Cover Image

PAPERBACK
$39.75



View/Hide Left Panel

Index

A

American Motors, 73

AT&T semiconductor production, 48, 49, 58 n.8

AT&T telephone manufacturing

background, 22-24

domestic manufacturing capacity, 24

duty costs, 31

functional drivers for OEM costs, 25, 30-34

global manufacturing network, 24, 34, 36

labor costs, 3, 21-22, 23, 24-26

load costs, 25, 26-27, 36

make to order, 33

market share, 22

materials costs, 3, 22, 23, 25, 28-30, 35, 43-44 n.3, 89-90

offshore, 23, 33-34, 42, 80

product cost analysis, 24

product reliability, 22

Project Turnaround, 22-23

quality management, 32-33

risk factors, 33-34

supplier relationships, 83

transportation costs, 31-32

in U.S., 23

work-force skills, 23

Automation

in automobile production, 15, 66-67, 70

capabilities and applicability, 16

investment returns on, 40-41

and labor cost reduction, 15, 81

Automobile production

assembly time, 70

automation in, 15, 66-67, 70

background, 62-64

costs, 68-71

foreign investment in U.S., 11, 61, 65, 68, 88

fuel economy regulation and, 62, 71-73

government interference in, 69

international movements of production capacity, 18, 64-68, 73-74

lean production, 63-64, 68, 69, 70-71

local content requirements, 71, 72, 73, 75 n.15

and market access, 18, 68, 73, 90

mass production, 62-63, 69, 71

offshore manufacturing advantages, 61, 69

supply network, 68

technological change and, 62



The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 105
Index A American Motors, 73 AT&T semiconductor production, 48, 49, 58 n.8 AT&T telephone manufacturing background, 22-24 domestic manufacturing capacity, 24 duty costs, 31 functional drivers for OEM costs, 25, 30-34 global manufacturing network, 24, 34, 36 labor costs, 3, 21-22, 23, 24-26 load costs, 25, 26-27, 36 make to order, 33 market share, 22 materials costs, 3, 22, 23, 25, 28-30, 35, 43-44 n.3, 89-90 offshore, 23, 33-34, 42, 80 product cost analysis, 24 product reliability, 22 Project Turnaround, 22-23 quality management, 32-33 risk factors, 33-34 supplier relationships, 83 transportation costs, 31-32 in U.S., 23 work-force skills, 23 Automation in automobile production, 15, 66-67, 70 capabilities and applicability, 16 investment returns on, 40-41 and labor cost reduction, 15, 81 Automobile production assembly time, 70 automation in, 15, 66-67, 70 background, 62-64 costs, 68-71 foreign investment in U.S., 11, 61, 65, 68, 88 fuel economy regulation and, 62, 71-73 government interference in, 69 international movements of production capacity, 18, 64-68, 73-74 lean production, 63-64, 68, 69, 70-71 local content requirements, 71, 72, 73, 75 n.15 and market access, 18, 68, 73, 90 mass production, 62-63, 69, 71 offshore manufacturing advantages, 61, 69 supply network, 68 technological change and, 62

OCR for page 105
trade protection, 62, 68, 69, 73 U.S. advantages, 4, 64 U.S. market share, 9, 61, 62-63 B Benchmarking products, 79 Brazil, 65 C Canada, automobile production, 65, 72, 73 Capacity utilization, 3 Capital budgeting, 40-41 costs, 2 equipment investments, 26 Chrysler, 65, 73, 83 Color picture tubes, see Toshiba color picture tube manufacturing Competitiveness cost determinants, 2 firm size and, 18 management and, 70 strategic options, 12 see also U.S. competitiveness Concurrent engineering, 16 Consumer electronics, see AT&T telephone manufacturing AT&T experience, 22-36 foreign investment in U.S., 10 labor costs, 15-16, 17-18, 26, 92 Toshiba experience, 36-41 offshore production, 17-18, 84-85 U.S. withdrawal from, 9, 14, 28, 84-85 Corporate Average Fuel Economy regulations, 71-72 Cost of goods sold (COGS) components of, 19 n.1, 24 labor component, 15, 21, 25, 90 load component, 25, 26 materials component, 25, 28, 90 sources of improvement in, 14-15, 16-17 telephones, 23 Costing, target, 15 D Decisions model, strategic business, 2, 11-17 Demand enhancements, 14 Developing countries automobile production in, 65 duty exemptions and reductions, 31, 46 Digital Equipment Corporation, 13, 53, 54-55, 80, 98 n.2 Duties, 31-32, 78; see also Trade policies E Eads, George C., 70 Economies of scale, 63 Equipment depreciation, 26, 50, 53 Electronics semiconductor industry links with, 46 see Consumer electronics England, 64 Europe automobile manufacturing, 65, 70, 73 semiconductor manufacturing, 80 trade barriers, 46 Exchange rate differentials and effective U.S. industrial base, 88, 89 and foreign investment in U.S., 68, 69, 88 and manufacturing costs, 3, 22, 39, 41, 42, 43, 49, 56, 83 Expansion of business factors affecting, 12-13, 79 minimum scale requirements and, 13

