Category: Manufacturing

Productivity and sustainability trends have been adopted by manufacturers globally. These trends will be analyzed in terms of residential utilities and consumer goods. Sustainability and productivity elements are symbiotic as an organizational policy to use the two has numerous environmental and economic benefits. An increase in productivity is essential for sustainable development; thus, sustainability and productivity can determine an organization’s profitability and environmental impact on a community.

Manufacturing Productivity

Manufacturing productivity refers to profitability as it affects costs and competitive advantage. Core competencies are vital in determining the profitability of companies in an increasingly competitive global marketplace. Manufacturing productivity is measured as the ratio of output to input and describes the rate of the manufacturing units and the cost of human capital. The measure entails how much a company can produce in terms of throughput and quantity based on a specified amount of input. The input covers capital resources, human capital, natural resources, and technological know-how. Manufacturing productivity is measured over extended periods, including multiple economic cycles, due to the volatility of short-term estimates. The most common manufacturing productivity trends entail automation, augmented reality, and inventory management.

Automation is the use of machines to eliminate manual processes. This trend is synonymous with mechanical systems programmed to perform various production processes to increase efficiency (Gehringer, 2022). Automation ensures the streamlining of workflows by eliminating production errors and delays leading to lean production operations. In addition, it allows manufacturers to determine asset and production performance. Manufacturing automation enables faster production, thus reducing operational costs and increasing output. Augmented reality refers to computer-generated images to capture real-time production changes. Augmented reality is used to identify unsafe working conditions, envision finished products, and present real-life manufacturing processes. Inventory management comprises the flow of goods from manufacturers to warehouses and the point of sale. Inventory management’s main objective is to maintain the optimum inventory required for seamless production. Optimum inventory is an essential asset to a company and supports operation management by reducing costs associated with overstocking and understocking.

Consumer Good Application

Table 1. Industrial Production and Capacity Utilization

There was increased production and demand for residential utilities from January to April. Manufacturing output gained 3.4 percent in April, highlighting the increase in productivity throughout the six months. The transition from November to December and February to March were the only months with a significant decrease in manufacturing output. The average production of consumer goods is 107, and the lowest index is 98, highlighting the increased demand for residential utilities. The production capacity increases from January to April, highlighting the increased product demand.

Table 2.Industrial Production and Capacity Utilization

In April, manufacturing output gained 0.8 percent, marking the fourth straight month of 0.8 percent or more rises. The utility index increased by 2.4 percent. In April, total industrial production was 6.4 percent higher than a year ago, at 105.6 percent of the 2017 average. The market forces determine the number of goods in a market. The average production of consumer goods is 103, and the lowest index is 100, highlighting the increased demand for consumer goods. The production capacity increases from December to January and March to April highlight the increased product demand.

Sustainable Manufacturing

Sustainable manufacturing refers to the production method that minimizes waste and negative environmental impact. Sustainable manufacturing highlights an organization’s goals towards addressing ecological issues. It serves to improve and analyze an organization’s sustainable development target regarding the negative impact of business on society. An organization can create value by improving natural resource management through sustainable means. The prominent trends in sustainable manufacturing include using recycled materials, a circular economy, and tapping renewable energy.

Using recyclable materials minimizes the amount of plastic in the environment, a significant factor in environmental degradation. Recyclable materials are made from natural resources such as yarn, thus breaking down in natural environments. This eliminates the adverse effects of non-biodegradable products that take years to decompose, thus tainting the environment (Bezamat & Schwertner, 2022). Another trend is the circular economy, where manufacturers reuse the waste in a continuous loop. Waste is considered valuable; thus, companies innovate ways to extend product life by reusing them. This entails optimizing waste management, repairing instead of replacing equipment and using eco-design techniques emphasizing recyclable material. Manufactures can bring sustainability into manufacturing by implementing renewable energy options in operations. Carbon emissions are the most significant adverse effects of manufacturing industries; thus, renewable energy sources reduce greenhouse gas emissions. (Klebert, 2022) Using renewable energy sources, including energy conservation, tapping solar energy, and establishing water reclamation plants, helps an organization achieve net-zero emissions, thus reducing environmental impact.

Conclusion

Trends in manufacturing productivity help improve efficiency and can be used to ensure sustainability practices. Sustainable manufacturing increases corporate reputation through expanded transparency regarding the business’s social, economic, and environmental impact. Manufacturing productivity and sustainability relate to an organization’s ecological responsibility policy, climate change, greener materials, and the use of finite resources. Policies aimed at sustainability development help increase profitability regarding productivity as they reduce operational costs, including renewable energy and reusing materials.

References

Bezamat, F., & Schwertner, A. (2022). 8 innovations in advanced manufacturing that support enhanced ESG reporting. World Economic Forum.

Gehringer, A. (2022). Productivity and efficiency in manufacturing: What’s the difference in 2020?Rhythm systems.

Klebert, S. (2022). Carbon-neutral manufacturing is possible: here’s how. World Economic Forum.

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 country’s 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 country’s 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 country’s 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 country’s regulation of the business environment. As such, companies that establish subsidiaries in other countries are subject to that country’s 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 one’s 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.

GMPs are the guidelines or steps that manufacturing companies need to follow when manufacturing products to ensure that they are of the expected quality (Food Allergy Information n. d.). Under these regulations, often enforced by law, processors, manufacturers, packers of some food, medical devices, and blood are required to ensure that they produce pure, effective, and safe products. GMP guidelines call for quality approach when manufacturing products so that companies can eliminate or minimize instances of errors, contamination, or mixups. Consequently, consumers are protected from buying dangerous or defective products. Companies that fail to comply with GMP guidelines may be faced with serious consequences such as product seizures, fines, jail time, and fines.

