Category: Manufacturing

The fissile properties of Plutonium-239

Plutonium-239 is an isotope of plutonium commonly used in nuclear reactors to produce nuclear weapons. The atoms of Plutonium-239 primarily disintegrate to release energy and gamma radiation when bombarded with slow-moving neutrons and are said to be a fissile isotope. Because of its fissile properties, plutonium-239 is used as a nuclear fuel in reactors to produce energy. It is also the major isotope used in the production of nuclear weapons alongside Uranium-238. It has an estimated half-life of 24,200 years; however, it undergoes fission when bombarded with neutrons to release energy, more neutrons, and radiations such as beta rays and gamma radiations.

Manufacture of Plutonium-239

Plutonium-239 is one of the primary fuels of nuclear reactors. It is generated through a fusion process involving Uranium-238 isotope (U-238) present in the nuclear fuel rods. The process involves exposing the Uranium-238 isotopes to a stream of neutrons, whereby the U-238 atoms capture the neutrons and transform them to Uranium- 239 (U-239). The U-239 formed undergoes beta decay by first releasing beta radiation to form Neptunium-239 followed by second beta decay to form plutonium-239 (Benedict & Thomas, 1981, p.81). The plutonium produced, however, is not pure and requires exposure into the air in the reactors to isolate pure plutonium-239 from the rest of the materials and make it an effective fissile material for use in nuclear reactors. However, the plutonium produced this way contains some contaminants notably plutonium-240. The formation of plutonium-240 is due to the tendency of Uranium-238 to take up an extra neutron during its formation.

Much of the plutonium-239 is manufactured in nuclear reactors called breeder reactors using fast-moving neutrons. They utilize less uranium-238 fuel but produce more plutonium-239 hence an efficient method of generating plutonium-239 from uranium fuel. However, the purity of plutonium-239 produced varies depending on the amount of the plutonium-240 present and the intended purpose. Plutonium-239 intended for the production of weapons contains a less percentage of plutonium-240, of up to 7% while plutonium-239 used as fuel in reactors contains 18% of the contaminant, plutonium-240.

Nuclear Power Reactors

In nuclear power reactors, uranium-238 is used as fuel alongside plutonium-239, which accumulates in the nuclear fuel. Plutonium-239 absorbs neutrons, which initiate a sustained chain-fission reaction. In the reactor core, plutonium-239 is constantly recycled thus eliminating any need for new fuel rods. During the fission process, large amounts of heat energy and radiations such as beta particles and gamma-ray are released (Hala & James, 2003, p. 102). The energy produced makes the reactor core very hot and requires a constant cooling system. In the Chernobyl nuclear accident, plutonium-239 was used as the fissile material for the nuclear reactors. The failure of the cooling system caused the nuclear core to become so hot leading to an explosion. The Chernobyl accident released major radioactive elements such as iodine-131 isotope, cesium-134 cesium-137, and plutonium-239. These elements are radioactive hence emit dangerous radiations such as gamma radiations into the environment.

Plutonium produced from the breeder reactors is not appropriate for use in nuclear reactors and in the production of nuclear weapons because of a significant amount of the contaminant plutonium-240 that it contains (The Institute for Energy and Environmental Research (IEER), 1992, p.11). In addition, plutonium-240 undergoes spontaneous fission producing harmful nuclear radiation making handling it difficult. The presence of plutonium-240 in the fuel rods used in reactors can cause a small explosion that affects the nuclear reactor core.

Reference List

Benedict, M., & Thomas, P. (1981). Nuclear Chemical Engineering. New York: McGrawHill.

Hala, J., & James, D. (2003). Radioactivity, Ionizing Radiation, and Nuclear Energy. London: Oxford Press.

IEER. (1992). Plutonium, Deadly Gold of the Nuclear Age. Massachusetts: International Physicians Press.

Introduction

At first glance, it seems that polyethylene is a simple polymer structure. But the analysis of polyethylene is a complicated matter because of the wide range of types and different manufacturing processes associated with the said material. Experts are in agreement that there is no precise method that can be used to classify polyethylene. However, for the sake of simplicity, polyethylene can be classed as low, medium, or high density. The conventional classification system, therefore, uses the manufacturing process to categorize different variations of polyethylene correctly. For example, there are two ways to produce polyethylene, and these are called high pressure and low pressure operations. The subsequent byproduct of the said operations can be grouped into three and listed as follows:

1. Low-density polyethylene (LDPE);
2. High-density polyethylene (HDPE);
3. Linear low-density polyethylene (LLDPE).

The popularity of polyethylene is rooted in the fact that this polymer is cheap, flexible, durable, and chemically resistant It is important to take a closer look at the manufacturing process in order to develop innovative and sustainable ways to manufacture polyethylene.

It is interesting to note that polyethylene production started late as compared to other industrial materials. LDPE is used to make films and packaging materials. On the other hand, HDPE is often used in the manufacture of containers, plumbing, and automotive fittings. HDPE is associated with these types of products because of higher stiffness compared with LDPE and LLDPE.

It must be pointed out that extrusion coating of paper and paperboard is an application segment that proves to be a growth area for LDPE. The explanation for LDPEs popularity is based on innovations in packaging technology for paperboard coating and paper and foil composite structures. Another reason is that LDPE is easier to process than LLDPE. At the same time LDPE has good strength and clarity.

Before going any further there is a need to clarify the difference between low-density and high-density polyethylene.

For example low-density polyethylene is ideal for products with demanding performance requirements. A good example would be stretch wrap, food packaging, and hygiene and medical applications. There is a high demand for packaging products that came from low-density polyethylene because it offers flexibility and flex crack resistance, particularly when it comes to liquids that move freely within a package.

However, if there is a need for a tougher packaging material, it can be argued that HDPE is more suited for the task. There are products that require puncture resistance. Others require tear resistance. In another application of for the polyethylene polymer, manufacturers developed the high-density polyethylene. The benefits of HDPE can be summed up in the following statement: an excellent combination of stiffness and environmental stress crack resistance. The high-molecular weight of an HDPE polymer provided the toughness required in pipe applications.

Background

Due to low price, processing ease and a variety of products that can be derived from it, polyethylene has become the most used plastic. Aside from chemical resistance polyethylene also exhibited another beneficial property and that is electrical resistance. This property led to the wide use of polyethylene in wire coatings and dielectrics. Polyethylene can be easily processed using all thermoplastic methods. Consider the following observation Blow molded containers are seen in every supermarket & these containers replace heavier ones made of glass and metal. Therefore, aside from the cost and ease of use, polyethylene also offers lightweight materials and makes it easier to transport goods from source of origin to supermarkets or stores.

The commercial production of polyethylene started late. There were failed experiments in the 1920s that did not produce practical applications for the said material. However, there was a chance observation that was made in 1933 when an ICI research team discovered that traces of a waxy polymer could be formed when ethylene and benzaldehyde were subjected to high temperatures.

The most important implication of the said ICI research was the realization that the product exhibited partial crystallinity and as a result the measurement of the density of the byproduct was used to classify it into different types of polyethylene. The said research team also discovered that the polymerization of the material at high temperatures resulted in polymer chains that were branched and resulted in densities of 915-925 kg/m³. But twenty years later another group of researcher discovered that the use of a different catalyst and polymerization at low pressure and temperature produced HDPE.

The utilization of the Phillips and Ziegler catalysts produced HDPE products that were tough and chemically resistant. But the said industrial material is more expensive to produce. At the same time, an HDPE material is opaque and not transparent and therefore it is not an ideal packaging material.

In 1978 Union Carbide created the Unipol process that enabled the company to produce linear low-density polyethylene or LLDPE. The Unipol process is cheaper. But more importantly it enabled manufacturing firms to manipulate the molecular structure of the linear product. For example, manufacturing companies could produce tougher films that are stronger and yet flexible.

The functional value of polyethylene can be appreciated through the study of its chemical structure. It is an example of a polymer molecule. It must be pointed out that a polymer molecule is composed of a large number of repeating units joined together by covalent bonds. For instance, all plastics and rubbers are polymers. A better way to appreciate the importance of polyethylene when in the context of industrial use is to point out that a polyethylene like HDPE has the same chemical composition of a paraffin wax. However, the main difference is in their molecular size. Aside from the major difference when it comes to molecular size, polyethylene molecules like HDPE are much longer than those of the paraffin wax. Furthermore, the high strength of polymers comes from the long-chain nature of polymer molecules.

Table 1. Main Applications of Polyethylene.

When it comes to LDPE, the short-chain branches suppress crystallinity and explain why the density in the solid phase is low. The short-chain branches also explain why the material is highly flexible. As a result it is relatively easy to process this material in its molten state. However, the plastic material derived from this process is relatively soft and weak.

