hardwoods such as pipe and redwood, will further boost composite and plastic decking demand.

Further gains will result from efforts by manufacturers to increase the scope of decking accessories offered. Among other applications, molding and trim applications are also expected to advance at a strong pace through 2018. Wood-plastic composite and plastic lumber use in molding and trim will benefit from renewed housing activity and performance characteristics ” such as resistance to moisture and ease of shaping ” that are superior to those of lumber and engineered wood. Request Sample copy of this report @ http://www. Aromatherapies. Mom/contacts/ request-sample? Rename=184223 . Wood-plastic composite lumber to outpace plastic Increases In overall construction actually will support demand gains for both types of alternative lumber through 2018, but wood-plastic composite demand will rise at a quicker pace than demand for plastic lumber, albeit from a smaller base. As nearly two-thirds of composite and plastic lumber demand Is generated by the residential market, expansion in that market will boost composite lumber demand. In large, increasingly preferred to plastic lumber.

Several factors will support its rapid growth. For instance, composite lumber includes celluloses fibers and is better able to assemble the look and texture of traditional wood, an appealing trait to consumers looking for attractive but low maintenance decks. Furthermore, because composite lumber frequently is manufactured using recycled materials ” including consumable plastic such as grocery bags and stretch film, and wood scraps from mills and other lumber operations ” it is often marketed as an environmentally friendly building material.

Company Profiles Profiles for US industry competitors such as Axial, CAP International, Fiber, Headwaters & Tree Read more on “Wood-plastic Composite & Plastic Lumber to 2018″report below. Additional Information This study examines the US market for two types of materials serving as alternatives to wood in construction: composites of cellulose fiber and plastic ” referred to in the study as “wood-plastic composite lumber” or “composites” ” and plastic resins ” referred to as “plastic lumber. Both materials are manufactured using techniques ” primarily extrusion but also injection molding ” common to the plastics industry. Applications for these materials covered in this study include decking, molding and trim, fencing, landscaping and outdoor products, windows, doors, and assorted applications such as spa cabinets, marine decks, and railroad ties.

This study does not address applications for plastic lumber in which plastics (primarily vinyl) are not in competition with wood or in which they have already attained substantial market share. Applications falling under these categories include plastic siding, extruded plastic windows and doors, plastic playground equipment not competing with traditional lumber, vinyl patio furniture, and vinyl flooring. Cellulose-resin products, such as plywood, starboard, and oriented strand board, are also excluded from demand considerations for composite lumber.