GMP practices can be useful in determining if a food has been processed, packed, and stored under sanitary conditions. In addition, they can be used to determine if a food product for example has been adulterated or contaminated with filth. Failure to use GMPs when manufacturing food can render them injurious to the health of consumers (HACCP Alliance 1999). For example, pasteurization of such food products as milk and juice is considered as a good manufacturing practice. The same case applies to freezing of foods. In pasteurization, the food is subjected to specific heat conditions for a specific period of time to destroy pathogens and food spoilage microorganisms. In case the pasteurization process does not adhere to these conditions, then the food in question is not free from spoilage and pathogenic microorganism and is thus injurious to the health of consumers. In addition, freezing creates an unfavorable environment for microorganisms to thrive, thereby enhancing the shelf life of a food. If this step is sidestepped in the manufacturing process of a food, then this violates the GMP guidelines.

Clear labeling of food products is also considered a good manufacturing practice. Proper labeling of food products not only informs consumers about the contents of the package, but also serves as a warning of some of the potential biological hazards that the food could be exposed to. Some of these include Listeria monocytogenes, Salmonella typhi, and Bacillus cereus, among others. If at all good manufacturing practices are to be achieved while processing food products, there is the need to ensure that such hazards are controlled.

GMP regulations address personnel, equipment and utensils, employees and visitors, cleaning and sanitation, control of operation, process and production controls. It is important to assess the health condition of the personnel to avoid infected lesions and communicable infections. Cleanliness of the personnel should also be observed. For example, they need to wash their hands before commencing work, or after they have been away from their workstation (Keener 2009). In addition, employees should maintain sufficient personal cleanliness. For instance, nails should be kept short. Appropriate clothing should be worn to avoid contaminating food-contact surfaces, food packaging material or the food itself.

There should be designated areas for smoking and eating, and these should be outside the production area. Additionally, a storage area should be set aside where personnel can keep their clothing and personal belongings (Keener 2009). Visitors to a food production facility should not be allowed to enter the production area to prevent or minimize food contamination. In case it becomes necessary, they should be provided with suitable protective clothing

Good manufacturing practices also involve the traceability and identification of products at different stages of production (Keener 2009). In addition, mechanisms should also be put in place to recall defective products from the market should the need arise.

Reference List

Food Allergy Information., n. d. GMP and HACCP. Web.

HACCP Alliance., 1999. Guidelines for Developing Good Manufacturing Practices (GMPs), Standard Operating Procedures (SOPs) and Environmental Sampling/Testing Recommendations (ESTRs). Web.

Keener, K., 2009. Sanitation Standard Operating Procedures and Good Manufacturing Practices. Web.

Keener, K., 2009. Small Meat Processing Plants: A Recall and Traceability Program. Web.

The researcher engaged in an activity that entailed identifying and categorizing 25 items in the house that included clothes and households’ items. After identifying the commodities, the researcher arranged the items according to the country of origin and their brands. The table below shows the various clothes and household items identified and categorized.

Many companies are opting in outsourcing their productions to other areas. The table above includes 25 different items that range from clothes, jewelries and other household items. The researcher identified that most of the items listed above originate from Asian or African countries and branded by European and American firms. For example, puma, which is a renowned company in the production of sport wears and other kinds of casual wear, is a German based company.

However, after a thorough search, the researcher identified that most of the items having the Puma label originates from Indonesia, China and Turkey. A similar search for the original of the listed products that had an M & S label indicated the products originates from China, Egypt , Algeria and Turkey and not from America which is the headquarter of M & S.

A similar search of the origin of the Getwear products that the researcher outlined in the list above indicates that most of Getwear products do not originate from Scotland, which is the headquarter of the Getwear Company, but are made in Algeria, Egypt and China. The researcher also indentified a number of items that had the Nike Label. Those items that the researcher identified with the Nike label were mainly sport and casual wear such as Jeans and swimming costume.

Surprisingly, the researcher identified that most of Nike products are not manufacture in U.S., which is the head office of the company, but instead are manufacture in other countries such as Indonesia, Egypt and China. The researcher also identified that some of the items in the house had the brand of the Italian company referred, as Italian Moda.

When the researcher conducted some investigation, she found that Italian Moda Company makes its products from its home country Italy. This was contrary to the earlier findings. Nike and M & S companies and ShirtsMyWay, which are the United States-based companies, do not produce most of their products as indicated from the search.

These companies contract other companies outside the United States to assist them in manufacturing their products. Similarly, Puma and Getwear, which are European based companies, located in Germany and Scotland; outsource production of its products to Asian and African countries.

Various factors make companies to outsource the manufacturing of household items. Some companies outsource manufacturing to save the costs of manufacturing. Costs of labor are the greatest costs of manufacturing. Having employees means paying the workers competitive wages, as well as offering them medical benefits. In United States of America and Europe, the average cost of labor is very high as compared to other countries that are located in Asia and Africa.

Therefore, in order to cut down on the costs of production, Americans and European countries tend to outsource the manufacturing of household items. Low cost of production is important as it helps firms to sell their products at a discounted rate essential in enabling firms’ products to compete healthy with competing brands.

Moreover, the United States of America companies that manufacture clothes and household items tend to outsource most of their manufacturing processes in order to save the overhead costs associated with manufacturing. Off-shoring of manufacturing process is important in helping a firm save overhead costs that involve utilities expenses such as water and electricity bills and maintenances expenses.

There are those companies that outsource manufacturing in order to have more flexibility in their operations. Outsourcing process involves contracting companies to manufacture goods under the trademark or brand of a different firm. Contracted companies can manufacture products for more than one company and in some cases even manufacture products for competing brands.

Companies contract those firms that have more capacity than they do, for producing products. This is important because the contracted company has the capacity to respond to increased production capacity because of seasonal high demand of the product. Although the increased production comes with extra costs, it is more economical than the costs of the company expanding its production facility and the high demand may not last for long.

