Index
A
American Motors, 73
AT&T semiconductor production, 48, 49, 58 n.8
AT&T telephone manufacturing
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
make to order, 33
market share, 22
materials costs, 3, 22, 23, 25, 28-30, 35, 43-44 n.3, 89-90
product cost analysis, 24
product reliability, 22
supplier relationships, 83
in U.S., 23
work-force skills, 23
Automation
in automobile production, 15, 66-67, 70
capabilities and applicability, 16
and labor cost reduction, 15, 81
Automobile production
assembly time, 70
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
trade protection, 62, 68, 69, 73
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
costs, 2
equipment investments, 26
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
foreign investment in U.S., 10
labor costs, 15-16, 17-18, 26, 92
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)
labor component, 15, 21, 25, 90
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
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
minimum scale requirements and, 13
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
Greenfield factories, 16
advantages, 90
automobile production, 65
salary of key positions, 27
H
High-technology products
load costs, 26
Hyundai, 65
I
Inventories
just-in-time systems, 16
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
semiconductor industry, 47-48, 49, 50, 52-53, 58 n.6
technology access in, 80
Joint ventures, 7, 47, 57, 70, 98
K
L
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
fringe benefits, 39
imbedded, 69
importance of, 5, 38, 69, 78, 81, 90
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
automobile production in, 65, 71
M
Malaysia
salary of key positions, 27
semiconductor assembly, 54, 97
Management, and cost competitiveness, 70
Manufacturing
continuous improvement, 16
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
Market access importance of, 5, 79
local content/local presence considerations, 42-43, 80
offshore manufacturing and, 2, 3-4, 18
Mass production, 62-63, 69, 71, 92
Massachusetts Institute of Technology, International Motor Vehicle Program, 69
Materials
costs, 5, 22, 28-30, 34, 37-38, 78, 82, 90
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
communications barriers, 85-86
foreign OEM suppliers vs. internal capacity building, 83-84
repatriation of production, 84-85
N
New United Motor Manufacturing, Inc., 70
Nippon Sanso, 58 n.8
Nissan, 72
O
Offshore manufacturing
communications barriers, 85-86
determinants of, 11
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
materials costs and, 3, 9, 22, 23, 34
OEM suppliers vs. building internal capacity, 83-84
quality management costs, 32-33, 35
taxes and, 23
and technology access, 9, 78-79, 80
turnaround time on parts and supplies, 33
U.S. competition with, 21
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
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
R&D expenditures, 43 n.2
Processes, access to, 2, 13-14
Product
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
Renault, 73
Report
Rover, 73
S
Scotland, semiconductor facilities, 54-56
SEMATECH, 49
Semiconductor manufacturing
analog devices, 45
application-specific integrated circuits, 45, 47, 51, 52
capital management, 57
capital requirements, 49, 50, 55, 56
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
location decisions, 3-4, 18, 54-56
market access, 3-4, 18, 45, 46, 49, 55, 56-57, 80
materials costs, 53
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
skills access, 4, 45, 54, 55, 57, 92
static random access memories, 47, 51
technology access, 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
determinants of, 19, 41-43, 54-56, 71
manufacturing as an integrated process and, 2
quality demands of consumers and, 2-3
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
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
Taxes, 23
Technology access to, 2, 5, 9, 13-14, 41, 57, 78-79, 89
level of product and offshore production, 25, 27, 28, 32, 34, 42
shifts, 56
Telecommunications, deregulation, 22, 42
Telephones, see AT&T telephone manufacturing
Time to market, 2, 34, 43, 81, 96
Toshiba color picture tube manufacturing
automated production, 40
exchange rate differentials and, 39, 41, 42, 43, 83, 89
factory overhead, 37
market access, 21, 37, 41, 42, 43, 90
nineteen-inch CPT, 38
quality management, 36
twenty-inch, 39
worker skills, 41
Toshiba Display Devices, 36-39, 48, 49, 58 n.8, 84
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
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
foreign direct investment and, 91, 95, 98-99
macroeconomic conditions and, 6-7, 98
market access and, 3, 90, 91, 98
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
semiconductor industry, 46, 47, 48, 50, 56, 57, 58 n.5
wage levels and standard of living, 87
V
Value-added, 6, 14, 79, 87-88, 92-94, 95, 97, 98
Volkswagen, 73
Volvo, 73