When it comes to HDPE, the process to produce this type of linear polymer was discovered in 1950. HDPE is produced through the use of reactors at pressures that are lower than those used for the production of LDPE. The said commercial process produced linear polyethylene with a higher crystallinity in the solid phase. In addition, the non-branching HDPE can form a dense mass. As a result the byproduct is harder and stronger.

When it comes to the production of LLDPE the plastics contain little chain branching. LLDPE is a tough material that possessed good clarity, high elongation, high hot tack and a low melting point. Thus, the plastics exhibit good flex life, low warpage, and improved stress-crack resistance. For example, films for ice, trash, garment and produce bags are durable as well as puncture and tear resistant.

Table 2. Advantages and Disadvantages of Polyethylene.

It can be argued that the advantages of using polyethylene far outweigh the disadvantages of using the same. There is a high demand for industrial products that can protect and secure important items and foodstuff. The contribution of polyethylene can be seen in cost-efficiency, use of lightweight materials and durability.

But, there is one aspect of the polyethylene manufacturing process that must be highlighted in order to address sustainability issues. It must be made clear that in order to produce polyethylene, manufacturing firms must use ethylene as a feedstock. The conventional method of production necessitates the use of natural gas and crude oil. These are examples of fossil fuels and are non-renewable sources of energy and organic compounds.

The sustainability issue that surrounds polyethylene production is linked to the fact that someday all fossil fuel reserves will be depleted. Therefore, the inability to acquire this particular feedstock means that the world will stop producing plastics. It is therefore important to investigate current technological breakthrough that addressed this particular problem.

State-of-the-Art

Companies that manufacture polyethylene rely on one important ingredient and that is ethylene. The application of specific pressure and temperature to ethylene will result in the production of polyethylene. But there is one major problem when viewed in the context of sustainability and environmental impact. The feedstock needed to produce ethylene is natural gas or crude oil. These are examples of fossil fuels.

There is no need to elaborate the fact that natural gas and crude oil are problematic source of energy and organic compounds because it will be depleted in the future. This particular resource is finite and therefore it is prudent to search for alternative feedstock for the production of ethylene.

The alternative source must be renewable. It must come from a crop produced by plants or a substance produced by living organisms. At the same time the feedstock that will be used to produce ethylene must be predictable and cost-effective. One of the alternative solutions suggested by experts in the field of polyethylene is to use ethanol instead of natural gas or crude oil.

Ethanol is a form of natural alcohol and it is derived from the fermentation of organic sources of energy such as grains and fruits. In recent years the production of ethanol was made possible through the use of sugar beets, sugarcane, sweet sorghum, corn, and wheat. But there is one major problem when it comes to the use of grains and fruits and it is the need for arable land that must be converted to farmlands that in turn must be planted with a single crop.

It must be pointed out that thousands of acres of farms planted with a single crop are capital and labour intensive. As a consequence scientists had to look for more radical solutions to the given problem. They turned their attention to genetically modified microorganisms also known as cyanobacteria.

The genetically modified cyanobacteria will be cultured in a bioreactor to produce a large mass of algae. The end result of the process is the production of ethanol. Therefore, ethanol as a form of energy source can be used as a feedstock to produce ethylene and afterwards ethylene will be used to produce polyethylene.

The first thing that has to be established is the viability of the said technology. Thus, it must be made clear that there is already a genetically modified microorganism that can produce ethanol. The most critical factor is the use of a genetically modified cyanobacteria strain. It is technically labelled as Synechocystis sp. PCC 6803 strain. This particular strain of genetically modified organism can photoautotrophically convert carbon dioxide to bioethanol.

There is a need to clarify the fact that this particular strain enables the direct synthesis of ethanol. Nevertheless, a word of caution must be thrown out because the synthesis of ethanol is not guaranteed. It must be made clear that synthesis of ethanol does not occur naturally. Manufacturing companies that will utilize this technology must learn to manipulate cyanobacteria. The correct conditions must be met in order to create the optimum algal growth that will lead to the production of ethanol.

Scientists discovered that microalgae placed in a dark environment could survive even without light because the said microorganism utilized the glycogen stored in their bodies. In these conditions the microorganism produces no ethanol. But a different effect can be observed when cyanobacteria are placed in a dark and anaerobic environment. Due to the absence of oxygen the oxidative reaction of starch to carbon dioxide does not proceed. At the end, the culture can produce hydrogen gas, carbon dioxide, lactic acid, formic acid, acetic acid, ethanol and other products. The behavior of microalgae under the said conditions was used as the basis for the genetic modification of cyanobacteria so that it can directly synthesize ethanol.

Manufacturing companies will not immediately embrace this technology until their respective corporate leaders are convinced that the new system is practical and cost-efficient. The theoretical framework outlined earlier is not enough to persuade these corporate leaders to invest in this new technology. They will not invest huge sums of money in order to construct a new facility that utilizes a radically different process without assurance that it is already a proven system. The new system must guarantee the delivery of ethanol on a large-scale basis. It is therefore important to point out that in 2012 a company called Algenol was able to prove that cyanobacteria can directly synthesize ethanol.

Algenol is a state-of-the-art industrial biotechnology company located in Florida, USA. The said research firm boasts of laboratories in Florida as well as in Berlin, Germany. Algenol made the assertion that their patented system was documented to have produced 6000 gallons of ethanol per acre of microalgae. In order to fully understand the importance of this claim it has to be highlighted that an acre of corn can only produce 400 gallons of ethanol. In the same manner an acre of sugarcane can only produce 1000 gallons of ethanol.

The next step is to verify if there is a way to convert ethanol to ethylene. Without ethylene there can be no production of polyethylene. According to experts in this field, the process of conversion calls for the dehydration of ethanol. Another advantage of this process is cost-efficiency because the conversion of ethylene from ethanol is simpler. For example, the end product that can be seen in the bioreactor is water and ethylene, some unreacted ethanol and trace amounts of other substances. Thus, there is no need for distillation equipment and therefore lower cost for the company.

The patented system can be characterized as an efficient system because it uses renewable materials. For instance, the direct synthesis of ethanol requires microorganisms, water, carbon dioxide and sunlight. Furthermore, the sustainability of the system was established when it was proven that the microalgae can replicate without the need to purchase new cultivars. In other words, once the manufacturing companies purchased the technology from companies like Algenol, they will be supplied with cultivars from where microorganisms grow and replicate. The replication process continues as longs as there is enough food and other critical ingredients needed by the cyanobacteria to synthesize ethanol.

Algenol also made the assertion that the 6000 gallons of ethanol per acre is within production range. The basis for this claim can be see in the fact that genetically modified cyanobacteria strain is a fast growing photosynthetic prokaryote with high rates of photoconversion of carbon dioxide into photosynthate and biomass. In other words there is evidence to show that ordinary cyanobacteria can produce higher yields of ethanol compared to feedstock like corn and sugarcane.

Therefore, genetically altered microorganisms are expected to produce a much higher yield. Even if biofuel companies used unenhanced microalgae the expected bioethanol yield is already higher than agricultural feedstock like corn and sugarcane. Thus, the genetically modified cyanobacteria strain is expected to generate more.

There is another reason why genetically modified cyanobacteria can be a reliable tool for the direct synthesis of ethanol. According to scientists, it has the capacity for stable genetic enhancement and availability of molecular tools. Thus, genetic engineers can further improved the performance of the said microorganism in order to produce better yields.

Another evidence that Algenol was able to develop a reliable system was the discovery that cyanobacteria can thrive in a defined inorganic medium with no organic carbon source required. Thus, manufacturing companies will not have to spend an additional amount with regards to maintaining the cultivar. In other words the system can thrive with minimal input from the company. For instance, Algenol said that there is no need for materials aside from water, sunlight and carbon dioxide. This system can be considered sustainable because all the needed ingredients are readily available and renewable.

There are other factors to consider, for instance, manufacturing companies will be required to purchase the technology from Algenol. At the same time these manufacturing companies are required to construct photobioreactors because it only through an enclosed and anaerobic environment that a cyanobacteria can be expected to synthesize ethanol.

Manufacturing companies should also take heed that there are at least three key aspects that must be considered prior to the construction of photobioreactors. There is a need for ample space to construct the bioreactor, there must be sunlight in the said area and there must be ready access to a water source.

Land is indeed important but there is no need for hundreds of acres of land to initiate this project. In fact, the bioreactor can be constructed in such a way that the microalgae mass is equivalent to several acres of cultivars. The location of the bioreactor must be established first because planners will be able to determine the type of water source that can be supplied to the bioreactor. There is a specific strain of cyanobacteria that can thrive on saltwater or freshwater.

Discussion

The proposed alternative solution will create a sustainable system that will insure the continuous production of polyethylene even after fossil fuels like natural gas and crude oil had been depleted. If one will consider the cost of fossil fuel as well as the sustainability of the process it is easy conclude that there is no other way other than to embrace this new technology. There are so many advantages to the use of renewable sources of energy and organic compounds that makes the cutting-edge technology attractive for investors. However, there are still various obstacles that can prevent the use of the technology espoused by Algenol.

