September 28th, 2018
Total Cost Minimization
The world today is a very technologically advanced planet. From laptops getting smaller and their processors getting faster to automobiles soon turning completely electric. All these innovations are made possible by engineers. However, engineers are also the reason why these expensive products have only decreased in price over time while technology has been improving. The decrease in price is because engineers help companies mass produce products by finding ways to achieve total cost minimization even in high cost economies. Engineers help these companies by designing production methods that increase efficiency. The most common method is the practice of the assembly line, which was designed by a man named Henry Ford and is widely known as the greatest technological advancement of the twentieth century.
Total cost minimization is very important to engineers in high cost economies because over the last century, all aspects of the manufacturing process have drastically increased in price. From labour, rent, insurance and other factors. The prices of labour in todays society have sky rocketed with the minimum wage in Canada currently at fourteen dollars per hour (Ontario.gov.ca). Due to this, the risk of many products increasing in price is at large. The price of transporting goods from factories to stores has also increased in price due to the cost of fuel growing. This has caused companies to re-think their manufacturing process. Due to these factors it is common for companies to move their production out of high cost economies and into third world countries, where the operating costs are much lower. Common
third world countries companies move production to according to James C. W. Ahiakpor of the Action Institute is “China, Kenya and a Hong Kong.” The reason for this is the profit margin being made in these expensive areas is much too low, due to the expensive overhead. However, the main issue engineers have with the outsourcing of production is that it often leads to workers in other countries being treated poorly due to unfair pay, unsafe working conditions and many other negative factors. As well, often the safety standards in the manufacturing process in other countries are not equivalent to safety standards in first world countries making safety a large concern that the products being assembled overseas will not meet certain safety standards. This can be due to using cheaper material that can break apart and infants could potentially swallow, or the cross contamination of certain food products. Though, engineers stop companies from going against their business ethics by providing companies with ethical options to keep production costs at a minimum. Engineers use the procedure of the assembly line to prove to companies that there is no need to outsource production
Mass production using an assembly line was first introduced by a man named Henry Ford. He used manufacturing engineering to reduce the price of cars in the early 1900’s. Ford had a vision to creating automobiles that were more affordable to the average American in the early 1900’s. This was because the cost of owning and buying an automobile at those times was extremely expensive due to the amount of inefficiencies in the building process. The automotive factories at that time relied heavily on skilled labour, because there was not much of a need for unskilled workers due to the fact there was not much technology behind the production, meaning each bolt had to be put on with the specific specifications by a skilled mechanic. In those days there was not yet precise machines that could tighten bolts with the specific torque needed to correctly build the vehicle. Due to the need for skilled labour, the salaries for the people working on the production line was very high. The high salaries for the skilled workers reflected directly in the price of the cars. However, Ford saw that there had to be a better way to make the
manufacturing process much more efficient and require less skilled labour. After using the trial and error method, Henry concluded that when people are working in a line with each other, much more can get done. Ford’s company operated with people working in a line with each other for a few months until, it was realized that the major inefficiency in production was that workers were walking much to far of a distance to get parts from one station of assembly to the next, and this was taking a lot of time. The way Henry reacted to this issue would be how lives would forever change. Henry innovated the method of people working in a line to assemble parts with conveyor belts. The purpose of the conveyor belt was to have the parts come to the workers instead of the workers going to pick up the individual parts. The use of the conveyor belt proved that each worker had no excuse to leave their work station because all the parts that were needed would come directly to them. Shortly after Ford implemented automated tools and machines into the production line, this allowed him to hire cheaper unskilled labourers to do the same work as a skilled mechanic. When Henry implemented the conveyor along the assembly line with automation to achieve mass production in “1913 the price for the Model T plummeted from $825 to just $290.” (Wiley.com) This was obviously a drastic price reduction, which made for people all over the world to be able to finally afford to own an automobile.