OCR for page 105
F Ford, Henry, 62 Ford Motor Company, 64-65, 71, 72, 73, 83, 91 Foreign direct investment in, 7 Fujitsu, 48 G General Motors, 48, 64, 65, 66-67, 70, 73, 83 Germany automobile production, 72 worker productivity, 40 Government incentives, 55-56 Greenfield factories, 16 advantages, 90 automobile production, 65 salary of key positions, 27 purpose of, 43, 82 H High-technology products load costs, 26 Hitachi, 48, 49, 58 n.8 Honda, 64, 73, 74 Hong Kong, 23, 24 Hyundai, 65 I IBM, 48, 49, 80 Intel, 47, 48, 53, 58 n.7 Inventories carrying costs, 4, 33, 78 just-in-time systems, 16 work-in-process, 63, 78 J Japan automobile industry, 14, 61, 65, 68, 70, 72, 73, 74, 86 investments in U.S., 14, 49, 61, 65, 68, 73, 88 keiretsus, 50 labor costs in, 38 manufacturing costs in, 3 materials costs in, 37 productivity rates, 39-40 semiconductor industry, 47-48, 49, 50, 52-53, 58 n.6 technology access in, 80 Joint ventures, 7, 47, 57, 70, 98 K Korea, 23, 65 L Labor costs, 53-54 analysis, 24-26 automation as method of reduction, 15, 70 as a component of COGS, 15, 21, 25 direct, 1-2, 15-16, 21, 22, 24, 38, 39-40, 69, 78, 80, 81 exchange rates and, 39, 41 fringe benefits, 39 imbedded, 69 importance of, 5, 38, 69, 78, 81, 90 indirect, 26, 27, 78 offshore production and, 1-2, 9, 15-16, 21, 22, 80 reduction strategies, 15, 69-70 wage-rate differences across countries, 24, 26, 39, 41 working hour efficiency, 39 Lean production, 4, 5, 63-64, 68, 69, 70-71, 74 n.3, 82, 88, 91, 93 Less developed countries as component source, 72, 73 automobile production in, 65, 71 Load costs, 26-27, 36, 78 Low-margin products, 96-97 M Make to order, 3, 33, 63, 80, 93

OCR for page 105
Malaysia salary of key positions, 27 semiconductor assembly, 54, 97 Management, and cost competitiveness, 70 Manufacturing continuous improvement, 16 cost assessment, 68-69 as an integrated process and, 2, 16, 17 labor-intensity trends, 92 lean production, 4, 5, 63-64, 68, 69, 70-71 performance standards, 6 Margins, 13, 15, 96 Market access importance of, 5, 79 local content/local presence considerations, 42-43, 80 offshore manufacturing and, 2, 3-4, 18 in U.S., 3, 18, 21, 37, 41 and technology access, 57, 89 Mass production, 62-63, 69, 71, 92 Massachusetts Institute of Technology, International Motor Vehicle Program, 69 Materials access to, 2, 9, 29, 80, 82 costs, 5, 22, 28-30, 34, 37-38, 78, 82, 90 waste, 4, 41 Matsushita, 48 Mexico, 24 automobile production, 65, 71, 72, 73 salary of key positions, 27 Mitsubishi, 48 Models/modeling semiconductor production processes, 50 strategic business decisions model, 2, 11-17 Motorola, 47, 48, 49, 53, 58 nn.7 & 8 Myths of offshore manufacturing automation, 81-82 communications barriers, 85-86 costs, 82-83 emigration, 81-82 foreign OEM suppliers vs. internal capacity building, 83-84 repatriation of production, 84-85 N NEC, 48, 49, 58 n.8 New United Motor Manufacturing, Inc., 70 Nippon Sanso, 58 n.8 Nissan, 72 O Offshore manufacturing advantages, 23-24, 34, 82, 85 of automobiles, 64-68 communications barriers, 85-86 of components, 72-73 determinants of, 11 duties on, 23, 31-32 exchange rate differentials and, 22 hidden cost disadvantages, 6, 83 labor costs, 1-2, 3, 9, 15, 22, 23, 78 low-technology products, 25, 34 make-to-order capabilities, 33 and market access, 2, 3, 79 materials costs and, 3, 9, 22, 23, 34 OEM suppliers vs. building internal capacity, 83-84 quality management costs, 32-33, 35 risk factors, 33-34, 79, 97 taxes and, 23 and technology access, 9, 78-79, 80 time-to-market impact, 34, 35 transient competitive pressures and, 84-85 transportation costs, 23, 31-32

