IS THE CENTRE OF WORLD’S ECONOMY MOVING TO ASIA?

Monday, June 1, 2009 in Washington DC, US Government approves bankruptcy for General Motors Corp. (GM). General Motor is the humbled auto giant that has been part of American life for more than 100 years. Magna International Inc., a company from Germany, has been deal with GM for buying Opel. Germany’s company also dealt to give fund stimulus to Opel.

Before 2008, GM is noted as the first rank global car market shares and Toyota is in the runner up. New phenomenon happens in 2008; GM lost its position as the best global car market shares.  Because of bankruptcy, GM’s market share will be fought over others car manufacturer. In this case, Toyota as the global leader car manufacturer and Ford as the second US car manufacturer have the biggest chance to get it. These data are supported by BBC for 2008 Global Car Sales below.

  • Toyota: 8.97m
  • GM: 8.35m
  • VW: 6.3m
  • Ford: 5.5m
  • Nissan: 3.2m
  • Renault: 2.4m
  • Fiat: 2.15m
  • Chrysler: 1.5m

For illustrated the US market share by Manufacturer, GM is always in the first rank, Toyota in the second rank, and Ford in the third rank. In May 2007 the market share of GM is 23.8%, Toyota with 17.2%, and Ford with 16.5%. But, in May 2008, the market share of GM and Toyota is slightly different. GM’s market share is 19.3%; Toyota with 18.4% keeps away from Ford with 15.4%. In the middle level, Honda can win against Chrysler. If in May 2007 Chrysler with 12.8% is in above Honda with 9.3%, in May 2008 Honda with 12% successes grabbing Chrysler position in the forth rank. More complete, the table is showed below.

U.S. Market Share by Manufacturer

Car Manufacturer

May 2007

May 2008

GM

23.8%

19.3%

Toyota

17.2%

18.4%

Ford

16.5%

15.4%

Chrysler

12.8%

10.7%

Honda

9.3%

12.0%

Nissan

6.0%

7.2%

Hyundai

4.6%

5.6%

BMW (includes Mini)

2.0%

2.3%

Volkswagen (includes Audi)

2.0%

2.2%

Mercedes (includes Smart)

1.4%

1.8%

Source: US News 2008

This phenomenon does not only happen in car market, but also in the world’s economic growth. Data from IMF show that the economic growth of Asia and Africa countries rises significantly from 2007, 2008, and also the projection in 2009 and 2010. Most of Asia and Africa countries’ economic growth is always positive. On the other hand; most of America and European counties are sloping down, even will be projected minus in 2009 and 2010.

IMF PROJECTION

IMF Projection 2009Source: IMF, World Economic Outlook, 2009

Europe became the central power of world’s economy in 18th and 19th century. It is signed with Industrial Revolution in England and some development in Germany and France. In 20th century the central power moves from Europe to America, specially the United States. In 21st century, global economic crisis with the epicentre in the US makes the economics of that country and European country unstable. Moreover, Asia and Africa in the fact are able to exist in global economic crisis. But, Asia has more benefit than Africa because many countries in Asia are developed like Japan, Singapore, and Taiwan. Then, the developing countries in Asia like China, India, Indonesia, and Middle East countries are going to growth. Will the centre of world’s economy moving to Asia?

Advertisements

WORLD NEEDS AUTOMOTIVE RECYCLING COMPANY

For support “World Environment Day June 5, 2009”

Have you imagine that one day in the future, land vehicles could not use on the road? Yes, it is possible and will be happened because all car companies in the world produce a number of cars every day whereas old cars which ages 30 years are still able to operate on the road. This issue will become a problem for government, producer, and also customer in every country in the future. On the other side, it can be a potential opportunity for automotive manufacturing company to invest an automotive recycling factory.

Moreover, end of life vehicles and unused vehicles occupy usually vast expanse of landfill. This condition will happen to degradation of environment because it is inclusive of hazardous waste (dangerous and poisonous). Actually, this waste is a potential energy if it could be reduce, reuse, recycle, and recovery (4R). Currently, 4R are implemented by unauthorized company or individual. But, it cannot 100% part of vehicle can be reduced, reuse, recycled, and recovered.

