Question

In the summer and fall of 2010, workers were rearranging the furniture in Boeing’s final assembly plant in Everett, Washington, in preparation for the production of the Boeing 767. It was a difficult and time-consuming process, however, because the items of “furniture”—Boeing’s assembly equipment—weighed on the order of 200 tons each. It was a necessary part of setting up a production system based on “lean manufacturing,” also called “just-in-time” production. Lean manufacturing, pioneered by Toyota Motors of Japan, is based on the practice of having parts arrive on the factory floor just as they are needed for production. This reduces the amount of parts Boeing holds in inventory as well as the amount of the factory floor needed for production—in this case, reducing the square footage required for manufacture of the 767 by 40%. Boeing had adopted lean manufacturing in 1999 in the manufacture of the 737, the most popular commercial airplane. By 2005, after constant refinement, Boeing had achieved a 50% reduction in the time it takes to produce a plane and a nearly 60% reduction in parts inventory. An important feature is a continuously moving assembly line, moving products from one assembly team to the next at a steady pace and eliminating the need for workers to wander across the factory floor from task to task or in search of tools and parts. Toyota’s lean production techniques have been the most widely adopted of all manufacturing techniques and have revolutionized manufacturing worldwide. In simple terms, lean production is focused on organization and communication. Workers and parts are organized so as to ensure a smooth and consistent workflow that minimizes wasted effort and materials. Lean production is also designed to be highly responsive to changes in the desired mix of output—for example, quickly producing more sedans and fewer minivans according to changes in customers’ demands. Toyota’s lean production methods were so successful that they transformed the global auto industry and severely threatened once-dominant American automakers. Until the 1980s, the “Big Three”—Chrysler, Ford, and General Motors— dominated the American auto industry, with virtually no foreign-made cars sold in the United States. In the 1980s, however, Toyotas became increasingly popular in the United States due to their high quality and relatively low price—so popular that the Big Three eventually prevailed upon the U.S. government to protect them by restricting the sale of Japanese autos in the U.S. Over time, Toyota responded by building assembly plants in the United States, bringing along its lean production techniques, which then spread throughout American manufacturing. Toyota’s growth continued, and by 2008 it had eclipsed General Motors as the largest automaker in the world. 1. What is the opportunity cost associated with having a worker wander across the factory floor from task to task or in search of tools and parts? 2. Explain how lean manufacturing improves the economy’s efficiency in allocation. 3. Before lean manufacturing innovations, Japan mostly sold consumer electronics to the United States. How did lean manufacturing innovations alter Japan’s comparative advantage vis-à-vis the United States? 4. Predict how the shift in the location of Toyota’s production from Japan to the United States is likely to alter the pattern of comparative advantage in auto making between the two countries Expert Answer An expert answer will be posted here

Answer 1

1. What is the opportunity cost associated with having a worker wander across the factory floor from task to task or in search of tools and parts?

Answer: the opportunity cost of associated with having a worker wanders across the factory floor from task to task or in search of tools and parts is that he could dedicate himself in production activity and engage himself more in order to get quality products with full dedication and efficiency, wandering across the factory floor from task to task may get disturbed to all other workers also, and wandering on the factory's floor in search of tools also envolved the accidental risks ,

Hence opportunity cost is - More productivity, dedicated work by the worker, Accident-free and efficient work by the worker,

and more quality product is the opportunity cost associated with having a worker wander across the factory floor from task to task or in search of tools and parts.

Explain how lean manufacturing improves the economy’s efficiency in the allocation.

lean manufacturing is practice of having parts arrive on the factory floor just as they are needed for production.

lean manufacturing can improve the economy's efficiency in the allocation in the following way.

Improve Quality: To stay competitive, companies can’t be complacent but must meet customers’ changing wants and needs. as the lean manufacturing focus to get the attention to the manufacturing, Hence it improves the quality of manufactured products and improves the economy's efficiency,

Eliminate Waste: Waste is bad for costs, deadlines, and resources. as the process is focused on getting the part manufactured as and when required and improve the economy's efficiency.

Reduce Time: Time is money, as the adage goes, and wasting time is, therefore, wasting money. Reducing the time it takes to start and finish a project is going to create value by adding efficiencies. Learn and apply some time management strategies.

Reduce Total Costs: Money is saved when a company is not wasting time, materials and personnel on unnecessary activities. Overproduction also adds to storage and warehousing costs.

Understating the above perameters we can say that lean manufacturing is improving the economy's efficiency in the allocation.

Before lean manufacturing innovations, Japan mostly sold consumer electronics to the United States. How did lean manufacturing innovations alter Japan’s comparative advantage vis-à-vis the United States?

lean manufacturing opens the way of Japanese automaker to the US market as initial due to the cheap labor and lean manufacturing process Japanese were adopted the cost of Toyota auto vehicles were comparatively very less to the US auto vehicles brand like Ford,General Motors and Toyota became very popular in US market due to its lesser price and improved quality.

and sells of US auto vehicles started dropping and they eventually prevailed upon the U.S. government to protect them by restricting the sale of Japanese autos in the U.S. Over time,

and Japanese automaker Toyota responded with setting up an assembly plant in united state and adopting lean manufacturing technique which then spread throughout American manufacturing. Toyota’s growth continued, and by 2008 it had eclipsed General Motors as the largest automaker in the world.

in this way lean manufacturing open the way for Japanese manufacturers to the US market which was earlier limited up to sells of Japanese consumers electronics only.

Predict how the shift in the location of Toyota’s production from Japan to the United States is likely to alter the pattern of comparative advantage in automaking between the two countries.

as Toyota's production shifted to the United state it alter the pattern of comparative advantage in automaking between two countries in the following way.

American manufacturing learned about the Japanese technique of lean manufacturing and it became increasingly popular among US manufacturers due to the high quality of production and at low cost.

after these American automakers got continuous improvement in manufacturing and product development performance to deliver value to customers which is a fundamental competitive necessity for vehicle manufacturers and suppliers

this alters the comparative advantage of Japanese automakers.