Results performance defects or unit costs per day

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Unformatted text preview: red by Budget Variances and Quantitative Results Performance (Defects or Unit Costs per Day, Week or Month), not Quality Standards Quality 11 MASS PRODUCTION MASS PRODUCTION Low Product Variety; Small Orders Not Feasible Specialized Machinery and Centralized Manufacturing “Economies of Scale” – High-Speed Sequential Economies Production Production Development Costs Spread Over Large Volume: Development Low Cost per Unit Produced Low Low-Skill/Low-Wage Work Force Large Advertising and Marketing Budgets 12 FORD WORKING CONDITIONS FORD WORKING CONDITIONS Monotony of Assembly Line Work: 300% Turnover Monotony $2 per Day and a 9-Hour Shift Ford’s Response to Working Conditions Dilemma IIncrease Pay to $5 per Day and ncrease Reduce Shifts from 9 Hours to 8 Hours Reduce “The Chain System you have is a Slave Driver. My The God, Mr. Ford! My Husband has come Home and Thrown Himself Down and won’t Eat his Supper, He’s so done out. Can’t it be Remedied? That $5-a-day is a Blessing; a Bigger One than you Know. But, Oh, They Earn It!” Earn - Wife of Ford Assembly Line Worker 13 MASS PRODUCTION MASS PRODUCTION Flaws of Mass Production Approach Production Levels cannot Stop or Slow: Production outside Production (Added Costs of Rework) (Added Long Changeover Times limits Product Variety Erratic Finished Products Inventory Levels Erratic Defects resolved Incentives and 0% Financing 14 MASS PRODUCTION MASS PRODUCTION Market Orientation Flaw 15 TOYOTA’S ORIGINS Toyoda Automated Loom Works 1902 Modification: Loom Stopped 1902 Automatically if Thread Broke or Spool Empty - Signal for Attention Empty Result: No Waste from Defective Work Result: and Lower Production Costs and 16 TOYOTA’S ORIGINS During WWII, Toyoda became Toyota and manufactured Motorcycles and Delivery Trucks After WWII, Japanese Industry needed to re-build 17 TOYOTA’S ORIGINS 1956 – Taiichi Ohno went to US to study Ford’s Manufacturing Facilities Found Mass Production Principles not Applicable: Scale of Japanese Markets Desire for Product Variety Unable to Afford Resources and Inventories 18 TOYOTA’S ORIGINS Before returning to Japan, Ohno went to an American Grocery Store Discovered Production and Operation Methods that Were Linked to Customer Actions: Inventories Replenished by Sales (“PULL” Strategy) Delivered Product Variety and Scale Minimized Waste 19 TOYOTA’S ORIGINS E...
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This document was uploaded on 02/19/2014 for the course ENTC 5010 at East Tennessee State University.

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