Flexibility in the Production Output
100 words reply agree or disagree to each questions
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Flexibility in the production output can be a crucial component in the success of manufacturer. An automotive manufacturer that can produce only one vehicle type in a factory, without weeks, or months to retool is limited in their ability to respond to changing demand. If demand moves from one model, a traditional manufacturer can not respond and must continue to build the model the factory was designed for. This manufacturer will be left with vehicles that cannot be sold at their intended price. Dealers will not be willing to purchase the vehicles and have them sitting on the lot or being required to discount the vehicle to sell them.Flexibility in the Production Output
Honda’s ability to retool a plant in minutes gives them the ability to respond to market changes, but also allows the optimization of output. It would be possible for Honda to optimize production on a daily basis to fill existing orders, or short-term projections, rather than responding to long-term projections that may change. The manufacturer and individual dealers finance their inventory, by altering production to meet current needs, both levels can reduce the finance charges associated with unsold inventory. Optimizing production also maximizes the utilization of raw materials, labor and transportation costs. It is no longer necessary to store and transport vehicles that can not be sold immediately.Flexibility in the Production Output
Linebaugh, K. (2008, Sep 23). Honda’s flexible plants provide edge; company can rejigger vehicle output to match consumer demand faster than its rivals. Wall Street Journal Retrieved from https://www-proquest-com.ezproxy1.apus.edu/newspapers/hondas-flexible-plants-provide-edge-company-can/docview/399105360/se-2?accountid=8289
As someone who lives in metro Detroit, auto manufacturing is almost a part of the culture so I found this weeks WSJ read to be particularly interesting.The production process refers to the way in which a firm allocates its resources and inputs to create optimal production outputs. There are many things to consider throughout the production process including unforeseen economic factors. This is the case for automotive manufacturing company Honda, that realized profits during a period of economic turmoil where competitors were struggling to keep up.
Honda invested in flexible manufacturing technology that significantly increased the efficiencies of its production process (Linebaugh, 2008). New manufacturing technology has resulted in the seamless transition of production machines to create a variety of vehicle models at an outstanding pace. The robotic engineering concept of production robots that can produce any vehicle model by utilizing interchangeable attachments has allowed Honda to better react to market changes than its competitors like Ford and Toyota (Linebaugh, 2008). By engineering its vehicles to be manufactured following the same process, Honda has realized further efficiencies in its production process. This has eliminated a considerable amount of precious time and resources on developing unique manufacturing processes for each new vehicle model. By not only cutting such a significant cost, Honda now has the ability to better meet demand and thus achieve a higher profit.Flexibility in the Production Output
The flexibility to meet fast changing demand is clear as Honda used this manufacturing strategy to their advantage during the economic crisis of 2008. As people were falling on hard financial times and the price of gas had exceeded $4/gallon, Honda was easily able to shift its production outputs to more compact and fuel efficient cars. A flexible manufacturing plant has also allowed Honda to adjust its production based on demand in certain locations. When factors of production fluctuate, market demand must still be met. Honda’s significant market presence and flexible automotive manufacturing innovation has certainly realized optimal production and forced its competitors to do the same.
Linebaugh, K. (2008, September 23). Honda’s Flexible Plants Provide Edge. https://www-proquest-com.ezproxy2.apus.edu/docview/399105360/CFAF8B96BD6B4C1APQ/61?accountid=8289.
Flexibility in the Production Output