Hello. This is Nada from Seito Medical School. Production management is the management science of the manufacturing industry.
Manufacturing business (manufacturing) follows the flow of "product development," "production," and "sales." "Product development" involves discussions about how to make products, such as product planning, design, and prototyping. "Production" is the stage in which ideas compiled through product development are produced into products. Everything that includes "sales" is collectively called "manufacturing."
A company's competitiveness can be said to be the source of being chosen by customers in the market and continuing to generate profits. One of the competitive strengths of a company is price. When it comes to pricing, the most important thing is to be in the black, that is, to make a profit, and no matter what kind of product you sell, it is important to set prices so that you can make a profit.
In business administration, there is a concept called 4Ps. One of them is the price that we just talked about. Furthermore, there are products, distribution and sales (place), and sales promotion (promotion). These four acronyms are called the 4Ps or marketing mix. Is it something like advertising good products at low prices and using a sophisticated sales network to inform customers? QCD supports the 4Ps that form the basis of competitiveness from below. The 4Ps or marketing mix are standards that are visible to customers, but QCD is a standard that is not directly visible to customers.
QCD is an acronym for three keywords: quality, cost, and delivery, and is value that is not directly visible to consumers. In other words, we produce high-quality products that meet your needs at low manufacturing costs and on time.
In addition to this, what I learned this time was also the discussion of the combination type and the assembly type. The mating type is a method of assembling multiple parts in complex combinations, similar to traditional automobiles. Since each part of the mating type is a dedicated part, it is not realistic to replace it with parts from other manufacturers.
On the other hand, assembled type products can be interchanged even if they are made by different manufacturers, such as in computers and electric cars, where parts are standardized within the industry. However, desktop computers, so-called fixed computers that cannot be carried around, are assembled-type computers, but one product, such as a notebook computer, that is made using parts that are difficult to replace is a assembled-type computer.
As we have seen so far, management theory is based on what seems obvious at first glance. For example, the 4Ps can be said to be the competitiveness of a product, such as price, product, sales channel, and advertising. Here, I can evaluate the 4Ps as competitiveness related to products, and tactical competitiveness such as product price, product itself, product sales channels, and product advertising.
On the other hand, I think QCD can be viewed not only from the competitiveness of the product but also from the perspective of the company. A company's quality control, a company's manufacturing costs, delivery times as a corporate structure, etc. For example, in Japan, where I live, the value system was to provide high-quality products at low prices, and we provided cheap and high-quality products.
Now, I would like to talk about Toyota Motor Corporation. Toyota Motor Corporation is a well-known company representing Japan. According to my memory, I may be wrong, but I think annual car sales were about 10 million units. This level of sales makes us one of the top companies in the world.
Toyota Motor Corporation is now under pressure to manufacture non-gasoline vehicles such as electric cars and hydrogen cars. One of the points is regarding the global environment. There were famous conferences on reducing CO2 emissions in Kyoto and Paris, and people were criticizing gasoline-powered cars for increasing their CO2 emissions. Therefore, not only Toyota but other car companies around the world began manufacturing electric cars that do not emit gas in order to overcome the regulations imposed by the Kyoto and Paris conferences. In Japan, we were good at developing complex, assembled cars, but in America and other countries, assembly-type products that combine unified parts, such as electric cars, are gaining an advantage.
Toyota's 4Ps and QCD have been at the top level in the world and have been doing business up until now, but the competitive environment will change completely with just one environmental regulation. We have produced a large number of hybrid-type automobiles and must have accumulated many various patents and know-how, but the 4Ps and QCD can easily be destroyed simply because they are bad for the environment.
However, in the case of Toyota, it has been manufacturing complex products that are assembled together, so it shouldn't be difficult to manufacture an electric car that just requires assembling simple parts. Rather, changes in the era using artificial intelligence software, such as self-driving cars, have the potential to be more difficult.
Now, I would like to introduce mathematical formulas to business administration.
I think the 4P's are "price", "product", "market", and "sales promotion". However, when the price of a certain product goes up, if the price goes up to make the product better, then there is a positive correlation: if the price goes up, the product goes up. On the other hand, when the price goes up, if manufacturing costs remain constant, sales channels and sales promotions may increase, but since manufacturing costs have increased, if the price increases, the budget for sales channels and sales promotions may decrease. I don't know. This is a negative correlation as sales channels and promotions go down.
For example, if price 1 = product 1, sales channel 1 = sales promotion 1, then
Price/sales promotion = product/sales channel.
Here, if advertising costs are multiplied by 1.2 for sales promotion, since the price is constant, product / sales channel = 1 / 1.2, 1.2x product = 1x sales channel = 1 x 1, and the product will be 0.833 times more expensive. In other words, it will be 20% worse, or 1.2x product = 1.2 x 1 = 1x sales channel, and the balance will be achieved by improving sales channel by 20%. I would like to think about what this means in the future. However, this formula may be wrong from the very beginning, so don't worry.
Furthermore, it may be interesting to turn QCD into a mathematical formula and consider its relationship with the 4Ps. If you have time, you might want to give it some thought. Great discovery! ! There may be... See you soon.
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