Some companies outsource manufacturing process in order to focus in other things. For example, a company that is not very competent in manufacturing may opt to outsource its production to concentrate on the area where it is more competent in, such as sales and marketing. The main objective for outsourcing is to enhance profits by cutting down the costs of production.

When companies outsource the manufacturing processes, they are in a better position to concentrate on the areas where they are more competent in. They enhance their performances by investing their resources both human capita and financial to areas of their expertise to revenue and profit. Generally, outsourcing cuts down the costs of production, therefore, if the company enhances its revenue generation by focusing on sales and marketing, it is important in enhancing the firm’s profit margin.

In conclusion, the researcher undertook the task of identifying various household items, as well as clothes and categorizing them according to their country of origin and brands. The researcher was surprised to find that most of the items identified had a label of a brand that was based in a different country their country of origin. The research indicated that many international corporations based in Europe and the united States opt to outsource their manufacturing processes to African or Asian countries where the costs of productions are low.

Executive Summary

The ice cream industry is a fast-growing and successful industry in many countries. To remain successful, effective cold chain management is needed at every stage of its production and delivery. The main purpose of this research paper is to explore cold chain logistics applicable to ice cream manufacturing. The first section of the project will introduce the readers to the product and briefly describe its origin and main ingredients. After that, an overview of the quality and safety standards in chilled and frozen products will be made. The most important sections will focus on the temperature management, temperature abuse, and shelf-life of ice creams. The role of good packaging will also be discussed in the paper. Finally, Singapore’s legal requirements for the cold chain management of ice cream will be listed at the end of the project.

The main method of data gathering was a literature review. The author reviewed many scholarly articles, websites, and legal documents to find all the necessary information about the cold chain management of ice creams. Research showed that different standards have different requirements for freezing, storing, handling, and transporting this perishable product. However, it is internationally agreed that it should never be allowed to freeze, store, and hold ice cream at a temperature higher than –18°C. The legal requirements for packaging are also similar. Most countries recommend using packages made of safe materials and indicate the most important information on them. However, the shelf life is usually not mentioned in the container because it depends on various factors. The main recommendation for processing, handling, transporting, and storage of ice cream is to provide strict temperature control at each stage and not allow temperature fluctuations.

Introduction

Ice cream is a frozen dairy product produced through freezing milk, condensed milk, or cream with other additives. This perishable product also contains such ingredients as sweeteners, colors, flavors, stabilizers, as well as nuts, chocolate, fruits, candy pieces, and egg products (Deosarkar et al., 2016). Ice cream originates from Europe, but it came later to the United States, where the ice cream industry began (Deosarkar et al., 2016).

Nowadays, the ice cream industry is a growing sector in the food industry. Its success depends on the effective management of the cold chain. If every step, beginning with ice cream production and ending with the delivery to consumers, is under control, the success of this industry will continue. Thus, it is vital to control the cold chain to preserve the quality and safety of such a perishable product as ice cream and comply with all legal requirements. This practical guide will focus on the main recommendations for the production, temperature management, freezing, temperature abuse and monitoring, packaging, and delivery of ice cream.

Quality and Safety in Chilled and Frozen Foods: An Overview

To ensure the quality and guarantee the safety of chilled and frozen foods, an uninterrupted cold chain should be preserved in this industry. In the cold chain, temperature conditions are the key factor impacting the quality and safety of the final product. It is of high importance to preserve low temperature to minimize the risk of foodborne diseases, maintain the quality of a chilled or frozen product, and eliminate the growth of spoilage-causing bacteria (Wu & Hsiao, 2020).

In different countries, the regulations for temperature requirements may be diverse. For example, in the United States, the temperature of chilling must be colder than 4°C, and the temperature of freezing must be lower than –18°C (Wu & Hsiao, 2020). In Japan, these temperatures must be colder than 10°C and –15°C, respectively (Wu & Hsiao, 2020). In any case, all these regulations and requirements are aimed to increase the quality of a chilled or frozen product and guarantee its safety for the consumers.

The cold chain process begins when the supplier provides the raw material for the product and ends when the customer brings the product to their refrigerator. There are several factors that should not be ignored during the cold chain process. Thus, the suppliers, manufacturers, and sellers should preserve hygiene at each stage of the product’s existence. Products should be chilled or frozen rapidly and properly right after their manufacture.

Ice cream is a perishable frozen product, so it should not be chilled. The quality of ice cream depends on production and storage. One of the factors influencing the quality of ice cream is ice crystal size (Buyck et al., 2011). At the beginning of the freezing process, ice crystals appear.

Heat is removed quickly during the freezing process, and the air is incorporated into ice cream to achieve a smooth and soft texture (Buyck et al., 2011). The size of ice crystals depends on the speed of the freezing process: the faster it is, the smaller the ice crystals will be in the product. Consequently, the quality of ice cream will be much better, and the product will be more desirable for the customers since it will be less icy. However, some other factors may influence the size of ice crystals. For example, low freezing point, low solids content of the additives, long storage time, insufficient stabilizer, high draw and storage temperature, and some other factors may result in iciness of the final product.

Temperature Management

Ice crystals will grow when ice cream warms because some crystals will melt and attract water to other crystals, thus creating bigger ice crystals. If the ice cream is stored at –5°C, recrystallization will be inevitable (Buyck et al., 2011). Moreover, if the amount of solid contents increases to 34-38 percent, recrystallization will also occur rapidly (Buyck et al., 2011). Fat has a great impact on the ice cream texture too. It decreases the size of ice crystals and produces a lubricating effect. Ice cream with a higher content of fat seems smoother and less icy than light or fat-free ice cream.

Microbiological Safety

Since ice cream is a milk product, it is also a good place for microbial growth. Moreover, any of the ice cream ingredients may also “contribute microorganisms and affect the quality of the product” (Mohammed et al., 2019, p. 111). Such pathogens like “Listeria monocytogenes, Salmonella species, Staphylococcus aureus, Yersinia enterocolitica and Bacillus cereus” may appear in the ice cream at different stages of its production, delivery, and storage (Saudi et al., 2013, p. 2193). Hazard Analysis and Critical Control Point (HACCP) was created to control the microbiological safety and quality of the ice cream (Saudi et al., 2013).

Hazard analysis is essential for identifying and assessing the ice cream production process and outlining chemical, biological, and physical characters that may affect the product’s quality and safety (Lu et al., 2014). Ice cream production may have quality and safety hazards at each level of its technical process.

The main principles of HACCP involve:

• identifying potential hazards,
• determining the critical control points (CCPs),
• identifying actions needed to control the CCPs.

In the case of ice cream production, it was determined that the main CCPs are pasteurization and freezing (Lu et al., 2014). On the stage of pasteurization, there is a hazard of living pathogens left in the product. Therefore, it is important to keep pasteurization temperature at 80-85°C and maintain it for 15 minutes (Lu et al., 2014). At a freezing stage, there is a risk of pathogen contamination and growth. Thus, processing should be located at “clean operation area, 55-60°C, 3% sodium hydroxide wash, on: pipe entrance and inner wall, vat. 93°C, water wash for 10-15 min.” (Lu et al., 2014, p. 394). If the plant has some problems with any of these issues, they should be modified accordingly to minimize the quality and safety hazards.

Extended Quality Shelf Life

Adhering to the main principles of HACCP may help extend the quality shelf life of the ice cream. However, the ice cream usually does not have a shelf life, so it is important to assess it with the help of accelerated testing (Park et al., 2018). This type of testing allows the assessment of microbiological and sensory conditions of the ice cream and the changes in pH. Research showed that the shelf life of ice cream was “24.27 months at –18°C, 2.29 months at –6°C, 0.39 months at –1°C, and 0.15 months at 4°C” (Park et al., 2018, p. 1222). Although these results cannot be applied to all ice creams, they can be used as basic data to establish the shelf life of ice creams.

Temperature Control and Retention of Nutrients

One can see that proper storage is important for the successful marketing of such a perishable product as ice cream. Moreover, conditions under which it is produced at a factory and held in transit and in sales outlet are also essential for the quality of this frozen product. The International Dairy Foods Association (2021) recommends storing ice cream at –18°C or cooler and not admitting the supermarket’s freezer temperature to be above –12°C. Otherwise, the product will be spoiled, and it should not be sold to the customers. Similarly, if the storage temperature is higher than –28.9°C, the ice cream will be damaged too, and its quality will suffer significantly (Buyck et al., 2011). Thus, it is vital to preserve an optimal temperature at each stage of ice cream production, transportation, and storage.

Temperature control is essential for the retention of nutrients in the ice cream. Moreover, the fortification of ice creams with nutrients has a positive impact on their emulsion stability (Sikdar et al., 2020). Ice cream can be enriched with anti-oxidants, fish proteins, dietary fibers, and other minerals and trace elements. However, with the increase of storage life or errors at any stage of manufacture, the nutrition incorporated in the product might be lost (Sikdar et al., 2020). Therefore, it is highly important to preserve the temperature regime, not extend shelf life, and control every stage of ice cream production to maintain its nutrition value and quality.

Freezing Foods for Optimum Quality

Since ice cream is a frozen product, it cannot be preserved without freezing. The quality of ice cream depends on many factors, including the choice of raw materials, proper pre-freezing processes, choice of a freezer and freezing temperature, storage options, and package choice. The freezing of ice cream is conducted in two stages: dynamic and static. During the dynamic freezing, the mix of ice cream components is frozen quickly while being stirred to saturate with air and minimize the size of ice crystals (Masuda et al., 2020). Static freezing is a rapid method of heat removal, and it occurs without agitation.

Dynamic freezing is more important because it does not change the microstructure of the ice cream, as static freezing does. The ice cream mix is introduced to the freezer at 25°C, and the agitation process begins and continues for 25 minutes without freezing (Masuda et al., 2020). After that, the mixture is cooled below its freezing temperature (–5°C), and the process of aging begins at –4°C and continues from 4 to 24 hours (Giudici et al., 2021). The second freezing step occurs at –25/ –30°C, and during this stage, a harder texture and longer shelf life are achieved (Giudici et al., 2021). If any of these temperature regimes are violated, the ice cream quality and safety will be affected.

Temperature Abuse and Shelf Life of Ice Cream

As is has already been mentioned, temperature control is essential for high-quality ice cream production and storage. The International Dairy Food Association states that if the temperature of ice cream storage is higher than –28.9°C, the product should not be sold at retail due to an incurred heat shock (Buyck et al., 2011). Temperature abuse during storage and delivery affects the chemical and physical characteristics of the ice cream negatively. For example, during storage, temperature fluctuations may be 2-3°C, while during transportation, the temperature may increase by 3-8°C (Leducq et al., 2015). As a result, the size of ice cream crystals increases while their quality and shelf life decreases.

Air cell structure will also change if the storage temperature is abused. Appropriate air cell structure guarantees that the ice cream will have a light texture and proper melting features. The mean diameter of air cells is 40 μm, demonstrating a high-quality product (Park et al., 2015). However, when the temperature is higher than –25°C, these cells will accrete to bigger cells, and the structure of the ice cream will coarsen (Park et al., 2015). As a result, the product’s quality will worsen, and its shelf life will be reduced.

As it was already mentioned, there is no law that regulates the shelf life of ice cream. In the United States and some European countries, it is not mandatory to indicate an expiration date on an ice cream package (Park et al., 2018). However, temperature abuse during pasteurization may lead to the growth of microbes and bacteria, which will continue to grow during improper storage (Park et al., 2018).

For example, Listeria monocytogenes was found in many ice creams in the United States and led to numerous foodborne outbreaks (Park et al., 2018). Accelerated shelf-life tests showed that the physical and chemical characteristics of ice cream samples reached their limit after 24.27 months under –18°C (Park et al., 2018). The higher the storage temperature was, the shorter the shelf life would be. One can see that it is crucial to control the temperature at each stage of the cold chain of ice cream to preserve it fresh, tasty, and healthy.

The Role of Ice Cream Packaging in the Cold Chain

The primary function of packaging is to protect the ice cream from damage and contamination during its storage and transporting. Moreover, a package must contain information about the ingredients, nutritional value, serving suggestions, and other useful data (Deosarkar et al., 2016). A good package preserves the ice cream quality, allowing it to remain the same from the moment of its manufacture to the delivery. Ice cream packages may be subjected to shock, vibration, compression, and heat shock during distribution (Deosarkar et al., 2016). If the quality of a package is good, the ice cream will be protected from short-time temperature changes, dehydration, extraneous odors, and photooxidation (Deosarkar et al., 2016). Thus, a good package protects the ice cream from outer factors and preserves its quality.

In addition, the packaging is important for the ice cream hardening process. During the manufacture, the package is used as a container, in which the ice cream is being hardened to a finished product. Containers are usually made of different materials, but plastic and paper are most frequently used. The role of such containers is to give the ice cream a desired form and size and make it convenient to store and transport. An ideal package will not impact the quality of the ice cream, prevent it from melting, protect it from contamination, and preserve its size and form. Moreover, packaging should be safe and stable over the low-temperature range. Recoverable and reusable packages will attract more customers and create a positive brand image. One can see that packaging plays an important role in the ice cream cold chain.

Real-Time Temperature Monitoring Technology in the Ice Cream Cold Chains

Real-time temperature monitoring technologies are used to control the temperature of food products at different stages of their cold chain. Such tracking systems help preserve safe temperature conditions during the transportation process. Real-time temperature monitoring is more important for highly decaying products, such as meat, poultry, dairy and milk, seafood, as well as non-food products, such as vaccines and other pharmaceuticals. Since ice creams are not a highly decaying product, real-time temperature tacking is not so important. It can be used during the transportation and delivery processes to prevent the product’s melting and wastage and minimize the risk of its quality.

At the same time, real-time temperature monitoring may be used if the production plant has outdated equipment and often experiences temperature fluctuations. In such cases, remote temperature monitoring may help save the manufacture from losses. Nevertheless, even if an ice cream plant is equipped with the most modern freezers and thermometers, real-time temperature monitoring technologies will reduce maintenance costs and ensure the high quality of the product.

Singapore Legal Requirements for the Ice Cream Cold Chain Management

The Singapore standards for cold chain management of chilled and frozen food are aimed to guarantee the safety and high quality of these products. However, these standards do not regulate the cold chain management of ice cream. General legislative requirements related to the cold chain management of frozen products include:

• SS 668: 2020 Cold chain management of chilled and frozen foods:
  • sets out the General Requirement and Code of Practice for the management of chilled and frozen food (New Singapore Standards, 2021);
  • establishes policies, technical and organizational requirements needed to preserve appropriate cold chain management process.
• The Australia New Zealand Food Standards Code.
• State and Territory Food or Health laws.
• Australian Cold Chain Guidelines:
  • Contains the recommendations from the legislative documents mentioned above;
  • Is aimed to preserve food quality and safety “as they are handled, transported, and stored” (Australian Cold Chain Guidelines, 2017, p. 5).

Some of these legal regulations will be listed further. Thus, Section 3.2 of the Australian Cold Chain Guidelines 2017 strongly recommend to transport, store, and handle frozen products, including ice cream, at temperature never warmer than –18°C. Section 3.6 reviews the problem of heat transfer on the example of ice cream. According to this section, ice cream should preferably be stored between –22°C and –30°C (Australian Cold Chain, 2017, p. 12). The Guidelines explain why it is important to preserve the temperature not higher than –18°C during the handling and storage processes.

Section 4.2 of the Guidelines strictly recommends that the maximum out of refrigeration time limit must be 60 minutes (Australian Cold Chain, 2017, p. 13). However, this recommendation is only applied when the ice cream is unloaded and dispatched at +5°C to +15°C air-conditioned temperature zone. If the temperature is 0-+5°C, the time limit is extended to 90 minutes (Australian Cold Chain, 2017, p. 13). Finally, the Guidelines recommend to load ice cream last and unload it first direct from and to the freezer. The maximum time limit for unloading or dispatching ice cream in usual conditions is 20 minutes (Australian Cold Chain, 2017, p. 14). Other recommendations are general and can be applied to different frozen products.

References

Australian cold chain guidelines 2017. (2017). Australian Food and Grocery Council. Web.

Buyck, J. R., Baer, R. J., & Choi, J. (2011). Effect of storage temperature on quality of light and full-fat ice cream. Journal of Dairy Science, 94(5), 2213-2219. Web.

Deosarkar, S. S., Khedkar, C. D., Kalyankar, S. D., & Sarode, A. R. (2016). Ice cream: Uses and method of manufacture. Encyclopedia of Food and Health, 391-397. Web.

Giudici, P., Baiano, A., Chiari, P., De Vero, L., Ghanbarzadeh, B., & Falcone, P. M. (2021). A mathematical modeling of freezing process in the batch production of ice cream. Foods, 10(2), 334. Web.

International Dairy Foods Association. (2021). Tips on storing & handling ice cream. Web.

Leducq, D., Ndoye, F. T., Charriau, C., & Alvarez, G. (2015). Thermal protection of ice cream during storage and transportation. 24ième Congrès International du Froid ICR 2015. Jokohama, Japan. Web.

Lu, J., Pua, X.-H., Liu, C.-T., Chang, C.-L., & Cheng, K.-C. (2014). The implementation of HACCP management system in chocolate ice cream plant. Journal of Food and Drug Analysis, 22(3), 391-398. Web.

