Happy New Year! Welcome to the inaugural edition of Manufacturing ETC’s newsletter. We have designed this monthly publication as a way of continuing our commitment to educate manufacturers on various methods of improving quality, efficiency and profitability. Each edition will provide you usable information, along with information about up-coming workshops and seminars you can attend to apply these principles to your own operation.

Going forward, if you have a topic you would like to see us cover, or a situation you deal with in your operation that you’d like us to address, please feel free to call or e-mail us with that information. Here’s to a happy, healthy and prosperous New Year for us all!

Sal Ganino
Manufacturing ETC

Many years ago, when I first got into manufacturing, I worked for a very large, international metals company. My first few years as an Industrial Engineer I spent doing time studies and product standard cost. I would determine how long it should take to make the product, then calculate the standard cost using the algorithms of the time; the number of pieces in the order increased by ten percent, the scrap allowance times the units cost (based on my time study). Next we added the set up cost, which included and allowance for set up scrap (usually ten to twenty pieces).

Once I had finished with my cost development work, the Cost Accountants would add an allowance for packing and internal handling, and then an allowance to cover any other indirect costs, and finally an allowance for general, sales and administrative expenses. The sales people would in turn add the profit they wanted to make on this product and, voila! We had our selling price. Click here to read the complete article.

In each year from 1976 to 1982, Atari, the industry leader in computer video games, virtually doubled its revenue. Revenues galloped from $35 million dollars to nearly $2 billion dollars in those short six years. But then came 1982 through 1984, that period when the company’s fortunes reversed themselves. In just one year Atari’s operating income fell from a positive $300 millions to a very sickly minus $600 million. They were not the only company to experience this meteoric or comet like entrance and departure, VisiCalc and WordStar, are virtually unknown to the current generation of computer users.

In 1985, when Apple introduced the Macintosh, Microsoft recognized it as a real treat to its future. Bill Gages counted this by introducing Windows 1.0, and almost immediately inducing Windows 2.0, a move that on its face value would have seemed foolish. The processing power of Intel’s 8088 and 80286 simply was insufficient to run these operating systems. But the folk at Microsoft understood Gordon Moore’s Law of Microprocessors, the law that stated memory and processing power would double every year. Click here to read the complete article.