Investment in this business is not easy to implement because it processes waste that the world concern about. It needs carefully research about the impact of environment and also study of law or regulation. Moreover, it needs big investment but the revenue of this business will be also high. Today, the annual sales of an average ELV dismantler in Shanghai are about $2,784,503 and annual revenue is about $496,368. Assuming that the average level of operation and management of ELV dismantlers nationwide is similar to that of the dismantler in Shanghai, it is estimated that the annual sales of the national ELV dismantling industry are about $850-960 million and annual revenue about $169 million (Chen, 2005).

Where is the best place to build automotive recycling factory?

Huge land countries like China, United States, Canada, and Indonesia are contributed in vehicles consumption. For example, automotive factory in Indonesia could sell cars approximately 600,000 units in 2008. An opportunity to build automotive recycling factory in huge land country is very good. Beside the land is still available, natural resources and human resources are also easier to acquire.

If hand phone and gadget like Nokia can be recycled 100%, how about cars?

Car consists of many parts and materials. The breakdown materials by weight diagram below shows that metal are a dominant material (68% ferrous metal and 8% non-ferrous metal).

Car composition

Source: ACORD, Annual Report, 2001

Metal (76%)

Metal dominates around 76% of a car weight. Currently, 98% of metal in a car are recovered by steel industry and re-smelting plants. One of good news is that automotive manufacturing companies historically redesign car with reducing the weight of metals in a car. This reducing can support eco labelling product and environmental friendly product because it can reduce the total weight of car. Hence, the consumption of fuel is also reduced.

Plastic and Polymers (10%)

Plastic and polymers contribute roughly 10% of a car weight. Car manufactures use plastics increasingly from 1980s until today. In addition, utilizing plastics in a car for changing metal is more environmental friendly. Besides low cost, using plastics can decrease weight that has impact in decreasing the consumption of fuel. Automotive usually use polypropylene (PP), polyethylene (PE), polyurethane (PU) and polyvinylchloride (PVC). PP is common use in bumpers, dashboards, engine component, interior trim moulding, and wheel arch liners. Then, PE and PU are common use in seat foam and seat belt.  The rest of plastics parts are PVC.

PP, PE, and PU categorize plastics which are easily recycled. Plastic waste is chopped into flakes or pellets, and then it becomes the raw material of plastics.  It can be melted into new product of plastics. In contrast, PVC is difficult to recycle. Alternative disposal method of PVC is incineration, but it related with environmental concerns. The emission during incineration is dioxin and phthalate plasticisers which are thought to be disruptions of hormone system. Currently, car manufactures are doing research to change PVC.

Tyre, Rubber, and Carpet (6%)

Tyre, rubber, and carpet obtain approximately 6% of a car weight. Number of options for reuse, recycling, and recovery are following.

  • Scrapped and vulcanized to reuse treys in good condition.

  • Tyre can be shredded and the rubber granulated for use in other products, sports surfaces, paints, flooring, etc.

  • Tyre can be recycled by cryogenic fragmentation. First, tyres are shredded and cooled to below -80°C. Then, The resultant rubber granules can be used for athletics tracks, carpet underlay, playground surfaces and rubberised asphalt for road surfaces.

  • Tyres are broken by microwave prototype into their original component. The steel is recoverable. The carbon and oil also can be reused.

  • Pyrolysis is heating tyres without air; then the gas, oil and carbon can be reprocessed. In big capacity, this process also produces energy that can provide electricity.

  • Tyre are incinerated to extract energy.

  • Tyre can be used as a fuel in the manufacture of cement. 25% of the coal, replaced up from tyre, can be used in cement kilns and reduce nitrogen oxide emission.

Glass (3%)

Glass possesses approximately 3% of vehicles weight. Two types of glass are common use in the automotive industry; toughened glass and laminated glass. Toughened glass is easy to remove from vehicles. Laminated glass need to be removed manually. It is crushed into cullet (small pieces) and melted, then moulded to make new product like bottle and jar. Majority, the most of glass waste are sent to landfill because the value of glass is relatively low to recover. Most of industries are not interesting in glass recycled because it is profitless.