The first problem is that the technological breakthrough claimed by Algenol was only publicized in 2012. In other words there are many businessmen that are not yet aware of the tremendous possibilities offered by the company. At the same time there is no successful model that manufacturing companies can emulate. It has to be made clear that Algenol is a research company not a manufacturing firm that produces polyethylene through the manipulation of ethylene. Algenol has the motivation to exaggerate their claims in order to entice companies to purchase their technology.

Another problem is that manufacturing companies will have to change their thinking process when it comes to a new way of producing polyethylene. There will be many changes that have to be made in order to initiate the process of using cyanobacteria instead of fossil fuels. One can just imagine the drastic changes in a system that relied on high temperature and high pressure to produce ethylene and then transition it to a system that uses microorganisms.

At the same time there is the problem of additional investment. Manufacturing companies will have to invest in new technology. A great deal of money will have to be invested in order to acquire the said technology. Thus, manufacturing companies must carefully evaluate the benefits and risk of adopting the Algenol technology. Furthermore, there is a need to invest in a company-sponsored study in order to verify the claims made by Algenol.

There are obstacles and challenges along the way. But an overview of the Algenol technology can easily convinced businessmen that it is practical to think about long-term growth. The depletion of fossil fuels will end the current manufacturing processes enjoyed by polyethylene production companies. There is therefore the need to think ahead. There are problems and risks involved, however, a sustainable mindset will help convince investors that there is no better way forward other than to use sustainable sources of energy and organic compounds.

The main challenge is the need to prove that it is a profitable system. At this point there is a high demand for plastic products. Therefore, companies that produce polyethylene are expected to make money. There is a need to sustain the production processes 365 days a year. These companies cannot afford to slow down. But the shift to a new technology requires time to think and analyse the new system. The adoption of a new system may require the disruption of business operations. Thus, it is a challenge for corporate leaders to lose money in the first year of operation and consider the long-term impact of renewable systems.

Conclusion

There are different types of polyethylene. But the most popular types are HDPE, LDPE and LLDPE. The type of plastic produced through the utilization of polyethylene results in products that can protect and secure items and foodstuff. Chemical resistance and impact strength are just some of the advantages of polyethylene. Furthermore, the manipulation of the polymerization process enabled scientist to produce different types of plastics based on their densities. Thus, there are plastics that are durable but not flexible. There are plastics that are flexible and yet puncture resistant. It is therefore easy to understand why there is a growing demand for plastics. If compared to other materials like wood, metal and glass, the advantages of plastics can be seen in its low cost, weight, and durability.

One can just imagine the added cost of transporting products that are weighed down by heavy packaging material. It is also important to point out that polyethylene can be produced in mass quantities. In the case of glass and metal the time needed to process this type of packaging material takes much longer. It is therefore important to sustain this way of life. It is difficult to imagine a supermarket or store without plastics. Food will not be protected from various external forces if there is no plastic that can be used as a packaging material. In the same manner electrical appliances and other equipment can be damaged without the use of plastic components.

The use of plastics derived from polyethylene provides a way to increase the profitability of a business enterprise. Consider for instance the ability to transport clothes and bags with the assurance that it will reach its intended recipient without incurring damage. In the past businessmen used cloth, wood crates or bottles to transport liquids, foodstuffs and various items. There is a need to maintain the integrity of the said products. In other words companies are compelled to invest in packaging materials and other mechanisms to ensure the safe and reliable delivery of their finished products. Consider also for instance the safety issues surrounding electrical devices. Without the availability of polyethylene there is no cheap and reliable way to coat wires in order to protect the people that will use electrical equipment. Thus, the convenience of polyethylene-based products must be highlighted in order to understand the implication if polyethylene manufacturing firms can no longer produce plastics.

It is therefore critical to develop a sustainable system. But at the heart of the polyethylene production process is the feedstock taken from fossil fuel such as natural gas and crude oil. There will come a time when these sources of energy and organic compounds will be depleted. Thus, it is important to consider the alternative solution proposed by companies like Algenol. Manufacturing companies must invest in a company-sponsored study in order to determine the viability of the said alternative solution. The independent study will provide answers to questions posed by business leaders. The independent study will also determine if the new technology can be adopted successfully into the present system.

References

Abdel-Barry, Elsayed. Handbook of Plastic Films. UK: Rapra Technology, Ltd., 2003.

Algenol Biofuels. Harnessing the Sun to Fuel the World. Algenol Research. Chung, Chan. Extrusion of Polymers: Theory and Practice.

OH: Hanser Gardner Publications, 2000. Dealy, John and Ronald Larson. Structure and Rheology of Molten Polymers.

OH: Hanser Gardner Publications, 2006. Halford, N. (2011). Energy crops. Cambridge: Cambridge University Press.

Khanal, Samir. Bioenergy and Biofuel from Biowastes and Biomass. Reston, VA: American, Society of Civil Engineers, 2010.

Kjellin, Mikael. Surfactants from Renewable Resources. New Jersey: John Wiley & Sons, 2010.

Richardson, Terry and Eric Lokensgard, Industrial Plastics: Theory and Applications. New York: Delmar Learning, 2004.

Selke, Susan. Understanding Plastics Packaging Technology. OH: Hanser Gardner Publications, 1997.

Soroka, Walter. Illustrated Glossary of Packaging Terminology. IL: Institute of Packaging Professionals, 2008.

Vasile, Cornelia and Mihaela Pascu. Practical Guide to Polyethylene. UK: Rapra Technology Ltd., 2010.

Wang, Lawrence. Environmental Bioengineering. New York: Humana, 2010.

Off shoring as a method of conducting business involves transporting business operations such as manufacturing and service activities to emergent nations like China, India, Malaysia, Russia, and other countries. Some of the nations known for exporting their business ventures include the US and other European countries.

The manufacturing activities include designing of complex computer chips, toys, electronics and other electrical appliances especially in China (Gregorio, Musteen, & Thomas, 2009). On the other hand, India is an off shoring spot for call centers, IT services and password resetting services.

In this essay, we are going to discuss the pros and cons of off shoring for companies. For instance, firms decide to off shore due to reduced labor costs backed with workers with exceptional capabilities. In addition, there is improved efficiency for companies that have gone off shore and a wider market base resulting to increased customers.

On the other hand, the cons of off shoring include dangers of communication with the off shore country especially due to cultural gaps. There is also rebellion of workers and the public who may not embrace such a move due to hazards of losing their jobs.

In this 21^st century, global competition is rapidly increasing in developing countries that are seeking services from other progressive nations that can provide such. This has led to exportation of numerous jobs in foreign countries in order to meet these needs. This is what is called off shoring in business language.

Advanced countries like the US transport their businesses that include services, manufacturing and other numerous operations to China, India and Russia. For instance, India is a known off shoring point for services in Information Technology and Call Centers jobs whereas China and Russia deals in manufacturing that involves electronics, complex computer chips and toys (Lewin & Peeters, 2006).

Companies renowned for moving their business operations include IT firms, for instance, IBM, Intel, Microsoft, and Oracle among others that have taken advantage of cheap labor and efficiency among workers of India. Other firms exporting their manufacturing services include Citibank, EMC, and Ernst and Young because of swift development of these markets and reduced cost of doing business.

However, for any off shoring venture to prosper, companies put to consideration the efficiency of operations and position of the market (Mushore, 2006). For efficient operations, firms involve off shoring to boost labor production while market position increases the number of clients.

Activities being off shored to China, India, Malaysia and Czech Republic include IT services, business processes and call centers. For instance, off shored IT services have resulted to robust ICT markets of both China and India. China was ahead of US in terms of production and exportation of ICT products whereas India tops the chain of the leading ICT and other ICT supported services in the world (Carmel & Tjia, 2005).

This has resulted to the creation of more jobs especially in electrical and electronics sector. There are also manufacturing activities that include making of electronics like television sets, radios, computers, microwaves and others especially in China where they use cheap imported equipments.

There is also manufacturing of complex computer chips off shored to India and China by IT companies like IBM and Oracle. In addition, the production of toys and robots has been off shored to China and India due to their fair costs and flourishing ready markets for such products.

Furthermore, programming activities are off shored to developing countries like China and Malaysia due to high skills and speed of their workforce in meeting a companys target. Other firms like Hewlett-Packard (HP) have exported their digital networks to South Korea due to their highly efficient telecommunication industry (Kedia & Mukherjee, 2009).

There are several reasons why many organizations off shore their services in developing countries like China, India, and Czech Republic. For instance, there is reduced cost of labor in these countries when compared to the host country.

However, when compared with outsourcing which involve contracting an outside business company to provide services for your firm, the cost of labor is always high especially when done domestically (Gregorio, Musteen, & Thomas, 2009).

Whereas in off shoring there is increased flexibility in conducting business especially in distribution of resources, in outsourcing it is the opposite. In outsourcing, client managers can lose flexibility in the business operations and production of the organization.

