Span of processes - make or buy, Operation Management

Assignment Help:

Span of Processes - Make or Buy

When Henry Ford developed his famous moving assembly-line method of producing the Model T car at the River Rouge plant in Detroit, he chose to 'own' all stages of its production, ie the widest possible span of processes. His company owned the rubber plantations that supplied the raw materials for the car's tyres; it owned the forests that supplied the wood for the car's wheels; it owned the iron mines, steel plants, foundries, forges, rolling mills and machine shops which manufactured the engine and other components. Its ownership of the complete span of processes even extended to the company's shipping line and railroad for the transport of materials and product. Today, no car manufacturer tries to manage such a wide span of processes; the lessons of Skinner's 'factory focus' have been learned, and many of the car's components are bought from specialist suppliers. Returning to the example of the gas-turbine component and the process sequence, consideration would be given to how much of the span of these processes should be carried out by the company itself. Instead of installing and managing all of the processes, a plausible alternative would be to buy the precision forgings from a specialist supplier, and restrict the internal focus to the machining operations. In the case of the airline service discussed earlier, it might be decided to focus on the long-haul flights between hub airports, leaving the feeder flights to and from the hubs to be provided by other airlines. Likewise, the in-flight entertainment and catering provisions might be outsourced to specialist suppliers.


Related Discussions:- Span of processes - make or buy

Explain organizations need to calculate a threshold, Why do organizations n...

Why do organizations need to calculate a threshold for a reorder? How could this affect sales?

Explain lawsuit against the vice president seeking payment, Soda Dispensing...

Soda Dispensing Systems Inc. (SDS) was owned by two shareholders, each of whom owned half the stock. One shareholder was president and the other was vice president. Their sharehold

Explain analysis in determining project risk, Evaluate the use of statistic...

Evaluate the use of statistical analysis in determining project risk and how it might be applied to the human factors of a project

Estimate the mean and standard deviation, 1. How do variables and attribute...

1. How do variables and attributes differ?  2. Estimate the mean and standard deviation of the following measurements.

What factors are likely cause faults in valuing google stock, The managemen...

The management and Directors of Google have stated that there is no plan for Google to ever pay dividends. Yet, the stock trades at a very high price in dollar terms (around $490 p

Explain uses a level material usage approach has collected, A firm that ope...

A firm that operates 300 days in a year and uses a level material usage approach has collected the following data: Annual Demand = 30,000; Daily Demand = 100; Daily production= 300

Definitions of productivity, Definitions of Productivity 1. Pro...

Definitions of Productivity 1. Productivity is the relationship between output generated by a production or service system and the input provided to create the output.

Explain the benefits of using erds in database design, What are the benefit...

What are the benefits of using ERDs in database design, implementation, and documentation? How does a design tool like a Microsoft Visio diagram help the organization create and do

What is utility of computer- wide systems, Q. What is utility of computer- ...

Q. What is utility of computer- wide systems to manufacturing operations? Enterprise-wide systems (ERP systems) also considered as enterprise computing or enterprise resource p

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd