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Total Cost Minimization

With the advance in the fields of Science and Engineering, the manufacturing field
changed rapidly. Earlier the manufacturing industry relied on workmanship and the
use of human resources meant longer manufacturing time, lesser efficiency and
required a lot of capital to maintain. This was a great challenge posed to the
manufacturing industry and was the reason for high costs involved in manufacturing.
Therefore engineers had to resort to total cost minimization strategies to reduce the
heavy costs involved.

The initial process involved in the manufacturing of

automobiles was so inefficient that companies found it hard to satisfy their customers
The ford motor company under the leadership of Sir Henry Ford had complete
monopoly over the production of automobiles. The main issue involved was
satisfying the demand of the customers which was ever growing. At that time the
production of one car was a lot and commercializing the automobile was an uphill
task. Automation at that time was at its early stages, at that time there were no
computers and therefore no simulation[1]. The manual production of automobiles
relied heavily on the experience of the engineers and the foreman. This particular
aspect was very difficult to sustain. Only the elite at that time could afford such an
automobile. However today we owe the advances in production and manufacturing
engineering for the low cost production of automobiles[2].
To overcome the issues of high cost of manufacturing automobiles, Henry ford
came up with the idea of an assembly line[2]. The concept of the assembly line
involved mechanically moving parts of the automobile to the assembly and moving

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the semi finished assembly from work station to work station, thereby reducing the
assembly time significantly and also resulted in less labor than having workers carry
the parts to a stationary piece for assembly[3]. Here the motion of the worker was
reduced to the extent possible. The assembly line used conveyors to transport parts,
it also had motorized vehicles like forklifts. The worker in such an environment had
his work significantly reduced to simple tasks. Highly sequential setup meant that an
automobile could be assembled in no time and this meant increased production of
automobiles for the ford company. The concept of the assembly line revolutionized
the way the automobile industry functioned. The use of interchangeable parts meant
that the work flow would be uninterrupted and this led to less wastage and the quality
of the end product drastically increased. Fords famous model T was high in demand
and the introduction of the assembly line led to the increased production of this
model. The production time for manufacturing a single car reduced from twelve
hours to just 93 minutes due to the introduction of the assembly line. This concept
allowed the ford motor company to have higher profit margins and also meant that
consumers could buy a vehicle for a fair price[3].
The lives of the workers in the automobile industry drastically changed as
their shifts reduced from nine hours to eight hours[3]. Lesser hours did not hamper
the wages of the workers as Ford doubled the wages and began paying his workers
$5 a day[3]. The concept of the assembly line revolutionized the automobile industry
and led to a lot of automobile industries coming up in the United States. Despite the
production getting somewhat automated, the demand still remained to be a major
problem. The customer had to wait for months together to wait for the production to
be complete. Today we have computerization and automation which has led to the

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cost of production to go down and automobiles are more of a necessity rather than a
Another aspect that was important in the fast manufacturing of automobiles was the
design of the automobile. Henry ford resorted to the use of common proven designs
to decrease the production time. According to him if the design was proven like the
sturdy inexpensive design of the T model he could greatly reduce the assembly time
because the parts were easier to assemble on tested designs. The process was
optimized to be used for already existing designs and Ford didnt like the idea of
changing his designs. The T model had pretty easy to use controls so that a normal
person could easily operate it and it also had cleverly designed features that made it
durable and also inexpensive. The size of the T model was also just right, therefore
Ford was very much impressed with his pre-existing designs and only focused on
increasing production rather than changing the existing features in the car[4].
Model T was a huge success for the Ford motor company but it had not been
upgraded to suit the needs of savy new customers who were awestruck by the new
Chevrolet cars that costed more than the Model T but had new features that
accounted for the increased costs. Ford refused to make changes to the T model
and thus even with the low price associated with the T model it drooped in sales and
eventually had to be replaced.
The failures of the T model made way for a new model called Model A which
had 5580 mostly new parts. The Model A overcame all the shortcomings of the T
model. Unlike the T model which was available in only one colour, it came in four
different colours. It came in wide variety of styles which included the coupe, the
business coupe , sports coupe, roadster coupe, town car and many other styles. It

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was the first car to use the conventional set of controls and also the first car to use
safety glass in its windshield. Ford also diversified sales to other countries apart from
just manufacturing in the United States[4]. The newly introduced convenience
features and cosmetic customization which ford previously neglected, led to fords
model A gaining its position as the most sold car in the world at that time. The sales
of the Model A grossed at two million worldwide which was a great feat for the
company. The era of flexible mass production had begun with the advent of the
Model A and it greatly increased the profits of the company. The cost of production of
the car went up due to the increased cost of parts for this particular model. Also the
method of production of the Model A differed significantly from that of the Model T.
The manufacturing process of Model A relied more on drop forgings more than
Model T[4].
The automation of the manufacturing processes made it easier for engineers to
counter the demand for automobiles. The increased production of automobiles lead
to high competition between the manufacturing companies which in turn led to the
improved quality and ingenuity of the automobiles being mass produced. Low costs
of production contributed to the production of low cost automobiles. However the
Ford motor company dominated the market and kept their prices higher than other

In this way companies would determine the prices of their

automobiles thereby making up for their costs[5]. The production industry today
relies on complex control systems and automation for the production of cars. Today
we have cars of all designs, shapes and sizes. Cosmetic customization is something
that is very ubiquitous today and we have new cars being launched almost every day
with a new set of features[5].

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Therefore Henry Fords concept of mass production using the concept of the
assembly line served as the foundation for the present day complex production
systems. The improvement in technology has managed to deal with the previous
problems of cost and customer satisfaction. High demand of cars can be easily met
by the production units today in fact production today exceeds the demand by a
huge margin. Automation in the field of production has led to the greatly decreased
costs in production and as a result cost effective cars have come up[5] . Customers
can now afford to buy an automobile which was nothing short of being a luxury in the
18th century. Although total cost minimization has drastically reduced costs, it has
also led to increased layoffs as most of the work today remains automated. The
disadvantage of increased layoffs is offset by the increased production and
increased ease of production of automobiles. The concept of the assembly line was
the inspiration for the complex assembly lines we have today[5].
Total cost minimization still remains the aim of most engineers in the manufacturing
industry[5]. With the evolution of technology and engineering practices we have been
able to optimize the production process and streamline it to make it much more
efficient than the efficiency of production in the 1920s when the assembly line was
first introduced in the manufacturing industry[5]. The automobile industry today not
only innovates in the areas of production and manufacturing but also in the areas of
cosmetic customization and design. The cars today are much more faster, fuel
efficient and have a wide variety of features with them. With Japanese manufacturing
companies like Toyota, Honda and Suzuki we have much more complex
manufacturing techniques and better policies in the automobile industry. We can now
say that we are living in the era of fully automated production systems[5] .

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1) "Fords Assembly Line Starts Rolling." History.com. A&E Television Networks,
n.d. Web. 27 Sept. 2015.
2) "Henry Ford and T Model." Henry Ford and the Model T. N.p., n.d. Web. 27
Sept. 2015.
3) "Assembly Line." Wikipedia. Wikimedia Foundation, n.d. Web. 27 Sept. 2015
4) "Ford Model A." Wikipedia. Wikimedia Foundation, n.d. Web. 27 Sept. 2015.
5) "Total Cost Minimization." Barbra Doziers Blog. N.p., 26 Sept. 2013. Web. 27
Sept. 2015.