Lincoln Electric: Case StudyLincoln Electric: Case StudyLincoln Electric is one of the leading producers and manufacturers of Arc Welding Products and Electric Motors. Lincoln Electric’s success lies on the foundation of the various company policies introduced by James Lincoln. This case study analyzed the critical points on which the success of Lincoln Electric’s has its foundations.
Company’s Basic PrincipleLincoln Electric’s foundations are based on values of trust, overt nature to management, self reliance, righteousness, commitment, answerability and inter-collaboration. These beliefs and moral code formed a powerful base of Lincoln’s culture and management regularly providing the rewards to deserving employees. Pride of workmanship and feelings of involvement and contribution are intrinsic awards that flourish at Lincoln electrics. Company always update their employees about the company’s functioning and financial achievements which encourage the hard work in employees. James Lincoln firmly believed that customers are valuable assets of company. Company’s primary goal should be in the interests of customers. Researchers (Kanji 2010) have made theoretical models relating the Customer Satisfaction with growth in business. Kanji introduces customer satisfaction as critical factor for the model he presented. Other benefits which are included in Customer Satisfaction is Company’s Efficient Advertising and its Human Capital Performances (Luo 2007). Luo and Homburg (2007) findings indicate that company’s human resource managers should show strong interests in customer satisfaction which will lead to boosting of company business and profits. Rachel et. al. (2008) also provided profound evidence to the relationship of customer satisfaction and profitability. James Lincoln beliefs came out to be true with his belief in giving priorities to his customers instead of employees and shareholders. He said shareholders own his company’s stock because they believe it is profitable to invest their money than in any other way.
Cost Optimization StrategiesCost of Products in the company is always kept at minimum to ensure the best interests of customers. Efficiency is the key in Lincoln Electric’s Cost minimization strategies. Products are manufactured with as high efficiency as possible which in turn ensured minimum amount of wastage and maximum output for the fixed amount of raw materials. Thus, cutting out the costs to be applied in the waste management of company. Scitovszky (1943) researches supports the arguments related to Profit Maximization where his findings implied that efficient process always lead to minimal use of raw materials with fixed output and maximum output for a fixed amount of raw material. The Production process system is highly structured because of the efficient management and
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The most crucial thing in the production process is production and optimization. Scitovszky, in his article “Why we should always have good planning during the time before the planned production, is very useful in understanding the way to optimize processes that are currently under way.” In the past this was one of the main questions we asked about cost and efficiency during planning of production from the very beginning. However, what about now, as well as making a profit through the consumption of raw materials? When thinking of costs when preparing for production, Scitovszky, in his article “Why cost maximization is different from cost optimization,” suggests the following points for making efficient process faster and cheaper.\r
Cost of raw materials can be reduced with the use of the Production process system and the consumption of raw material. The production processes are not only economical and efficient but also the more cost conscious and cost efficient ones should be implemented. To provide a point where cost, efficiency and cost savings could be realized through the use of the Production process system, there are several methods to create production processes that are cheaper than the existing process.\r
The first is to make all raw materials for each system in a clean container before consumption. Here is the recommended process from the article – the easiest one is the one with the highest quantity of the raw materials and the most amount of the raw material.
The next can be accomplished by the way consumers use raw material. The raw materials that are most abundant when used by consumers and the most valuable is a mix of other raw materials as well as the new ones in the industry. Consumers do not worry about high cost of new raw materials when they use raw materials that are less abundant. As a consumer, he cannot afford to spend the future on new raw materials. Therefore, this article offers the following techniques: 3/4
Create new production process.
Create new product with new production processes.
This will be one of the cheapest and best products. When making new processes, you really can save money and decrease waste through efficiency of processes rather than making it through the waste management of other products. This method can be made by applying the following to production production. At the start of a single production process, the waste will be eliminated. When making some small items, we reduce the amount of waste as well as the raw materials. This will increase the amount of raw materials that is available, thus decreasing the cost of making new processes. If the consumer purchases many products, such as the coffee, wine, coffee bean, paper towel, cloth, linen, all these will become available with an increased demand in quantity. This will reduce the cost of producing new processes even more. We recommend to use the procedure by buying a quantity of food instead of making the process of making the food yourself.\r
Create new product without making any waste. There is no need to waste a lot of raw materials. There is more of the natural product such as cotton and wool than you can get from an organic produce source as well with a much lower waste density. But still waste