Optimise manufacturing cost, Cost Accounting

Optimise Manufacturing Cost

Of late it is perceived that in order to optimise manufacturing cost, a product might be designed and financed in one country; its material /components produced in other countries, assembled in another country, and sold in yet other countries. This practice is pursued with a view that the country that is the highest-quality, lowest-cost producer for a particular activity would perform that portion of the production of the product.

For example, The Boeing - 737 is made up of 367,000 parts, is assembled at a factory in Renton, US. But to assemble just one model of airplane, the company relies on a complex web of hundreds of international suppliers providing everything from engines and fuselages to seats and exit signs.

A student has to choose (*in consultation with module leader) a typical product and carryout a detailed study on various operational activities involved along with the country/countries in which activities are carried out.

Study has to start from the raw material stage through to delivery of final product to the end consumer. Further, students are required to consider a situation where in all the components/raw material are sourced/ manufactured in India and analyse the implication on various aspects such as raw material, cost, human resources, technology, intellectual property rights, taxation, foreign exchange rate, logistics, local regulation, etc. Finally, students are expected to make recommendations to overcome constraints during complete indigenization.

Posted Date: 2/16/2013 4:32:40 AM | Location : United States

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