Masuda, H., Sawano, M., Ishihara, K., & Shimoyamada, M. (2020). Effect of agitation speed on freezing process of ice cream using a batch freezer. Food Process Engineering, 43(4), 1-8. Web.

Mohammed, S. S. D., Wartu, J. R., & Akpami, J. N. (2019). Bacteriological quality assessment of ice cream sold in selected eateries within Kaduna Metropolis. Science World Journal, 14(1), 111-118.

New Singapore standards for cold chain management of chilled and frozen food to assure food safety and quality. (2021). MR No.: 071/21. Web.

Park, J.-M., Koh, J.-H., & Kim, J.-M. (2018). Predicting shelf-life of ice cream by accelerated conditions. Korean Journal for Food Science of Animal Resources, 38(6), 1216-1225. Web.

Park, S. H., Jo, Y.-J., Chun, J.-Y., Hong, G.-P., Davaatseren, M., & Choi, M.-J. (2015). Effect of frozen storage temperature on the quality of premium ice cream. Korean Journal for Food Science of Animal Resources, 35(6), 793-799. Web.

Saudi, A. M., Latif, E. F.A., & Dabash, S. M. (2013). Evaluation of microbiological safety of an ice cream production line after HACCP implementation. International Journal of Biology, Pharmacy and Allied Sciences (IJBPAS), 2(12), 2192-2203.

Sikdar, D., Nath, R., Bandyopadhyay, K., & Mollick, I. (2020). Fortifications in ice-cream with enhanced functional properties: A review. International Journal for Modern Trends in Science and Technology, 6(5), 131-138. Web.

Wu, J.-Y., & Hsiao, H.-I. (2020). Food quality and safety risk diagnosis in the food cold chain through failure mode and effect analysis. Food Control, 120, 1-9. Web.

Introduction

Competitiveness is increasingly becoming a necessity for companies that want to excel in this competitive world. Most production companies have employed various mechanisms to enable them maximize their profitability.

However, this has become difficult as more competitors come into play, in effect, restricting such improvements on manufacturing cost reduction rather than on increasing the prices of finished products. Among the processes involved, is ensuring a proper facility layout, which is essential in providing high quality finished products at a lower production cost. Facility layout involves the physical arrangement of all elements required for production of goods.

When this is done, the processes involved takes less time, minimizing cost of production and hence enhancing quality of goods produced. This is essential in promoting efficiency and production cost reduction which is instrumental to the creation and sustenance of competitive edge. This paper will explore case study of a small medium industry to investigate the best facility layout using interactive WITNESS software (Roslin 412-421).

Company Background

The case study was done on Dinamika Pelumas Sdn., which manufactures solvent and lubricant. This company was started in 2007 and is categorized as a (SMI) small medium industry. The industry is located in Malaysia and manufactures various kinds of products; these include metal working fluids, oil for the compressors, gear, hydraulic and engines, which include marine types.

Other products include synthetic oil, automotive as well as industrial oil; they also manufacture greases which are essential in the automotive industry. Facility layout is very important in production; this is because it enables clear and concise planning to produce high quality products.

SMI industries such as Dinamika Pelumas produce various types of automotive products and they therefore require a proper layout facility to facilitate a progressive production. In this regard, the case study explores various ways through which the best facility layout would be chosen to improve production (Roslin 412-421).

Data Collection

The process of production is divided into two, the one which involves manufacturing and preparation of the lubricant, while the other process involves its filling and packaging. The company has an area of about 1081.5 square feet which is reserved for production. Facility layout involves arrangement of the equipment required for production in that area.

To achieve this, the equipment needs to be collected and placed in their designed positions. This equipment includes various machines, containers, worktables as well as tanks. The company redesigned their ways of production to the more effective (MTO) made-to-order method, in which products are produced on order. This helps in influencing the cycle of production process, which is closely aligned to the customer orders.

This is mainly done because of the small area of production which restricts storage of finished products for more than 24 hours after completing the process of manufacturing. These products are usually delivered straight to customers immediately after production (Roslin 412-421).

In laying out the flow pattern, three considerations can be followed. These include the need to minimize overall cost of implementing the flow pattern, desire to maximize direction of flow paths and the company’s endeavor to minimize length of flow path. These are aimed at mitigating on backtracking flow as well as stopping interruptions that may occur during process flows. The required kind of flow is that which allows effective pattern of flow path from initial point all the way to final station.

Due to inadequate space as well as limitations on the fix location of the two large oil base tanks which are near the big door (main door), two patterns or facility layout designs were employed. These were the Straight line flow as well as the U-shaped flow in the second and first halves of process respectively. In essence, design layout1 was U-shaped, while the design layout2 was S-shaped (Roslin 412-421).

Results and Discussion

The design layout which is proposed for this production line is one where facility layout is placed in accordance with the standardized sequence of activities, operations as well as production tasks.

The layout design also depends on the specific product types manufactured by the company. In this case, only one product is considered, and this is lubricant. The other special machines such the blending machine, induction sealing machine along with filling machine are arranged in a fixed lace that would match the specific processing requirements of the product.

Two facilitation layouts have been designed in accordance with the collected data. Difference is only encountered in the ground floor (First layer), while similarity is mainly in the second floor. The first design involves combination of U-shaped and Straight line flow pattern. The latter is utilized in the second half of the flow pattern while the former is used in the first half of the process. The figure 1 below shows equipment located in the production area (Roslin 412-421).

Fig. 1 Equipment located in the production area

Source: Roslin

Fig. 2 Precedence Diagram Solution using Longest Work-Element Time Rule.

Source: Roslin

Comparison of two Alternative Designs

By comparing the two layouts designs, it is found that the more preferable of the two is the U-shaped flow pattern. This is mainly because the length of flow path is shorter i.e. 37 ft. as compared to the other flow pattern, whose length is 46 ft. This is helpful in increasing the rate of production as it reduces the throughout time. Furthermore, U-shaped flow pattern provides a wider aisle space area than in the S-shaped design (2 ft.).