The assembly line first used by Henry Ford in the early 1900’s never lost its significance. In fact, the idea of mass production using assembly lines is used more than ever in todays age. From vehicles to computers and cell phones, all these items are mass produced and therefore become affordable to people in today’s society. The practice of mass production has allowed the way people learn and store information extremely easier by making laptops, computers and cellphones much cheaper. The way society relies on technology is very important, without affordable computers and cell phones many would not be able to afford attending school because the use of technology is relied on heavily in todays curriculum. The way engineers have been able to innovate and mass produce so many products for
reasonable prices is by using different assembly line procedures to mass produce specific objects. For example, in the auto manufacturing industry the use of automated welding and specialty tools than can tighten bolts to the exact torque spec have come into play cutting overall cost of production down. As well along production lines that make cell phones and computers, engineers have designed machines that can accurately wire and assemble items at a much faster and more accurate rate than humans ever could.
The assembly line is the most significant technological innovation of the twentieth century, with the increasing price in most economies around the world. The cost of production is set to rise, due to the increase in economies, the price of labour, materials and location costs. Due to the increase in the cost of production, the price in which consumers purchase these products will increase as well. If prices go too high, consumers will not be able to afford everyday essentials or extra luxuries. This problem can have a direct effect on the companies and people of society because companies will not be able to produce the consumer demands for these products. The assembly line allows companies to produce large amount of quantities at a faster rate, using less human labour therefore decreasing the overall price of the product. Due to the increase in human labour in the past few years, companies have had to rely heavily on the use of robotic technologies. The robotic technologies allow for better accuracy than humans due to the natural occurrence of human error. Also, the robots/machines can be programmed to work when companies want, and don’t require wages and labour laws do not apply for machines. Therefore, if a company automates most of their production methods they can produce products cheaper making the amount they sell for in store significantly less. The assembly line is very important to society today because with the current population growing, we need access to large quantities of products at reasonable prices. If this were not the case, poverty would be an even larger problem then it currently is in todays society because most people will not be able to afford to support their families if products were exponentially increasing.
However, a problem most people in the twentieth century society have with factories turning to automated production methods is the decrease in jobs due to the machines being able to produce much more than humans could produce and with greater accuracy. Though, the total opposite is the outcome of automated production. This is because the machines require maintenance teams to ensure they run efficiently without the risk of a breakdown which would stop or reduce production. This means skilled technicians are needed to look after the machines which requires a certification, leading to better pay and benefits. In todays society there is no shortage of work for factory machine technicians. As well, people with technician certifications are much more employable in todays every growing society that requires some sort of education to get a good stable job, ensuring a better life for their families giving them more opportunities. As well, the importance of mass production and the assembly line will be crucial to society in the coming years, especially with the increase in population the world will be faced with by twenty-fifty. The rate at which companies will be expected to produce at will be exponential, however to keep up with the demand and keep the costs of these products reasonable will be a challenge. Engineers must continue to innovate current procedures in the way companies produce items, with a goal that with the more items produced the less the items will cost.
In conclusion, the invention and innovation of the assembly line has changed the lives of society forever. Through the practice of mass production, engineers will continue to innovate ways to manufacture products by incorporating more automation and robotics, the more assembly lines in our society. The more jobs there will be for skilled technicians to maintain all this automation. As well, if engineers can keep designing efficient practice for companies will continue to keep production in high
cost economies, instead of relying on cheaper countries to produce products for cheaper, but without the proper business ethics.
Ahiakpor, James C.W. “Multinational Corporations in the Third World: Predators or Allies in Economic Development?” Acton Institute, Acton Institute, 20 July 2010, acton.org/pub/religion-liberty/volume-2-number-5/multinational-corporations-third-world-predators-o.
“Ontario Minimum Wage.” Ontario.ca, 27 Nov. 2017, www.ontario.ca/document/your-guide-employment-standards-act/minimum-wage.
“Model T History.” Wiley.com, John Wiley & Sons, 1 Dec. 1996, www.wiley.com/legacy/products/subject/business/forbes/ford.html