Mass production

:For the American band of the 1970s and 1980s, see Mass Production (band).

Vertical integration

A final very important strategy is vertical integration. In this strategy, the manufacturer produces all or most of the parts and subassemblies that go into the product. For example, at one point, Ford Motor Company literally mined iron ore in Minnesota and turned it into cars in Detroit, capturing all the profits from all the processes that added value to iron ore.

Related Topics:
Vertical integration - Ford Motor Company - Minnesota - Detroit

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Nowadays, rather than assembling everything, factory managers choose which assemblies to produce based on the return on investment (ROI) that each assembly process can produce. The basic plan is to out-source unprofitable subassemblies to other organizations. Often, such organizations can afford specialized equipment or organization that makes them substantially more efficient than an ordinary factory at a particular task.

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