Otherwise, there are also several disadvantages of off shoring as compared to the advantages of outsourcing. For instance, there are communication problems when dealing with customers in far way lands, for example, US and China. In off shoring, communication is always done through email and telephones which lose the human touch.

However, in domestic outsourcing, the business partner is within making efficient correspondence. Furthermore, there is the challenge of culture differences when a firm is off shoring with another company (Kedia & Mukherjee, 2009).

This has been known to cause poor communication between business partners. On the hand, home outsourcing involves dealing with people of ones culture making interaction easier than off shoring.

The organization off shoring can profit in a number of ways, therefore, enhancing its competitiveness in a cutthroat global market. For instance, there is cheap cost of labor when dealing with countries like China or India. Therefore, when the cost of labor has been reduced, a company has a chance to spread its networks to other markets leading to increased revenue thus elevating it above other competing firms.

In addition, a company utilizes a work force of high skills and talents leading to increased innovations in the organization. With increased innovations and creativity, quality goods would be produced by the company and at a speedy rate due to their skills boosting global sales (Ellram, Tate & Billington, 2008).

The other merit is increased number of clients whereby when a firm is exporting its manufacturing and services activities to developing nations like Malaysia and China, the number of buyers of such products also increases (Lussier, 2008).

For example, ICT companies such as IBM and Microsoft have opened offices in India, China and other economically stable Asia nations to reach a wider base of customers. There is also Hewlett-Packard and Intel who have established service companies in Korea to capture the mass market and take advantage of the fast growing economies.

The explanations behind transporting services and other business operations by progressive nations like US and England to developing countries like China and India are many. They include reduced cost as most developing nations provide low cost laborers. There is also the utilization of outside assets to sustain the goals of the off shoring company so that the set targets of the organization can be met.

For instance, this been witnessed with Intel which established a relationship with IT institutions especially in Russia by providing donations to produce the best technical talent. The other reason for off shoring is to spread its market in the global economy and reach several clients so that revenues are increased (Doh, 2005).

Organizations also export manufacturing activities to increase the worth of their products. This is always intended for the international market to increase competiveness and, therefore, increase profits. In addition, firms offshore in order to access a skilled labor that can perform effectively and at a reduced cost as earlier mentioned.

Manufacturing firms are known to go off shore so that they can improve their flexibility and evade tariffs. Furthermore, service industries like IBM, NOKIA and Microsoft embrace off shoring because of reduced risks due to minimal investment (Jones, 2009).

The dangers that come with exporting business activities to other countries are many. For instance, a company involved in business with a country with unlike laws and traditions from that of the progressive country. This is what results to culture gap between the two companies (Doh, 2005).

Another danger is the off shore company, for example, in India, can decide to give a contract it has been granted to another third company without knowledge of its client. This is where the hidden costs arise as numerous losses are incurred due to shoddy work. In the end, customers shift to other companies in search of quality products.

Another hazard with off shoring is rebellion from workers and the public who may not like the decision. This can affect the objectives of the organization especially when they are beginning. This is worse when workers unions are involved which can lead to strikes and go slows resulting to loss of control of the business.

Apart from rebellion of the employees, the public can also marshal a political rebellion that can destabilize the plans of the company before it starts shoring. Lastly, the profits realized due to off shoring can be affected by high costs of migration (Ellram, Tate & Billington, 2008).

In off shoring, there are implications for international managers that have an effect on the organization, for instance, on the aspect of the customer, a good rapport with suppliers has the gains of acquiring excellent goods. Alternatively, on the suppliers aspect, they realize that by conducting global business with their clients, they increase their connections leading to the wider business contacts.

Another implication is a strategic location where managers must realize that a convenient location is ideal for business as this attracts customers and generates profits. It is what we called earlier as market positioning (Doh, 2005).

In addition, managers should always be alert for the markets they have selected to profit from the location as they hunt for other suitable sites. Furthermore, global managers who want to excel in off shoring must appreciate political connections and protection especially during hard economic periods.

Governments tend to put in place stringent policies during these hard periods and are upon politically linked managers to gain from such situations. Furthermore, organization from distant miles in off shoring business requires managers who are much in control so that meaningful results can be realized in the organization.

In other words, there is an urgent need for proper coordinated management and effective evaluation of performance (Lewin & Peeters, 2006).

In summary, we can say off shoring, as a business move should be encouraged to enhance a global competition and tap on the skilled labor at a reduced cost (Mushore, 2006). Off Shoring should also be embraced to take advantage of the flourishing international markets to boost customer base and, therefore, increase on revenue. This is only possible if the companies choose a suitable site for conducting the enterprise.

In addition, instead of outsourcing domestically, which we said earlier as contacting a business partner within your country to provide your firm with certain services; off shoring results to global sales as compared to outsourcing that is only local.

However, off shoring should be embraced, although with careful consideration of the welfare of employees in the organization. This is because services such as call centers and ICT services are now being exported to countries like China and India. This is due to their fast moving markets, which renders the off shore work force jobless.

This results to unrests and other uncertainties that unless clearly investigated and resolved, will lead to other negative effects on the global trade. In addition, managers will have to consider the hazards of venturing into off shoring activities due to problems of their businesses being handed to third parties, poor market sites and lack of political connections (Jones, 2009).

References

Berry, J. (2006). Off shoring opportunities: strategies and tactics for global competitiveness. New Jersey, NJ: John Wiley & Sons.

Carmel, E. & Tjia, P. (2005). Off shoring information technology: sourcing and outsourcing to a global workforce. New York, NY: Cambridge University Press.

Doh, J. (2005). Offshore outsourcing: Implications for international business and strategic management theory and practice. Journal of Management Studies, 42(3), 695740.

Ellram, M., Tate, L., & Billington, C. (2008). offshore outsourcing of professional services: A transaction cost economics perspective. Journal of Operations Management, 26(2), 148163.

Gregorio, D., Musteen, M., & Thomas, E. (2009). Offshore outsourcing as a source of international competitiveness for SMEs. Journal of International Business Studies, 40(6), 969988.

Jones, W. (2009). Outsourcing in China: Opportunities, challenges and lessons learned. Strategic Outsourcing: An International Journal, 2(2), 187-203.

Kedia, B., & Mukherjee, D. (2009). Understanding off shoring: A framework based on disintegration, location, and externalization advantages. Journal of World Business, 44(3), 250-261.

Lewin, A., & Peeters, C. (2006). The top-line allure of off shoring. Harvard Business Review, 84(3), 22-24.

Lussier, R. (2008). Management Fundamentals: Concepts, Applications, Skill Development. Mason, OH: Cenegage Learning.

Mushore, S. (2006). Off shoring the middle class: managing white-collar job migration to Asia. Texas, TX: Virtualbookworm.com. Publishing Inc.

Kenya government

The type of government in Kenya is almost similar to other governments around the world. Peoples representatives are elected through democratically held elections with governments and various bodies around the world sending observers to ensure transparency. However, citizens are not allowed to vote on issues that relate to policy formulation and changes in law unless in special circumstances like constitutional referendum.

The president acts both as the head of state and head of government and is elected through popular vote. He is also a member of parliament. The president chooses members of the cabinet from the elected members of the legislative assembly. The countrys laws are made by legislature in the national assembly. The numbers of legislatures, known as members of parliament (MPs), currently stands at 210.

A small number of MPs are also nominated by their respective parties. Apart from the central government, there are smaller administrative units known as districts which are further divided into divisions. The government further comprises of the judiciary led by the chief justice.

The judicial service commission, just like the parliamentary service commission, looks into issues of remuneration of judicial officers and their welfare.

One issues that seems to bedevil Kenya is the high rate of corruption in the country, particularly in public offices. Besides, business people opting for short cuts in attaining business permits and other licenses have to bribe the authorities so that the process is hastened (Nawaz, 6).

Banking sector in Kenya

Kenya boasts of 43 commercial banks and one mortgage finance company. Among these banking institutions, 30 are locally owned where as 13 are owned by foreign based institutions. The government has significant shareholding in three local based banks. Asset wise, Kenya Commercial Bank (KCB) is the biggest bank with over 2.78 million dollars in assets spread across the country and its neighbors.

Local banks, such as Equity Bank, have also opened branches in neighboring countries such as Uganda, Rwanda, and Southern Sudan, thereby increasing their asset value. At the end of 2010, there were 12.8 million bank accounts serving the countrys population of roughly 40 million people.

This was an increase from the 4.7 million figure that was recorded in 2007. At the end of 2010, there were 1063 bank branches compared to 740 in 2007. Automatic teller machines stood at 1940 currently compared to 1012 in 2007. Agent banking has also been introduced to serve areas that lack bank structures.

