Reduction of Economic Waste in the Automobile Industry

Reduction of Economic Waste in the Automobile Industry

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December 2006

Abstract

In the era of globalization, where the world has become a single market, there is an intense competition between various companies in any business field. Consolidation of the markets, rising customer demands, rising fuel prices and intense competition has lead to cut throat competition in the automobile industry. There has been a large change in production systems and management practices since the beginning of the 19th century. Initial craft production system gave way to mass production system, which car the basic means of transport system. But with changing preferences of the customers, oil crisis, recessions the demerits in the system were exposed. The Toyota production system is a revolution in these circumstances. But the main theme of every management practice and production system was reducing the inefficiencies like reduction in inventory, reduction in wastage of resources. These inefficiencies are termed as economic waste. This paper gives us an overview of what economic waste is and what are the causes in general. It focuses on the automobile industry and what are the new management and production techniques that are being implemented to reduce economic waste. At the end of the paper the role of manager in reducing the economic waste is discussed.

Table of Contents

Page

Abstract…………………………………………………………………………….2

Reduction of Economic Waste in the Automobile Industry……………………….4

Economic waste...................................................................................................... 4 Evolution of the Automobile Industry…………………………………………… 6

How to Reduce Economic Waste in Automobile Industries? …………………… 8

Advanced Technologies…………………………………………...8

Autonomation and Smart Machining Systems.................................8

Integration of the Supply Chain (ERP)…………….…………...…10

Best Management Practices………………………………………………….. …11

JIT (Just in time)............................................................................. 11

Lean Manufacturing....................................................................... 12

SixSigma…………………………………………………………….12

Manager’s Role in Reduction of Economic Waste……………………… 13

Conclusion……………………………………………………………………….14

References……………………………………………………..