Fluids (2%)

The problem of fluids like engine oil is not only for end of life vehicles but also for vehicles during service or maintenance. Wrong treatment to dispose fluids can pollute clean water. Three options of oil disposal are reuse, recovery, and recycle. First, oil can recover as mucky lubricant for simple use. Second, oil can be used as a fuel burnt in heavy industry and power stations. Third, oil can refine as clean/base lubricant for the raw material of lubricating oil. The first treatment is boiling oil to remove water and remove metal particles.

Battery (1%)

Currently, the recycling rate for car batteries is estimated to exceed 90%. If the electrical component like lead anode and cathode pole and the plastic case do not broken, battery can be used again with refilling acid and distilled water. Battery consists of 4 materials that can be recycled. First, plastic battery cases can be recycled to be raw material. Second, lead cathode and anode can be melted down to be raw material of lead. Third, acid can be treated and neutralized. Forth, distilled water can be purified and used again.

Electrical Parts (1%)

Electrical Parts relatively complicate to be recycled because it contains of many different type of parts. Two options can be chose to recycle electrical parts. First, the electrical component disposal can be sold back to the electrical part supplier to be repaired, reused or recycled. Second, electrical parts actually are assembled from raw material like plastics, metal, glass, rubber, and so on. Hence, it is recycled with breaking down the component and recycles separately based on the material.

Other Components (1%)

A car is supported by approximately 1% additional groups of components. It consists of leather, foam, cloth, and so on. Because of this component in a small portion of car, it can be more profitable if company sells back to the supplier to be reused or recycled.

Conclusion

Theoretically, almost 100% of end of life car can be recycled. Despite of investment to open new plant for vehicle recycle needs a lot of money, it is a potential business. Many benefits will be taken by companies if they invest in this business sector.

  • Opening vehicle recycling company needs many resources. Besides of land, investment, and material; man power resource is also needed. It means opening new vocations and decreasing unemployment.

  • Investing in vehicle recycling company can help environment healthier and supports environmental friendly movement. Opening vehicle recycling company means processing waste into new product or raw material. Hence, it can decrease pollution. If this company is opened by automotive company, it will be additional benefit; because customers will be more trust and loyal.

  • Special for automotive company, this company will give additional profit because it will be a supply cycle. Thus, the supply of raw material will come from both supplier and vehicle recycling company.

Vehicle Production Cycle

On the other hand, this business also has many difficulties. Opening vehicle recycling company is not easy. Many factors should be considered in this project like law and environment (pollution of air, water, and soil). To open this company needs deeply law studies because it related with processing waste. As people know, sometimes waste is very dangerous because it can be polluted environment. Moreover, to open a company needs big investment.

Recycling-Plant

LINEAR PROGRAMMING AND SENSITIVITY ANALYSIS FOR SHOPPING

First Published: Thursday, May 7, 2009

One problem when people usually meet in shopping is what people should buy in “clearance sale” with aim to sale again. Usually people confuse to buy between/among two types of products or more. The objective of this problem usually is maximising profit, but this problem will be more difficult because people should decide among different constraints such as sales demand, budget, and capacity. How do we solve this problem?

Solving of this problem will become simple with Linear Programming (LP). LP is a mathematical technique for optimization of linear objective function. In 1939, Leonid Kantorovich, a Russian mathematician, founds this technique. Then, George B. Datzig, John von Neumann, Leonid Khaciyan, and Narendra Karmarkar develop this technique. Clearance sale shirt and t-shirt example below will show that LP can be used to solve this problem.

For example, a department store opens New Year clearance sale for shirt and t-shirt. One shirt prices $25 and $15 for a t-shirt. A shop looks this opportunity to make a $400. In addition, his inventory only can keep 100 clothes, whereas he has kept 53 shirts and 29 t-shirts. Then, he considers that he can sell shirt at least twice than t-shirt in one week. How much shirt and t-shirt should he buy in this clearance sale?

