Graphics Reference
In-Depth Information
economics are similarly ruthless. New design concepts are subject to forced
trade-offs between product quality and cost to manufacture.
A factory and an assembly line are an ideal way to cheaply make identical prod-
ucts in high volumes. However, such eficiency is not cheap. Behind even a simple
plastic mass-produced product lies an invisible cast of thousands. Companies
must invest in skilled technicians and engineers to properly transform a design
into reality, to calibrate factory machines and oversee assembly lines.
At the heart of the dilemma of good, fast, or cheap lies a basic rule of eco-
nomics called economies of scale. Economies of scale are the invisible foun-
dation that supports our modern industrial economy. Economies of scale are
what make mass-produced products proitable.
Economies of scale drive down the consumer price of mass-produced prod-
ucts and increase proits for a company. However, to earn back the upfront
investments in design and production, companies must sell large volumes of
the same product. Only after a signiicant number of identical products are
sold does a company begin to proit from its initial investment.
One of the biggest hidden costs of mass production is the sacriice of vari-
ety. To enjoy the beneits of economies of scale, a company must resist the
temptation to change a product's design unless there's a large enough market
opportunity to justify the investment. Each design change, each minor upgrade
or variation hits the bottom line.
This is an injection molding machine in a factory. Injection
molding machines fabricate plastic parts quickly and cheaply
but making the mold requires upfront investment and involves
design challenges.