OCR for page 105
turnaround time on parts and supplies, 33 U.S. competition with, 21 by U.S. manufacturers, 9-10 work force skills and, 9, 78-79, 80 Onshore manufacturing cost reduction programs, 35-36 and infrastructure, 97 Opel, 64 Original equipment manufacturers inventory carrying costs, 33 load rates, 27, 30 materials cost advantages, 28-30 quality management costs, 32-33 risk factors in doing business with, 33-34, 83-84 strategic information transfer to, 33-34 telephone manufacturing, 23 transportation and duty costs, 31-32 See also Suppliers P Peugeot, 73 Process control and management advances in, 16 importance of, 2, 3, 38, 49-53, 81-82 improvement, 3, 27 R&D expenditures, 43 n.2 Processes, access to, 2, 13-14 Product quality, 2, 13, 22 prices, 13-14 Production costs definition of, 15 Q Quality acceptable failure rates, 32 and cost competitiveness, 2, 13, 22, 42 demands of consumers, 2-3, 63, 93 management, 16, 32-33, 43, 53, 81-82 R Recommendations to government, 6-7, 99-100 to industry, 5-6, 98 Renault, 73 Report purpose, 10-11 structure, 17-19 Rover, 73 S Scotland, semiconductor facilities, 54-56 SEMATECH, 49 Semiconductor manufacturing analog devices, 45 application-specific integrated circuits, 45, 47, 51, 52 background, 46-48 capital management, 57 capital requirements, 49, 50, 55, 56 chip geometries, 49, 50-51 competitive factor in, 3 corporate alliances, 49 custom device fabrication, 53 determinants of costs, 45 dynamic random access memories, 45, 46-48, 49, 50, 51-52, 58 nn. 7 & 8, 94, 100 n.9 equipment availability, 55 equipment investment requirements, 45, 46, 50, 53 exchange rate differentials and, 49, 56 fabrication facilities, 3-4, 49, 54-55, 56, 80 government grants, 55-56 industry structure, 48-49