Consider that X1 is for shirt and X2 is for t-shirt. The objective of this problem is maximising profit from (40-25) X1 + (35-15) X2 = 15 X1 + 20 X2. There are three constraint of this problem. First, sales demand constraint is X1 – 2X2 >= 0. Second, budget constraint is 25X1 +15 X2 <= 400. Third, capacity constraints is X1 + X2 <= (100-53-29) ~ 18. So the mathematical equation is:

Max Profit:         z = 15X1 + 20 X2
Constraint:          X1 – 2X2 >= 0
                                  25X1 +15 X2 <= 400
                                  X1 + X2 <= 18

There are many ways to solve this problem such as LP Graphic and Excel Solver. The graphic and the excel solver output will be showed below.
LP Graph

 

 

 

 

 

 

 

 

 

From graphics, there are three alternatives of optimum solutions. First, in point (18, 0) will make profit $270. Second, in point (13, 5) will make profit $295. Third, in point (12.3, 6.15) will make profit $307.5, but this answer is invisible because shirt and t-shirt cannot be decimal. Hence, the nearest options are (12, 6) with profit $300. Furthermore, He should buy 12 shirts and 6 t-shirts. It is very suitable with the answer from Excel Solver table belSolver Answerow.

The owner of shop also can analyze the changing in the parameters of this LP problem. This analysis is called sensitivity analysis. In this case, Excel Solver is also used to define the sensitivity analysiSensitivity Analysiss.

The table above shows that the final answer will not be change if:

  • The profit of Shirt changes in range from 0 to 20
  • The profit of T-Shirt changes in range from 15 to infinity
  • The constraint of budget change in range from 290 to infinity
  • The constraint of capacity change in range from 0 to 18.461538462
  • The constraint of demand change in range from -36 to 3

Hence, have fun in shopping.

HAPPY EARTH DAY 22 APRIL, SAVE OUR EARTH

First Published: Wednesday, April 22, 2009

Earth where human, animals, and botanicals live ages million years. Good ecosystem will make our earth healthy. Last years, degradation of our earth’s ecosystem is conscious by people. All parts of the world call this degradation with “Global Warming” because it signs with increasing temperature of atmosphere, sea, and land. Human as the best grade of creature must save the earth from destruction. All people need to consider saving energy and cleaning the earth with healthy life style habit.

Save electricity, save fuel, and save forest are example activities to save energy. Save electricity activities, such as turn off lamp, air conditioner, and electronic equipment if it is not really used, will reduce greenhouse effect. Other activity to support it is save fossil fuel like mineral oil (kerosene, paraffin waxes, gasoline, diesel, and petroleum), gas, and coal. The output of combustion are greenhouse gas emissions air pollutants such as carbon dioxide (CO2), methane (CH4), nitrogen oxide (NO), nitrogen dioxide (NO2), sulphur dioxide (SO2), volatile organic compounds, and heavy metals. In addition the other activity to reduce greenhouse effect is save forest because forest as earth’s lung function to reduce greenhouse effect. Forest will convert greenhouse gas emission into Oxygen (O2). Forestation and forbid illegal logging are the best activities to save our earth.

What should all earth’s citizens do? To save this earth, the simplest activity is to clean environment such as no littering, clean water resources, and manage wastes. First, no littering culture everywhere must develop among people because this simple activity can help to clean our earth. Second, clean water resources like gutter, lake, river, swamp, basin, and sea. Ideally, all water resources are free from rubbish and waste. Then, citizens, industry, and government need to pay attention about this. Third, the other simple activity is managing wastes with 3R (Reduce, Reuse, and Recycle). 3R means cut down rubbish and waste, exploit it which are still good to use, and produce it into new product.

The important activity to save our earth is from people themselves with healthy life style habit. Consume healthy food have two benefits. Beside good for health of the people themselves, it can affect psychologically to aware with healthy earth. Consume healthy food will not be complete if people do not want to do activity sports. Sport awareness also concern psychologically to make the earth green because in sport need oxide from plant. Healthy habits are also important to save the earth. It include not to smoke because smoking produce air pollutant like carbon dioxide, clean body and environment routine, and reduce in using plastics and paper.

