Describe the methods used to calculate value added. How does value Essay - 5

Describe the methods used to calculate value added. How does value added contribute towards understanding the connections betwee - Essay Example This paper will describe the methods used by Ford at Highland Park and Toyota during 1980s and 1990s to improve productivity. Methods used by Henry Ford at Highland Park to improve productivity The Ford plant at Highland Park is thought to have been the main automaker that transformed the lives of a majority of American people in the 20th century. It is at the Highland Park that Henry Ford with the assistance of his designers formulated the current principle of bulk assembly; an example being the endlessly moving assembly line, introduced in 1913 thereby reducing the assembling duration of the Model T to 93 minutes down from 728 minutes. It is noted that the companies continued to grow very fast to the extent that the plant was able to produce a vehicle every minute. The high production led to a scenario in which one in every two cars in the streets all over the world was a Model T (Batchelor 1994, P.22-24). The increase in the production of the Model T by Henry Ford was attributed t o two main principles, namely division of labor and specialization on the assembly line, and the company’s investment in capital. ... With regard to investment in capital as a way of improving productivity, Ford Motor Company built one of Michigan’s largest buildings under one roof known as the Highland Park Plant in 1903. The building was spacious and large thereby allowing for effective arrangement of machineries. The building also had massive windows to enhance natural lights and ventilation. It is also reported that the walls of the building were 75% made of glass with skylights also made available. The nature of the building allows for efficiency in the operation of machines and other tasks thereby leading to improved productivity (Batchelor 1994, P.22-24). Ford Motors also used vertical integration strategy to improve the production of Model T. To ensure that this became a reality, Ford acquired a Brazilian rubber plantation, large chunks of timberland and iron-ores in Minnesota and Michigan, coalmines, ships, and railroads. The acquisitions ensured that Ford do not fall short of materials and parts du ring the manufacturing and assembling thereby guaranteeing the continuity of the operation. Since materials and parts were readily available at any time they were needed, this improved the production of cars manufactured by the company (Brooke 2008, p.68-70). To improve productivity, Henry Ford also created a single-purpose tools and machines at different steps in the manufacturing processes. This was done by using electricity to run the machines used for manufacturing his Model T. The use of electricity did improve the efficiency compared to other methods such as the human operations, which had proved less efficient. In addition, Ford Motors ensured that