Fraud remains a major challenge to the banking sector with 102 fraud related cases being reported annually, resulting into the loss of 390 million shillings. 90 banks have been listed at the countrys stock exchange market (NSE) with combined market value of over 470 billion shillings in a week. There are two Islamic banking institutions- The Gulf African Bank and First Community Bank (Reuters, 2).

Kenyas financial market

The Capital Markets Authority (CMA) is the institution charged with regulating the Kenyas financial market (Capital Markets Authority, 1). It promotes market confidence, protects investors from financial losses, and controls the Kenyan capital market.

Kenyas medical fraternity

The ministry of medical services and ministry of public health are solely in charge of health related issues. The Medical and Dentists Board is in charge of disciplinary issues in the health sector while the Kenya Medical Supplies Board ensures that drugs are distributed to hospitals.

Kenya Media

There are both state owned broadcasting houses like the KBC and the private media houses (Media Council, 5). Currently, there are 90 FM stations and 14 television stations. There are a number of print newspapers and magazines too. The Media Council of Kenya and the Communication Commission of Kenya are the regulatory authorities of all media in Kenya (Media Council, 3).

Sales

Any business that operates in Kenya has to be registered by relevant authorities. Any goods or products they undertake to sell have to be approved by the Kenya Bureau of Statistics.

Manufacturing industry in Kenya

This industry serves both the local and export market and is enhanced by favorable tax reforms and incentives, robust agricultural sector, liberal trade incentives, and expanded market outlets (Price Waterhouse Coopers, 1).

Kenyas corruption score index

Kenya was ranked number 154 with a score of 2.1 because there is no proper legislation to help fight corruption. The anticorruption watchdog, KACC, does not have prosecutorial powers and has to rely on director of public prosecution who may not be willing to prosecute perpetrators of corrupt practices (KACC, 1, Kenya Advisor, 2).

A culture has also been developed that is not value based that only fuel corrupt practice (Transparency International, 1). Institutions like the police, the judiciary, and immigration are all corruption hot spots (Transparency International, 2, Mwachiro, 4).

Works Cited

Capital Markets Authority. History. 2011. Web.

KACC. Statement by Kenya Anticorruption Advisory Board. KACC. 2011. Web.

Kenya Advisor. Facts about corruption in Kenya. 2007. Web.

Media Council. Code of Conduct for the Practice of Journalism in Kenya. 2011. Web.

Media Council. Function of the Media Council of Kenya. Web.

Mwachiro, Kevin. Kenya corruption costs government dearly. BBC News, 2010. Web.

Nawaz, Farzana. East Africa bribery Index. Anticorruption research network. 2010. Web.

Price Water House Coopers. Industrial manufacturing. 2011. Web.

Reuters. FACTBOX-Key facts on Kenyas banking sector. Reuters. 2011. Web.

Transparency International. Transparency and Integrity in Service Delivery in Africa (TISDA). 2008. Web.

The trade performance of Malaysias manufacturing good can be determined by its comparative advantage. Comparative advantage measures the cost of producing a particular product in country X against the similar product in country Y. Economists analyze the ratio of two trading countries as an indicator of its trade performance (Bowen & Pelzman 2008). Hence, Malaysia can have a comparative advantage when it produces fewer goods.

According to trade analysts, comparative advantage measures a country living standard and revenue (Gangnes 2010). The factors that influence the comparative advantage of Malaysias manufacturing goods includes abundant resources, efficient communication, technology, low-cost of manufacturing goods and the pattern of demand (Bowen & Pelzman 2008). The presence of raw materials such as timber influences the production of cheap furniture for export.

Communication is an important factor of production. Malaysias cheap labour influences the cost of production. Thus, the comparative advantage of a country can be affected by the factors mentioned above. Malaysia has abundant timber; hence the cost of producing wood products is low compared to China and Japan. Malaysias industrial policies remain open while maintaining the 21st position on the world export table (Wen 2005).

The growth of its manufacturing goods remains steady because of its abundant resources and low-cost production. The revealed comparative advantage of Malaysias manufacturing goods exceeds Singapore, Thailand, Indonesia and the Philippines (Viilman 2009). The increase in the production of E&E accounts for the increase in the economy. The steady growth of Malaysias Exports is influenced by its international presences and trade performance. Malaysia export performance of E&E products increased by 104%. Malaysias export value grew by 37.5%. The result indicates Malaysias trade performance against the US, China and Singapore. Malaysias E&E trade performance surpassed Thailand, Singapore and the US (Shapira 2011).

References

Bowen, H & Pelzman, J 2008, US export competitiveness, McMillian Press, New York.

Gangnes, B 2010, Global production networks in electronics ad intra- Asian trade, Hawaii, Manoa, Economic Review, China.

Shapira, P 2011, Knowledge economy measurement: methods and insights from the Malaysian knowledge content study, Asia Fellows Program 2010-2011, China.

Viilman, N 2009, Market share analysis of Malaysian exports: implication on its competitiveness, Review of Economics and Statistics, China.

Wen, C 2005, Export competition between Thailand/Malaysia and China in the US market: survey on electrical and electronic product. Asia Fellows Program 2000-2001, China.

Financial relations

A financial relationship is still necessary at Bravado. This is because banks can be a good source of short term financial assistance. Bravado might need to call upon their help at some point. Thus, it is necessary to maintain good credit ratings. However, for their long term investments, equity finance is the best option for Bravado (Scarborough, Wilson, & Zimmerer, 2009). This is because no regular interest payments are required by equity holders. Debt finance has to be paid back at regular intervals and with an interest. These conditions may prove difficult to meet for a firm that has barely started breaking even. Bravado can also regulate how much equity finance they would like to raise as opposed to debt finance which is at the discretion of the owner who decides how much to grant.

Industrial impact

Manufacturing clout means influencing the manufacturer. This comes with the size of purchases made by these manufacturers. Bravado uses the same manufacturer with well-known brands such as Victoria Secrets and La Perla. The two major brands have more negotiating power with the manufacturer than Bravado. This is the reason why Bravado says they have not much manufacturing clout. Economies of scale are the benefits attained by operating on a large scale. In Bravados case, it would refer to benefits attained from large scale manufacturing in Mexico. These benefits would include lower costs of production and high quality of goods due to efficiency in manufacturing. These are the benefits that From is out to exploit.

Inventory

Nordstrom says that the inventory is centralized (Scarborough, Wilson, & Zimmerer, 2009). This means that the entire inventory is found at one location. This is in the case of online stores where virtual stores have unlimited space in which to display their inventory. They can place pictures of all kinds of lingerie on their websites for customers to see. This is unlike normal stores where display space is limited. This can be an advantage to Bravado since customers can easily view their products if they search the website. However, competition with other brands displayed in the same online store is quite high.

Impact of exchange rate fluctuations

The impact of fluctuating currency exchange rates on Bravado is not surprising. Foreign exchange risk is one of the major risks facing businesses in todays globalized world. Bravado cannot eliminate this risk as they are an export company. However, there are a few ways to minimize their exposure. The best way would be to invoice their foreign customers in home currency. Customers would be persuaded to pay in Canadian dollars. This transfers the foreign currency risk to the customers completely. Any change in exchange rates would have no impact on Bravado (Scarborough, Wilson, & Zimmerer, 2009). The second option is to negotiate currency forwards and futures with their bank. This way, Bravado can hedge against the risk of foreign currency risk and minimize the risk of loss. Finally, Bravado can purchase currency options that allow them to buy or sell foreign currency at a pre-determined amount in the future.

Office building rental

Kathyrn can convert the former materials store to an office block and let it out. This would be a good source of extra finance. She can also consider setting up a factory in the US where most of her sales are made. This expansion into a foreign market would require a huge initial capital outlay. Kathyrn could consider making franchising deals. This way, she would be assured of regular income from the franchisees. She could also make licensing deals. These are the easiest ways for her to enter the American market using minimum capital outlay.

Reference

Scarborough, Wilson, & Zimmerer. (2009). Effective Small Business Management: An Entrepreneurial Approach. Chicago: Pearson Prentice Hall.

Introduction

Most successful multinational companies have ventured into foreign markets where they establish subsidiaries in countries with favorable economic factors. The subsidiaries seek business environments that are favorable in terms of the country of choice economic growth, the business cycle, unemployment and employment levels as well as inflation levels. Specifically, those entering the foreign markets assess and evaluate market factors concerning the countrys business cycle which highlights the market fluctuations in a country. This is because every business works towards gaining a profit and such factors may hinder that accomplishment.

Economic factors

Businesses require funding for start up and this is usually sourced from banks and other lending institutions. The loans usually are granted inclusive of interest rates and are usually charged as per annum. If interest rates are too high, businesses will be constrained and therefore keep away investors. This enables businesses to assess their businesses viability. This includes issues such as recession which indicates a slowdown in a countrys economic activity, which when it lasts too long it becomes a depression.