“Global Warming” is a disaster that majority caused by human. Hence, they should improve the quality of earth. Saving energy and cleaning the earth with healthy life style habit are important activities which need supported from all citizen of earth. Then, HAPPY EARTH DAY 22 April, SAVE OUR EARTH.

Earthday Symbol

CORELAP METHOD FOR DESIGNING PRIVATE HOUSES

First Published: Friday, March 20, 2009

Most of people dream of possessing a private house. Some of them desire to design by themselves without using architect services, but they usually do not understand how to design it. Furthermore, most of people do not care about how build an effective and efficient house, because this is not necessary for a house design. On the other hand, some people consider that this matter is important; they can try to apply CORELAP method to design it.

CORELAP (Computerized Relationship Layout Planning) is a simple method in facility layout and location discipline which is usually used to design a factory and facility. As a facility of living, house should be designed by using CORELAP method. Following this is an example of house design in 180m2 land (12 meters x 15 meters). There are 3 steps to design with CORELAP method such as plan the rooms, size, and room’s relationship; calculation and design the CORELAP; and draw a draft layout.

First, a house consists of 15 rooms that the name of room, size, and relationship are showed in the “Activity/Space Relationship Diagram” and “Relationship Table” below. The rating of relationship between two rooms is sign as A, E, I, O, U, or X. The definition of “A” is absolutely necessary; “E” is especially important; “I” is important; “O” is ordinary closeness; “U” is unimportant; and “X” is undesirable.

ARD

Then, every sign needs to give a score that is started with U=0, O=1, I=n, E= n2, A=n3, and X=–n3. Hence in this example; the score are A = 125, E = 25, I = 5, O = 1, U = 0, and X = -125. Then, every room has total closeness rating(TCR). CORELAP starts with the biggest TCR.

Relationship Table

Second, the important step in CORELAP is learning about adjacency. Adjacency is a coefficient between two activities/spaces. The range of adjacency is between 0 and 1. There are three types of adjacency that are fully adjacent (side contact), partially adjacent (point contact), and non adjacent (no contact at all). Fully adjacent has 1 value of coefficient; partially adjacent has 0.5 value of coefficient; and non adjacent have 0 value of coefficient. CORELAP adapts this theory. Started with first room in the middle, put the relationship value with second order in the 8 side around it multiplied with adjacency. Then, put the next room in the highest value. All calculations illustrate in the figure below.

CORELAP HOUSE

Third, Draft a layout using CORELAP block diagram. Draw the requirement of land and make grid. Assume that one block covers 1 m2.  Draft all rooms refer to CORELAP block diagram. In this example, the draft layout will be showed in figure below.

Draft Layout of House

In the conclusion, CORELAP can be applied to make a layout design of house. This simple method should refer to other architect methods and rules.

USE EOQ TO ESTIMATE THE OPTIMIZE YOUR FOOD AND BEVERAGE STORAGE IN HOME

First Published: Friday, March 6, 2009

In the big company, inventory management uses EOQ to calculate the most economic quantity of order. EOQ also can use in the daily activity to calculate of consumer good storage in home. There are three main components to calculate EOQ such as re-ordering cost, demand, and holding cost.

In the daily life, everyone must keep something in home to store vegetables, meats, fruits, milk, book, bath equipments, and other consumer goods. To store everything, people usually don’t consider about the optimal time, size, and quantity when they buy something to stock in home. For example, how much mother should buy milk for her children in the market.

The first component is re-ordering cost (RC). The definition of re-order cost is total expenses involved in repeating supply such as order preparation, communications, transportation, inspection, administration, and other costs. For example, the distance from house to market is 20 km. Assume that the car’s consuming is 10 km per litre and gasoline price is $1 per litre. Therefore, the re-ordering cost is 2 x 20 / 10 x $1 = $4 (the calculation is for 2 ways, go to the market and go home).

The second component is demand (D). Demand in EOQ is define as the estimate of consume or how much the product will be sold in a year.  For example, the children can consume 8 cans of milk in a month. Hence the demand is 8 x 12 = 96 bottles annually.