OCR for page 105
infrastructure, 55, 92 joint ventures, 47, 57 labor costs, 53-54, 82, 92 location decisions, 3-4, 18, 54-56 logic devices, 47, 52 market access, 3-4, 18, 45, 46, 49, 55, 56-57, 80 market segments, 46-47 materials costs, 53 memory devices, 46-47, 52 merchant producers, 48 microcontrollers, 45, 47, 58 n.6 microprocessors, 45, 47, 49, 51, 52, 53, 54-55, 58 n.5 multichip modules, 54 packaging, 18, 45-46, 53-54, 81 process control, 45, 47, 49-53 product cost determinants, 50-51 quality management, 53 R&D, 45, 46, 50, 57 skills access, 4, 45, 54, 55, 57, 92 static random access memories, 47, 51 technology access, 57 testing, 46, 52, 53, 54 trade barriers, 46, 57 U.S.-Japan trade agreement, 49 U.S. market share, 9, 14, 46, 100 n.9 world production, by region, 10, 46, 47 Semiconductor Research Corporation, 50 Siemens, 49 Singapore offshore manufacturing in Batam Island, 89 telephone production in, 21, 23, 24, 31 Site location attributes, 17, 77-80 costs and, 77, 78 determinants of, 19, 41-43, 54-56, 71 manufacturing as an integrated process and, 2 market access and, 77-78, 79 quality demands of consumers and, 2-3 skills access, 78-79 strategic business decisions model, 2, 11-17 technology access and, 77, 78-79 Small manufacturers, 18 Sony, 48 South America, automobile production, 73 Spain, 72 Suppliers base, 18, 48 customer relations with, 2, 18, 29, 48-49, 57, 83, 84 electronics, 33 national/cultural links with, 29 outside, 13 strategic information transfer to, 33-34 turnaround time on parts and supplies, 33, 79 yield improvement, 43 see also Original equipment manufacturers Supply enhancements, 14 T Taiwan, 23, 24 Taxes, 23 Technology access to, 2, 5, 9, 13-14, 41, 57, 78-79, 89 flows, 7, 98-99 investments in, 81-82 level of product and offshore production, 25, 27, 28, 32, 34, 42 shifts, 56 Telecommunications, deregulation, 22, 42 Telephones, see AT&T telephone manufacturing Texas Instruments, 48, 49, 58 nn.6 & 8 Thailand, 24, 37, 80

OCR for page 105
Time to market, 2, 34, 43, 81, 96 Toshiba color picture tube manufacturing automated production, 40 background, 36-37 capital budgeting, 40-41 exchange rate differentials and, 39, 41, 42, 43, 83, 89 factory overhead, 37 labor costs, 37, 38-40, 41 market access, 21, 37, 41, 42, 43, 90 materials costs, 37-38, 41 nineteen-inch CPT, 38 quality management, 36 twenty-inch, 39 in U.S., 3, 22, 38-41, 43, 83 worker skills, 41 Toshiba Display Devices, 36-39, 48, 49, 58 n.8, 84 Toyota, 63-64, 70, 86 Trade policies cost effects, 83 Generalized System of Preferences status, 23, 31 and foreign ventures in U.S., 41, 42-43, 56, 73 local content requirements, 46, 71, 80 market access and, 79 negative effects of, 90 protectionist, 5, 41, 56, 69, 90, 95 recommendations, 6 unfair practices, 57, 94 U.S.-Japan semiconductor trade agreement, 49, 58 n.1 Voluntary Restraint Agreement, 68 Transportation costs, 23, 31-32, 78 U U.S. competitiveness in automobile industry, 64, 70 determinants, 2, 6, 95, 98 foreign direct investment and, 91, 95, 98-99 future of, 9, 94-97 interfirm cooperation, 91, 95 labor costs and, 10, 81 macroeconomic conditions and, 6-7, 98 market access and, 3, 90, 91, 98 market-share losses, 9, 14 quality of market and, 91 responsibility for losses in, 5-6, 98 in semiconductor industry, 47 trade policies and, 91, 95, 98 in value-added industries, 94, 95, 98 worker skills and, 10, 93, 95, 97, 98 United States advantages of manufacturing in, 3, 4, 5, 6, 19, 38-39, 42, 64, 86, 95, 98 capital budgeting in, 40 desired state of industrial base, 94-97 effective industrial base, 86-90, 97 exchange rate differentials, 22 foreign direct investment in, 7, 10, 11, 49, 61, 65, 68, 73 industrial infrastructure, adequacy of, 5, 91, 94 joint ventures, 7 labor costs in, 22, 38-39, 87 materials costs in, 3, 38-39 productivity rates, 39-40 semiconductor industry, 46, 47, 48, 50, 56, 57, 58 n.5 trade policies, 5, 56 wage levels and standard of living, 87 V Value-added, 6, 14, 79, 87-88, 92-94, 95, 97, 98 Volkswagen, 73 Volvo, 73

OCR for page 105
W Wage rates, 2; see also Labor costs Westinghouse Corp., 36, 37 Work in process, minimization, 4 Worker empowerment, 4 Worker skills access to, 2, 4, 9, 13-14, 23, 54, 78-79, 80, 92 education and, 7, 99 and effective U.S. industrial base, 93, 95, 96 foreign engineers and managers, 27 learning curve effect, 38, 41 mass production and, 63 mobility, 7, 64 and turnover rates, 39-40, 41