Other factors that shed light on economic conditions in a country include rates of inflation, exchange rates and national incomes. Inflation acts as a mirror of a countrys existing economy whereby it shows increases in the price of goods and services. This means that the subsidiary will suffer if the inflation rate is high as the cost of goods needed for production will also rise hence running the business to a loss. In these situations, lending institutions do not lend money to businesses and if they do it is usually at high interest rates.

Exchange rates define the current market prices that different currencies are exchanged at. If currencies in existing countries are higher than in countries where raw materials are being sourced, the cost of production will be low translating to good business. The reverse will mean negative impacts on the subsidiary. Current exchange rates show a strong dollar than the Turkish lira. The subsidiary will use available local materials and import most of its products. This means that the subsidiary will earn profits as the cost of production and exportation will be low in addition to available markets in Turkey and America.

Turkey reported a steady growth of 9% in 2010 and it was anticipated to decline to 5%. Unemployment levels have also been rising with time but it has become steady with a low of 11.9%. Inflation rates have also been fluctuating from 10.4% in 2008 and 6.3% in 2009 with a rise in 2010. This shows the unfavorable current market conditions. Persistence of the market forces and the dire predictions of ever increasing make the current business environment dangerous for investors. High levels of inflation and unemployment will make life more difficult as the cost of goods needed for production will rise. This will mean the end for many businesses as the subsidiary will be hard pressed in trying to make a profit when the prices are too. It is important to mention that many changes have been put in place to address the current situation and the investment climate is primed to be better. More research and vigilance on market fluctuations will need to be carried out to ensure that changes are positive and thus enabling establishment of a subsidiary (Datamonitor Plc 4).

Legal requirements

Businesses in foreign markets are expected to adhere to the host countrys regulation of the business environment. As such, companies that establish subsidiaries in other countries are subject to that countrys business laws, whereby the management assesses the legal requirements governing establishing a new business. Different countries have different legal requirements. For instance, in Turkey a subsidiary can be established in the private sector with limitations in some areas especially in the civil aviation and maritime transport among others. On the other hand, American requirements allow entry of businesses in every sphere of American life and hence more opportunities for business. Both American and Turkish law allows formation of limited liability companies, joint stock companies, and partnerships limited by shares. Turkey encourages most forms of businesses enabling flexibility of making or changing ones choices. The business legal environment in America is complex as different states have different regulations in establishing and running of businesses.

The new Turkish commercial code has also simplified the time taken to establish a subsidiary compared to American law that takes a long process before one is registered (Price Waterhouse Coopers 18). The American corporate income tax is currently at 30% flat rate (Wise 8) while that of turkey is at 20% (Price Waterhouse Coopers 9). However, foreign investors are required to pay an advance corporate income tax based on their quarterly based statutory financials at 20%. This is offset after corporate annual tax returns are deducted. In consideration to the information, business in Turkey is predicted to be favorable. The legal issues have been really simplified so as to attract more foreign investors. This will enable the management to successfully establish a subsidiary and make good returns due to the enabling environment. However, the decision will have to be considered in the light of the current market forces which are too unpredictable and therefore relatively dangerous.

Works Cited

Datamonitor Plc. Turkey Country Profile. Country Analysis Report. Web. 2012.

Price Waterhouse Coopers. Doing Business in Turkey. 2010. Web.

Wise, A. N. Doing Business in the U.S.A: A Bullet Point Guide For Foreign Business People. 2009. Web.

Riordan manufacturing was opened in 1991 in San Jose, California. It has since then been involved in manufacturing of plastic products used for automotive, appliance and aircraft parts. In addition, it produces plastic materials which are used in medical sectors and in beverage companies. In order to attain a future of profitability and growth, the company has set its goals which include; focusing on research and development and good customers and employees relationship.

Riordan Manufacturing uses various accounting tools to measure its performance. One of the most important approaches is ratio analysis. This involves examination and interpretation of correlation between numerous financial variables, by shareholders or creditors. Riordan uses ratio analysis to benchmark itself in the market.

Some of the ratio analysis uses in Riordan Manufacturing include: liquidity ratios, such as current ratio, and quick ratio, to measure its solvency levels. This is done by taking the current assets and current liabilities to ascertain the various ratios; it also measures its debt structure, which is measured by dividing the net debts against the net assets; Riordan expresses its gross margin as a percentage.

The profit margin is net sales less the operating expenses during that period; and profitability ratios to show the profitability of the company during a particular accounting period. Some of the profitability ratios used by Riordan Manufacturing include; return on assets, debt ratio, earnings per share and dividend payout ratio. Riordan uses these tools to identify changes in the companys operations and the trends in the market against other companies.

The companies systems are interconnected and dependent, and they are functional from the reception of the raw material shipment to the release of the finished products.

The sub-systems involved involves passing the incoming materials documents, from the deliverer to the receiving staff who compare the document against the order and in validation, the data is fed into the inventory system by the inventory clerk. In addition the information regarding the amount of raw material used and the number of assembled produced are submitted to the clerk who inputs the date into the inventory system (Docstoc, 2010).

When a sell is in process, the information concerning the customer and the amount ordered are entered into the shipping and billing systems by the sales system. Accordingly, the shipping system produces a document from the inventory system based on the amount ordered. After the ordered goods have been loaded into the truck the trucks number, date and time of departure are fed into customers billing system. Later upon shipment, the copies of order are entered into the inventory system.

In addition, to verify the amount of raw materials, assembled and finished products, an annual physical inventory is carried out against the figures of inventory system. To facilitate this, the department uses two types of desktop computers, which are the Dell Optiflex computer with Windows 2K operating system and Compaq Presarios operating on Windows 98 and Microsoft Office.

These systems are used by different facilities, where each facility and individual members of the sale team uses a variety of softwares and procedures to gather the customers information and to trace down sales.

The whole IT system, involved in the receiving of raw materials and release of produced goods is used by all the three Riordan companies in Georgia, Michigan, and China, although they produce different commodities. However, the sub-systems involved, which are; reception, inventory, manufacturing, branding and delivery, require some improvement to make the whole process successful. For instance, the reception does take a lot of time in comparison on the delivered materials and their order.

A more integrated method of electronically weighing the material delivered could save the company a lot of time for other processes (Docstoc, 2010). This can be achieved by comparing the weight of delivered goods and the ordered weight. In the inventory, the weight of the delivered good will be noted and since each plant processes one product the finished manufactured good can be compared against the weight.

Moreover, the sales department needs to install software that will compare the customers information and the market demand to production system records to determine the amount to be produced. This will curb the problem of dead stock, a major problem in Riordan manufacturing process.

In the same case, there should be a connection between the inventory system and the production system. This will enable the production team to assess the quantity needed to avoid the loss incurred in holding finished products. Also, the connection needs to be extended to delivery department, on which automatic hand sensor should be used to delete the released products from the inventory system. This will save time used in feeding the information manually.

Reference List

Docstoc, (2010). Improving Riordans Networks. Riordan manufacturing business systems. Web.

Summary

The motor vehicle industry mainly concerns itself with manufacturing and selling of motor vehicles and all the related parts to users. Motor vehicles have gradually continued to grow in their usefulness, influencing demand from the markets as users seek to gain from the additional features and technology that manufacturers introduce in their numerous designs and models.

At present, motor vehicles come with many added features that seek to address different areas of concern, including safety, security, and efficiency. The trend, however, has been reduced costs for acquisition of such improved vehicles as the industry targets to improve profits while maintaining lean costs. However, the industry experiences numerous challenges that threaten to derail the gains that have been achieved over the years.

Motor vehicles mainly depend on oil for their running, which is a challenge for the industry because global crude oil prices have been increasing almost on a daily basis (TheCapitol.Net 183). This makes it expensive to own and run a vehicle.

The global financial crisis has further reduced the demand levels as more potential buyers and users have been electing to invest their money on other assets rather than buying vehicles. Changing customer tastes and preferences have equally been putting manufacturers on continuous strategy development and improvisation as efforts are pursued to beat competition and maintain profit levels.

This case write-up seeks to illustrate some solutions that manufacturers have adopted in addressing the problems that afflict the industry. Firstly, the paper will explore on the changes in manufacturing strategy currently being witnessed, which includes the shift towards the developing economies in as far as locating manufacturing plants is located.

Secondly, the paper will explore on the new changes in production systems that mainly aim at achieving efficiency and eliminating over dependence on oil. Lastly, the paper provides recommendations that vehicle manufacturer can adopt as a perfect way of tackling the challenges that they encounter in their activities.

Strategic Analysis: SWOT Analysis of the Industry

Strengths

The industry boasts of an expansive product line. Different manufacturers are dealing in varied brands, which enable the companies to spread their risks. Thus, poor performance affecting a particular brand may not necessarily affect an entire company (U.S. International Trade Commission xxxi).

With increased competition among the various manufactures, the industry has generally developed manufacturing competence to sustain the competition. This has increased the quality of the manufactured vehicles and, thus, acted as a surety to the buyers that the products they buy are worth the value of their money.