The second component is holding cost or storage cost (HC). It can be defined as expenses involved in keeping and maintain a stock. It is including rent of space, equipment, materials, labour, insurance, security, interest, and other direct expenses. For example, a $200 locker can store 10 cans of milk. It estimates that have a reliability age 10 years. Therefore, we can calculate the holding cost as $50/10/10 = $2 per can annually.

The calculation of EOQ for this example is EOQ = (2xRCxD/HC)0.5 = Ö(2 x 4 x 96) /2 = 19.6 ~ 20 cans. It means that each order or buy is 20 cans of milk. Moreover, the calculation of total annual inventory cost is VC = (RCxD/EOQ) + HC*EOQ/2 = (4×96/19.6) + (2×19.6/2) = 19.6 + 19.6 = $39.2. In addition, the time between order is 360/5 = 72 days (around 2.4 months).

By this calculation, each family is able to calculate the most optimal storage of daily consumer goods. In this example if the mother buys 15 cans every purchase (below EOQ), the total annual inventory cost will be VC = (RCxD/Q) + HC*Q/2 = (4×96/15) + (2×15/2) = 25.6 + 15 = $40.6. It will be the same if the mother buys 25 cans every purchase (above EOQ), the total annual inventory cost will be VC = (RCxD/Q) + HC*Q/2 = (4×96/25) + (2×25/2) = 15.36 + 25 = $40.36.

For conclusion, each family can save money with EOQ calculation in daily life.

INDUSTRIAL AUTOMATION’S DILEMMA IN THE MODERN TECHNOLOGY AGE

First Published: Monday, February 23, 2009

In the manufacturing industry, factory needs a good performance in the line of production. Good performance means good pace, high rate of productivity, high percentage of efficiency, small number of defect product, minimize number of rework, uniform measurement, standard process, and etc. Therefore, people develop machinery to meet those all requirements.

In the beginning of Technology Age, people developed simple machine to help and improve the process manufacturing line to reach productivity and quality. Industrial Revolution in England was able to open mindset of people in the world that people need some tools to make this life easier. People raced to invent a new product to provide better and easier living.

In the modern technology age, machinery grows very fast. Production processes are control by technologically elements like button, switch, driver, valve, motor, and etc. All control elements will be organized in one brain called PLC (Programmable Logic Controller) and programmable computer. In addition, automation industries are growing fast in developing pneumatic machine, electric machine, electro pneumatic machine, hydraulic machine, mechatronics machine, robotics, and computerize elements. These tools are very simple and fast to use in the production line. For example, if factory want to produce certain colour and quantity, the operator only need push some button and input number in the controller.

Industrial Automation brings a lot of alteration in the manufacturing world. With some machine, factory only need some operator to operate the machine. In the old manufacturing, factory requires a lot of people to do the cycle of production. For example cutting material from metal, factory only needs one CNC machine operator, one draftsman, and some helpers. If this job works manually, factory needs more people to do the same job with the same time of production. The quality of machine usually is better than manual work because machine can work more precise and constant than manually work. This factor perhaps becomes consideration of company to invest machines than workers.

This trend does not only happen in the manufacturing, but also in the public services field like transportation. For example, if in the old time bus company use two workers (one as a driver and one as assistant to a driver); now company use only one workers (driver) because bus company use RFID (Radio Frequency Identification) technology and one chip inside a smart card that brings by each passenger. In the future, industrial automation will be growth. All fields will manage like robot. The people’s jobs will change with automation elements and machines. For example, bus and train conductor change into RFID, bus and train driver change into automatic bus and train, traffic police change into CCTV (Close-Circuit Television) camera, parker change into automatic security parking, bank teller and officer change into ATM (Automated Teller Machine), cashier change into self-service machine, tollgate officer change into ERP (Electronic Road Pricing) gate and etc.

In conclusion, the benefit of Industrial Automation will become dilemma in the modern technology age. Unemployment will be higher in the future because all jobs of people will be change by technology. On the other hand, company needs all the best to provide high quality of products and services; although they need to invest money for technology. In one side, automation technology gives benefit to all people. On the other side, it needs alertness of human.