Flexible Manufacturing

Topic: “In a news article titled, Shifting Gear: Chrysler Gains Edge by Giving New Flexibility to Its Factories (WSJ, 04/11/2006) presented the benefits and case for flexible manufacturing. Comment on the advantages and disadvantage of flexible manufacturing? Comment on the scope economies presented in the news article? What does the existence of such economies imply about the production of autos in growing fragmented market? “ In the news article, “Chrysler Gains Edge by Giving New Flexibility to Its Factories”, more emphasis is placed on how Detroit’s Big 3 and especially Chrysler is catching up with its Japanese rivals by adapting flexible manufacturing and saving up a chunk of the fixed costs involved in car manufacture. One important point stated in the article is that mega-selling cars are now rare and that it is important to serve the buyer’s appetite by offering a wide array of models of cars to have a competitive advantage in the market. The possibility of producing a variety of vehicles in the same plant is one short way to describe a plant’s flexibility or flexible manufacturing. One advantage of flexible manufacturing systems is almost certainly the variety of products that it can produce and the benefits it offers to the customers apart from attracting them towards the brand. The use of robots sometimes in flexible manufacturing and as even mentioned in the article cuts down production time drastically because of the speed the materials are loaded, unloaded and transferred from one to another. Another advantage would probably be the low fixed costs as compared to operating several different plants for each model the company manufactures. It is certainly more efficient to have one single plant that makes multiple models of cars and runs at close to full capacity rather than having different plants to manufacture each model that run less than capacity. The operating, maintaining, labor and fixed costs significantly decrease when these plants