To further sustain the intense competition, players have improved on their research and development skills, as well as leadership. This has seen quality products being released to the market, and which match the expectations and needs of the customers accurately. The motor vehicle industry enjoys reputable brand names that have been in existence for many years.

Such brand names are interpreted to mean high skills, long-term expertise, and reliable experience, which cannot be affected easily by changing market trends and patterns. Thus, more customers continue to have trust in the companies (U.S. International Trade Commission xxxii).

Weaknesses

Fast changing customer tastes have effectively made products to be obsolete and have narrow product lines. This makes it costly for the companies as they continuously engage in strategy formulation to achieve a perfect match between the products they manufacture and the market expectations.

Costs of manufacturing have been increasing with expanded production owing to the rising cost of the raw materials. The industry relies on different raw materials for the production of motor vehicles, including aluminum, glass, and rubber. The prices of these materials have been increasing over time, thus equally increasing the cost of production for the industries that rely on such materials, like the motor vehicle manufacturing industry.

Customer goodwill has been declining for industry players who fail to maintain positive performance. GM and Chrysler, for instance, are likely to have lost some level of customer goodwill in the wake of their bankruptcies following the biting global financial crisis. This has also contributed to their struggling performance even after the economy is on its recovery path.

With the industry pursuing portfolio management as a strategy of keeping pace with the market and competition pressures, there is the danger of poor performance as a result of bad portfolio management. Companies are focusing on pursuing too many portfolios, which in turn posses the danger of losing focus and encountering losses.

Opportunities

Motor vehicle manufacturers have the potential of expanding their core businesses to include other areas, such as motorcycle or ship engine manufacturing. This could help in increasing demand especially at a time when their core business demands are low. The industry has the potential of widening the product range as research and development activities lead to new products. This helps in spreading risk over a wider selection of products.

Industry players have the potential of vertically integrating forward and backward, thus eliminating challenges and limitations of relying on suppliers and distributors. This increases efficiency and also lowers chances of experiencing unwarranted delays. The trend in the industry has been that of making acquisitions, particularly with the best performing companies buying out those facing difficulties. This helps the companies in achieving additional markets and thus increasing their chances of making huge profits.

Threats

There is growing competition, especially within the domestic market, as foreign manufacturers establish their operations in different countries. The foreign market is also experiencing high competition as manufacturers from different countries target the international market for their operations.

Consumer tastes are gradually changing over very short periods. This is forcing manufacturers to endlessly engage in strategy planning and development, which is costly and time consuming. It also leads to losses due to delayed sales that occur as a result of the market not wishing to acquire vehicles they consider outdated.

Barriers to market entry are also being lessened throughout the world as most countries enter into international market treaties. This forces them to lessen the entry protection mechanisms, thus providing foreign companies with an opportunity to exploit the markets. Changes in economic factors are affecting the industrys demand, with the global recessions lowering market demands for motor vehicles. Such recessionary patterns push manufacturers into debts and also limit their production capacities.

Nature of Problems

Changing customer tastes

Buyers of motor vehicles often base their purchase decisions on various aspects, which make up their tastes. These purchase decisions are not permanent and keep on changing with time (U.S. Bureau of Labor Statistics 65).

Because manufacturers have to make quick sales in order to achieve their desired profits, it is important that they study the market trends carefully and design vehicles that will accurately reflect on the customer demands and wishes. This entails a lot of activity, including conducting market research and designing strategies to enable their products attract higher demands.

However, with the short-lived customer tastes, it becomes difficult for the manufacturers to fully address them. Once the companies clear their research and design the vehicles to specifications, they realize the tastes have shifted. In essence, this causes their vehicles to stay for long as finished stock in the warehouses and on the floor shops without being purchased. In other instances, the prices are forced to be lowered in order to raise demand for such products.

American motor vehicles manufacturers, mainly GM, Chrysler, and Ford, concentrated on the manufacture of sports utility vehicles, SUV, and light trucks because the local market preferred this type of vehicles. With the growth for these companies mainly relying on the sale of SUVs and light trucks, the market changed its taste and preferences as most buyers opted for the small passenger vehicles that were mainly manufactured by foreign companies.

This decision was mainly informed by the fact that the SUVs consume a lot of fuel, which is not economically viable at a time when oil prices are increasing at alarming rates. This change of market preferences and consumer tastes has in particular been responsible for the slow recovery of the American leading manufacturers, especially GM and Chrysler (U.S. Bureau of Labor Statistics 65).

Global economic patterns

Global economic patterns are highly fluctuating and are very difficult to be predicted accurately. This subjects the car manufacturing companies to highly risky business environment because any abrupt changes could affect their production and profit levels.

Economic recessions, in particular, have negative effects to the operations of car manufacturers as they diminish the buying capability of users, thereby reducing on the market demand levels. As the overall market demand declines, companies are also forced to cut down on their production capacities in order to control the likelihood of running at losses. This involves cutting down jobs, closing down on a number of manufacturing units, and borrowing funds from governments to assist in mitigating the crisis.

With production having been at normal prior to the onset of such recessionary patterns, it means the finished vehicles already released to distributors and showrooms will take longer before being purchased. The longer these products remain at the shops the more the costs also increase. Eventually, this pushes the manufacturers into losses and makes it difficult for them to recover even after the recessionary periods recede and markets demands increase to normal.

Rising cost of oil

Global prices have a huge bearing on the purchase decisions that customers make in as far as their acquisition of motor vehicles is concerned. Thus, the ever rising global prices for the commodity has posed a challenge to the motor vehicle industry, especially given that many vehicle engines rely on oil to run.

As a remedy to the challenge, industry players have constantly been engaging in research to find alternative energy sources that can be able to power their vehicles. Such research findings have determined other viable alternatives, including the manufacture of hybrid vehicles that are set to lower the overdependence on oil as the main energy source.

However, these researches are expensive for the car manufacturers as they require a lot of time and expertise. Equally challenging is the fact that vehicles running on a fuel cell require hydrogen that combines with oxygen in order to run. However, there are very few hydrogen stations, which make the alternative less viable. Liquid hydrogen can only be stored in very low temperatures, thus making this option further less attractive for the industry.

A different alternative has been developed in which lithium ion batteries that are rechargeable are used to power vehicles. This alternative, too, faces its own drawbacks as the batteries can hardly retain their charge for significant durations. With these ventures being comparatively expensive, these types of vehicles are expensive to acquire and would still discourage the buyers from purchasing them.

Rising competition

The motor vehicle industry and market has been experiencing increased competition from the varied players as the scramble for purchasers continue. In particular, most countries have reduced the entry barriers that previously locked out foreign companies from competing with their local manufacturers. In essence, more foreign companies have gained access to other national markets, including establishing manufacturing in such markets to maintain their production costs at minimum levels.

Japans Toyota motor manufacturing company, for instance, has gained a foothold of the American domestic market following the companys entry into the market. This has seen the company establish several manufacturing units within the USA to make their operations easier.

The market share for the American companies, GM, Ford, and Chrysler, has particularly waned with the introduction of mainly Japanese and European manufacturing plants. Subsequently, the foreign manufacturers now enjoy a bigger market USA auto mobile market share, thus piling more challenges to the home companies.

Control Systems

Extending activities into the developing world

Vehicle manufacturers have particularly embraced the idea of extending their operations into the developing world to address some of the challenges that continue to afflict the industry. The main reasoning behind such a move is to target the huge market in such countries, including China, India, Brazil, and Russia, which have high populations.

The developing world, despite the fact that it also registered a decline in demand levels for motor vehicles during the global financial crisis, was not as worse of as the developed markets. Thus, the slight drop in demand levels has given hope to the manufacturers from the developed world that the markets can offer substantial ground for growth.

In addition, the cost of operation in the developing world is also comparatively low. The huge population makes it easy to acquire labor at very cheap rates. This translates to high efficiency for the companies as they are able to save significant costs and thus improve on their profitability.

Integrating advanced technology in manufacturing

The industry is adopting the use of advanced technology in order to address the problem of overreliance on oil for running vehicle engines. The new technologies have seen the introduction and release of hybrid type of vehicles that use alternative sources of energy. The vehicles use batteries and hydrogen as an alternative to oil and can be recharged as the vehicles run on oil.

New technologies have also seen companies achieve fast and reliable production capacities that do not delay the production cycle. This is significant for the companies because the finished vehicles take only few days between the start of manufacturing and the market release date. The technological advancements also aid the production of different product models using the same production plants and materials.

Restructuring supply functions

Most industry players are restructuring their supply departments to achieve high efficiency. Such restructure programs include spurning off the supply department such that it operates independently. This program achieves efficiency because the restructured supply organization cleanly understands the internal operations and production patterns of the main company.

Production by order

Motor vehicle manufacturers are attempting to tie their production to specific orders by the market rather that mass production of their products. This seeks to gain the automatic market demands while eliminating cases where vehicle products stay for long at the distributor and shop locations without being purchased.