This extra space provides the company with space for material handling purposes. For instance, it can be used as a path for forklift. In choosing the best layout, prioritization matrix was used and the layout with the highest results chosen. This is a brainstorming exercise that puts in place requirements of the company as well as planers’ choice. U-shaped flow pattern scored 236 points, which was higher than that of Straight-line pattern which scored 200 points (Roslin 412-421).

WITNESS Simulation

This is simulation software employed in determining line efficiency of the designed layout. It is built on WITNESS window and is also based on arrangement of workstations in the new layout design. The model balancing is according to CMOM along with manual calculations. The U-shaped model and S-shaped models are as shown in the figures 3 and 4 below (Roslin 412-421).

U-shaped flow pattern design for the first half of the process as shown in the WITNESS window

Source: Roslin

S-shaped flow pattern design for the first half of the process as shown in the WITNESS window

Source: Roslin

Fig. 5 shows a Straight Line flow pattern as shown in the WITNESS window

Source: Roslin

Simulation Results

The simulation results show that the line of efficiency of U-shaped pattern is better than that of S-shaped pattern. This is well portrayed in the Idle and Busy percentage score in which U-shaped flow scores higher. In addition, the overall path travelled by the U-shaped pattern is less than that of S-shaped pattern (Roslin 412-421).

Conclusion and Recommendation

The study was aimed at establishing the best facility layout model for the lubricant manufacturing company. WITNESS software was utilized in analyzing as well as simulating the model build. This model build was structured in accordance with the two new alternatives for flow pattern layout.

These layouts were U-shaped and S-shaped flow pattern. The solutions resulted in a higher score for U-shaped flow pattern as compared to the S-shaped flow pattern. U-shaped flow pattern is therefore the best design layout and should be chosen by the company for implementation in their production line (Roslin 412-421). This is because it will enhance their production rate as well as reduce the throughout time.

Work Cited

Roslin, Eida. “A Study on Facility Layout in Manufacturing Production Line Using WITNESS”. APIEMS 2008 Proceedings of The 9th Asia Pacific Industrial Engineering & Management Systems Conference. 2008. Print.

“The Bureau of Labor Statistics (BLS) contains the Occupational Injury and Illness Classification System (OIICS), which is used in the Census of Fatal Occupational Injuries (CFOI)”(Bhushan 1).In addition to this, the “OIICS is used in the Survey of Occupational Injuries and Illnesses (SOII) to code various incidents of the individual injury or illness reported”(Bhushan 1).

According to Bhushan, the “OIICS provides a structure to classify the nature of the injury and part of body affected; source and secondary source of the injury; and event or exposure that precipitated the injury”. This paper looks at one of the records contained, regarding injuries, illnesses and fatalities in food manufacturing for the year 2008(Bhushan 1).

Introduction

The food manufacturing industry is a large industry and has many workers involved in various fields including processing, packaging, and transportation of the farm produce, as they increase the value of the agricultural products for use in grocery stores and households. Most of the workers in this industry are found in the production department, where the environment is diverse. This exposes them to a variety of safety and health threats.

Workers in the manufacturing industry are more prone to injuries, illnesses and fatalities than other industries. In addition to this, the incidences that occur in the manufacturing industry usually require the workers to be either transferred or restricted from going to work(Olowogbon 74).

According to the North American Industry Classification System (NAICS), the highest employer in the manufacturing industry is animal slaughtering and processing, while the least is seafood product preparation and packaging. According to the same statistics, the food manufacturing industry gives employment opportunities to about 1.5 million people annually.

Nonfatal Injuries and Illnesses

The food manufacturing industry indicated higher rates of both injury and illnesses than the manufacturing industry in general, in 2008. These rates of incidences are also higher than those for private industries. The range of injuries for every 100 full-time workers was 4.5 to 7.5, with the least injuries being recorded in the grain and oilseed milling industry, and the highest in the animal slaughtering and processing industry(Bhushan 1).

For easy classification of the incidences, they are divided into three sections namely: those with days away from work; those requiring a job transfer or restriction; and other cases. The manufacturing industry recorded a higher number of workers in the second category than the first one. The statistics also indicted higher injury rates in the second category for food manufacturing, at 2.5 cases for 100 workers, than the private industry at 0.8 cases, for 100 workers.

The number of injuries requiring the workers to take a break from work was found to be significantly higher in the food manufacturing industry than the private industry. Among the sub industries in the manufacturing industry, it was observed that the dairy product manufacturing industry resulted in more serious injuries, leading to a higher number of workers with days off work (Bhushan 1).

It was observed that the most common injuries were sprains and strains, recording over 30% of all injuries and illnesses. These injuries were due to overexertion while doing manual tasks such as lifting or pushing. These injuries resulted in the high rate of days away from work. The highest sources of injuries and illnesses were flour surfaces and containers.

Another cause for serious injuries requiring home rest was musculoskeletal disorders (MSDs), defined as injuries or illnesses that comprise:

“sprains, strains, tears; back pain, hurt back; soreness, pain, and hurt, except the back; carpal tunnel syndrome; hernia; or musculoskeletal system and connective tissue diseases and disorders where the event or exposure leading to the injury or illness is bodily reaction/bending, climbing, crawling, reaching, twisting; overexertion; or repetition”(Bhushan 1).

The incidence rate of cases involving MSDs are given for every 10,000 workers, due to their wide incidence numbers.

The food manufacturing industry ranks top among the industries with high rates of illnesses and incidences, though this is just under 7% of the incidences in the private industry. In the study year, 2008, the incidence rates in the food manufacturing industry were about four times that of the private industry.

Out of the recordable illness cases, which include skin disorders, respiratory problems, poisoning and hearing loss, workers in the food manufacturing industry indicated higher chances of suffering from hearing loss, and less of respiratory problems, than the private industry (Bhushan 1).