External Industry Environment: Porters Five Forces Analysis

Buyers bargaining power

Buyers have a moderate bargaining power. This is because the global population, which forms the industrys market, is huge and provides a wider alternative for the manufacturers. There are also varied manufacturers who target the same global market with their varied products (Grant 112).

Suppliers bargaining power

The supplier bargaining power in the motor vehicle industry is also moderate. Most of the manufacturing companies are huge and have capacity to achieve forward integration. However, suppliers of other important material parts still enjoy some level of monopoly over the manufacturers.

Barriers to market entry

The level of market entry barriers is high. The motor vehicle industry relies on high capital amounts to set up operations. Equally, the market has more trust on brand names and customer loyalty, which a new company may find difficult to acquire and build over a short term.

Rivalry and competition

There level of rivalry and competition is intense. Different manufacturers are competing with each other in order to acquire significant market shares. This has seen manufacturers establish operation units in different regions of the world in order to achieve low production costs and market customization.

Threat of substitute products

The threat of substitute products in the industry is high. Many manufacturers are increasingly relying on market tastes and preferences to manufacture their products. Thus, different products from varying manufacturers resemble each other and could easily be picked by customers as a perfect substitute for their brands (Grant 115).

Solutions and Recommendations

The industry needs to spend more in the area of research and development. Although companies are sending more in this area, additional spending should be encouraged as a way of creating competitive advantages over competitors.

As competition increases, companies can only develop their competitive edge by undertaking continuous research and development activities in order to keep up to date with the market expectations and preferences. Equally, technology is constantly changing and without maintaining pace with it, the companies may not be able to achieve the advantage of efficiency and high quality that comes with it.

Having an elaborate research and development strategy will enable manufacturing companies to work on alternatives that may address effectively the challenges of over relying on oil fuel as the main source of power for motor vehicles. It will also come in handy in addressing the challenge of changing market preferences by exploring on other viable alternatives, such as pursuing special manufacture by market order.

Production in some countries is too expensive and is not viable at all. Manufacturers, therefore, need to consider the cheap production countries in the world and relocate their production there to maintain minimal production costs. Production of motor vehicles in the USA, for example, is not viable because of the added costs that are involved. Companies need to pay high costs in maintaining their pension workers, which eventually increases the cost of production.

Companies, such as the GM, Chrysler, or Ford, may consider transferring their labor intensive processes to such developing countries as China or India, which have considerably low labor rates. Other processes that require a lot of mechanization, such as vehicle assembly can remain in the USA owing to the countrys extensive industrialization. This will reduce the production costs significantly for the companies, and enable them sell their finished products at highly competitive prices.

Companies should consider expanding their product portfolios in order to spread their risks and thus cushion themselves from such threats as bankruptcy. Even though the core business for a vehicle manufacturer involves designing and producing vehicles, relying too much on this one business can prove to be dangerous.

Apart from introducing several motor vehicle brands under one manufacturer, players can consider exploring the manufacture of other closely related products, like motorcycles, power generators, or mechanized sawing machines.

The market demand for such products is independent of each other and thus a manufacturer can be assured of a different market in case one product type struggles with poor market demands. The variety of products should be different but employ similar technology in order to make it easy for the company to enhance its performance in the other product areas.

Works Cited

Grant, Robert. Contemporary Strategy Analysis: Text Only. Hoboken, NJ: John Wiley, 2010. Print.

TheCapitol.Net, Inc. Recession, Depression, Insolvency, Bankruptcy, and Federal Bailouts. Alexandria, VA: TheCapitol.Net, 2009. Print.

U.S. Bureau of Labor Statistics. Career Guide to Industries, 2006-07. Washington, D.C.: U.S. Department of Labour, 2006. Print.

U.S. International Trade Commission. Foundry Products: Competitive Conditions in the U.S. Market, Inv. 332-460. Washington, D.C.: U.S. International Trade Commission, 2005. Print.

Statement of the Problem

The problem in the research is presented in the process. The root of the problem can be traced back to the functioning of the blow molding and assembly processes. It is important to note that there are over 120 shells that go into waste every day. The target of the research will be to modify the process so as to ensure that there are no cold shells at any stage of the process.

Cold scraps have the effect of increasing costs and lowering revenue. Due to cold scraps, the company is not able to maximize its profitability. Dealing with this problem has been identified as being one of the best ways to ensure that the company is back to its profit making ways. The project objective statement is: To reduce the number of cold shells scrapped to 0.

Scope of the Project

To better understand the scope of the project, it is important to look at the key terms used in the project. The term unit refers to scrap. These are the cold shells at the end of the project that cause high scrap cost. Defect may refer to a product or a process. The cold shells that are scrapped by the robot in the course of production are referred to as defects.

Although the project is concerned with the entire production process, the focus will be on the cooling and assembly processes. The project seeks to establish the root of the problem through assessing the process of cooling as well as the assembly line.

The fixtures and details contained in the cooling fixtures as well and in the assembly line will be the main focus of the project. Although the project is set to encounter constrains, the major constrain will be in regards to the two different customer programs which share the same blow molding process.

Stakeholder Analysis

An analysis will be conducted on the stakeholders to evaluate their position in regards to the goal of the project. Some of the critical analyses that will be conducted are in regards to the facility controller, VP operations, executive VP, and business unit management. In analysis of the Executive VP, the action taken will initiate a meeting with the DC to bring him up to speed.

In analysis of the VP operations, the action taken will be centered on the great involvement from D and the excellent support since he has taken over the VPO position. In the facility controller, the action taken will be focused on the savings that can be realized as a result of achieving the goal of this project.

In regards top the business unit manager, the focus will be on the assigning of staff members and the amount of personal involvement. The nature of decisions being made will also be an important factor to take into consideration.

Methodology

The research will commence on the assessment of the blow molding. The focus here is laid on the cooling process on machine 5. In this analysis, the position where the robot waits for the signal is an important area of assessment.

Other areas of assessment will include the process of picking the tanks, the weighting process, and the cooling process. Because so much scrap is realized from this section of the entire process, it will be important to look at the fine details and the process involved in weighting, molding, and cooling.

Timeline of the project

In the first, there will be important activities that will take place. This will include the project charter, assessment and implementation of the CTQ tree, and the project financials. The majority of the processes that will take place in the first month will be concerned with the definition and envisioning of the future state. The second month of the project will be concerned with measurement and mapping.

Here, the process mapping will be done as well as the screening of tools to be used in the process. The MSA will also be tackled extensively during the second month. In the MSA, there are a number of processes that will be dealt with extensively. This will include assessing constrains, providing training, assessing the baseline capability, high level process map. The third month will deal with analysis.

Most of what will be done in the third month will be to analyze. There will also be a focus on the waste priorities and detailed analysis. The analysis conducted here will be divided into the passive quantitative analysis and passive qualitative analysis. The fourth month will be all about improvement  the activities therein concerned with the selecting lean methods as well.

This will be divided into improvement summaries, experiment execution, and experimental plan. The fifth month will be concerned with control. This will be divided into the process controls, handing off to process owners, final process capability, as well as project sign off (Kock, 2007).

Measurement system analysis

The achievements made in the course of the process are centered on the system analysis. The measurement system analysis is the gauge through which the different processes contained in the research are weighed. This tool is also important as it provides information about how the system records different aspects involved in production.

One of the greatest changes the system has been able to achieve through this system is in regards to the recording process. One of the important things that took place in regards to the MSA is the recording of cold scrap at different internals. This was done from the blow mold controller. It was done manually and the data was automatically recorded. A paired T test was also done.

The main aim of this was to compare the two methods (Infoman and Mold controller) that are contained in production. The practical problem was presented in the question; is the mold controller recording method identical statistically to Infoman recording method? Baseline capability and process stability were also important in the analysis.

A fish bone diagram was created where the different factors involved in production were analyzed. These were all gauged in regards to their effect on production, performance, and the goal of the project. Some of the factors analyzed include label accuracy, light curtain status, swipe card reader, part present sensors, lumberjack processes, torque, arrow mark, alignment line, leak, pressure, and continuity.

The fish bone diagram also looked at the tank shell, ORVR, ROV, studs, pads, nylon tubes, seals, rings, clamps, hoses, oil, markers, heat shields, and racks. Lean hand, operator, and downline technology were also some of the factors that were analyzed in regards to performance. Some of the amendments that were made in regards to these factors include water, protective equipment, light, and space.

Maintenance manuals were also amended as well as the work instructions and the operating manuals. In a bid to increase performance, some of the important issues that were taken into consideration included tank lifters, air guns, continuity testers, leak testers, light curtains, transfer stations, welders, pad stations, FDM stations, and swipe card readers (Kock, 2007).

Reference

Kock, N.F. (2007). Systems analysis & design fundamentals: a business process redesign approach. California: Sage Publications.