The workers in the food manufacturing industry who are most prone to injuries and illnesses are those in production, with about 50% of the industry incidents happening to them. The production category in the food manufacturing industry can be further sub-divided into various occupation groups, including: “supervisors of production workers, assemblers and fabricators, food processing workers, metal and plastic workers, plant and system operators, and other production workers” (Bhushan 1).

The statistics indicated that the food processing workers as well as other production workers represented more than 85% of the injuries and illnesses occurring to workers in the food manufacturing industry(Bhushan 1).

Fatal Workplace Injuries

An increase in the number of fatalities was recorded in the food manufacturing industry from 2007 to 2008, making it the highest ranked manufacturing industry with fatal workplace injuries. Out of the various activities in the food manufacturing industry, the transportation industry recorded the highest fatalities.

This was attributed to fires and explosions in the line of duty. Fatalities were also observed to result from contact with objects and equipment. The sub-industry with the highest number of fatalities in food manufacturing was the sugar and confectionary industry. “The increase in number of deaths in this industry was due to the explosion of a sugar factory in Port Wentworth, Georgia, in 2008” (Bhushan 1).

“There was about 75 critical injuries by workers in 2008, most of which were observed to result from severaldistressing injuries”(Bhushan 1). Traumatic injuries accounted for about half of those injuries caused by multiple traumas.

“The primary source of fatal workplace injuries in the food manufacturing industry in 2008 were caused by vehicles, including highway trucks and automobiles; while the secondary source included persons, plants and minerals”(Bhushan 1). Another relevant statistic was the gender of the industry incidences.

It was observed that most of the workers who had fatal injuries were men, aged between 36 and 65. About half of this number was taken up by white and non-Hispanic workers, with equal race distribution. Most of the fatalities in the food manufacturing industry in 2008 were observed to come from the production and transportation and material moving occupations(Bhushan 1).

Conclusion

Out of all the people in the private industry, those working in the food manufacturing industry are more vulnerable to both fatal and nonfatal injuries. Workers in the food manufacturing industry are also observed to acquire more minor injuries than serious ones, and therefore end up with either job transfers or restriction as opposed to rest days.

Most of the workers in the food manufacturing industry work in the field of production, where most of the injuries occurring are nonfatal; however, the production sub-division of transportation and material moving records the highest number of fatal injuries (Bhushan 1).

Works Cited

Bhushan, Nivedita L. Injuries, Illnesses, and Fatalities in Food Manufacturing, 2008. 21 January 2011. Web.

Olowogbon, Samuel Toyin. “Health and Safety in Agriculture and Food Security Nexus.” International Journal of Emerging Sciences (2011): 1(2), 73-82. Print.

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 company’s 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 material’s 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 customer’s 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 Presario’s 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 customer’s 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 Riordan’s 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 industry’s 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.

Japan’s Toyota motor manufacturing company, for instance, has gained a foothold of the American domestic market following the company’s 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: Porter’s Five Forces Analysis

Buyers’ bargaining power

Buyers have a moderate bargaining power. This is because the global population, which forms the industry’s 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 country’s 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.

Lean technique is one of the strategies being adopted by various manufacturing companies. A pilot project is important in various ways. One of the significant importances of using pilot projects is that it leaves adequate room for equipping a plan for a large scale implementation by first testing the assumptions of the implementation process in a much smaller scale. Similarly, risks that may be associated with the introduction of new strategies such as introduction of lean manufacturing.

In addition, the pilot project proposed to be used in the introduction of lean manufacturing can be used to assess the impact that lean manufacturing might have on the company. The effectiveness of the new technologies can as well be assessed and compared to previous ones in terms of production. Due to the risks associated with investing in a new venture, pilot projects help reduce these risks as they require little funding than that of a large scale implementation.

As a result, pilot projects provides the evidence that ensures a company of a risk free venture as the pilot projects provides the justification for a much higher expenditure on a particular strategy implementation. Pilot projects also gives the team members a chance to gain adequate experience before engaging in the main project which is much more demanding than the pilot project (Basssi, 2010, p. 1).

This ensures efficient performance and running of the large scale employment since the team is already conversant with the whole project. Finally, pilot projects can be used to compare between two or more strategies in order to ensure that the most effective is chosen since they only involve a small scale employment.

Ways of diffusing successful change

Diffusion of successful changes may be done in several other ways besides the pilot project. One of these methods is the technology push which involves the transfer of technological innovations from the top management downwards. This is where a new strategy is implemented among the top management of an organization first and with time, in relation to the impact of that strategy to the organization, it is implemented on the subsequent levels of organizational structure.

The advantage of this method is that every individual level of organizational structure gets to be assessed on the deployment of the strategy before being implemented to the next level (Rodgers, 1995, p. 1). This method is used by individual entrepreneurs and organizations for marketing purposes.

Another method is the transfer pull method which is directly opposite of the technology push method. It involves deployment of new strategies from the lowest levels of organizational structure up to the highest. In this case, the innovations come in as demands from clients which are then implemented from the low organizational levels until they are finally approved by the top management.

This method is a little similar to the pilot project in that it leaves room for assessment as the low organizational levels try the impacts of the strategies before they are fully implemented. Therefore, this ensures that the management approves of only those strategies that have great and positive impacts on the organization (Robinson, 2009, p.1).

The final method of diffusing change successfully is the innovation re-invention method which takes into account the organizational prior conditions when employing a new strategy. This is important in keeping and maintaining the organization within its market status as it takes into consideration all the factors affecting the organization and its clients.

Reference List

Basssi, R. (2010). Practical guide to pilot projects and large scale deployment of ICTs in the education sector. Web.

Robinson, L. (2009). A summary of diffusion of innovations. Web.

Rodgers, E. (1995). Diffusion of innovations. Web.