Cummins Engine Company, a global power leader, is a corporation of complementary business units that design, manufacture, distribute, and service diesel, electric power generation systems, natural gas systems, and related technologies to its customers all over the world (Cummins Inc., n.d). Cummins Engine Company was founded in 1919. It is headquartered in Columbus, Indiana, the United States. As of 2015, the company employed more than 55,000 employees. Cummins Engine Company operates internationally, with its products sold in over 190 countries through a network of 600 distributing branches (Cummins Inc., n.d).
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Cummins Engine Company has operating segments that include power generation segment, engine segment, components, and distribution. The segments share customers, technology, strategic partners, and branding (Clothier, 2015). In a broader perspective, Cummins produces a variety of engines such as on-highway engines, off-highway engines, stationary fire pump engines, G-drive engines, marine engine-recreation, marine commercial engines, engines for rail locomotives, and engines for mining equipment. In addition, Cummins Engine Company manufactures power generators such as commercial industrial generators, residential generators, light commercial generators, marine generators, recreational vehicle generators, rental generators, data center continuous rating machine engines, paralleling system, transfer switches, remote monitoring, accessories, and alternators (Clothier, 2015). Some of the components produced by Cummins Engine Company include diesel exhaust fluids, fuel system additives, filtration and exhaust products, coolants, after-treatment devices, silencing systems, and turbochargers. Cummins Engine Company provides after-sell services in case customers encounter technical issues with the engines they bought from the company as well as engine parts (Clothier, 2015).
Cummins Engine Company competes favorably with its global competitors mainly due to the provision of after sell service to its customers and the personal sales method of advertising, which provides enough knowledge to its customers during the introduction of new engine product on the market. Some of the dominant players in the engine manufacture and service industry include Caterpillar Inc., Navistar International Corporation, Detroit Diesel Corporation, Chrysler, Ford, and Ram among other competitors (Clothier, 2015).
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2. STRATEGY OF THE COMPANY
Mission and Vision
Cummins has a vision to make people’s lives better by unleashing the Power of Cummins. The statement guides the company’s vision for its more than 55,000 employees. Cummins specializes in manufacturing the technologies that serve various needs of its customers across the globe. In order to do this, the company unleashes the power of its employees, their commitment, and energy to make ensure that the company maintains leadership and position in the markets where it operates. The company’s mission specifies approaches of unleashing the Power of Cummins that includes motivating its team to act as if they are owners working together (Cummins 2009 form 10K report, 2010). The company wants to exceed customer expectations by ensuring early market reach with its products, to collaborate with the company’s customers to allow success, to ensure that all the company activities lead to a cleaner and healthier environment, and to create wealth for its stakeholders (Cummins 2009 form 10K report, 2010).
Particularly magnified is Cummins mission towards a healthy environment, which specifies that everything we do leads to a cleaner, healthier, safer environment (Cummins Inc, 2015, p. 20). Through this mission, Cummins considers the welfare of the people and the preservation of the environment as its priority in its manufacturing processes. The company uses a low-cost strategy to promote its products to the customers, which is justified by one of Cummins Engine Company’s missions that puts emphasis on producing affordable products to the consumers.
There are five key principles, upon which Cummins business strategy is based. The first principle is to seek to be a low-cost producer on the market. The low-cost principle is anchored on the fact that system and product costs are critical performance parameters for the company’s customers. To be cost leaders in the industry, the company continues to leverage innovative technology, initiate economies of scale, ensure global presence, and initiate customer partnerships. To reduce costs and lower breakeven point as well as maintain a competitive advantage, the Cummins team has developed key initiatives integral to the strategy, and they are the application of Six Sigma, global sourcing, and technical productivity (Cummins Inc, 2015). The company has applied Six Sigma in its manufacturing processes since 2000, in the initial design of new products, and in expanding programs to include processes with suppliers, customers, and distributors. In the global sourcing, Cummins management ensures cost reduction efforts in the supply chain that includes global procurement from low-cost countries, such as Brazil, India, and China, to manufacture its products and develop local suppliers. For its technical productivity, Cummins operates 17 technical centers across the globe to enhance research and development.
The other principle, upon which Cummins strategy is anchored, is to prioritize expansion into related markets (Marquis & Raynard, 2014). In its objectives, the company plans to focus on the growth initiatives in related businesses that can enable the use of existing investments in technology or products, in the market presence, and in the leading brand names to establish a competitive advantage. The company particularly focuses on the ventures that complement the existing businesses through less cyclical and less capital-intensive ventures, or ventures that are counter-cyclical to the company’s core business.
The strategic principle of creating a greater shareholder value uses return on equity as the measure of consolidated financial performance (Jensen, 2001). The company reports the performance of operating segments based on segment EBIT, the company’s primary measure of financial performance; segment EBIT entails the scrutiny of earnings before taxes, expenses, and minority interests. Finally, the company seeks to create the right environment for its success. Creating right environment for success implies creating an inclusive learning environment and the performance ethics that attracts, develops, and retains high-quality talents (Wilson, 1999).
Cummins measures success through skills and competency assessment, the development of the leadership outcomes, and the participation in tailor-made and individualized development and training programs (Branham, 2005). The company management measures the productivity of its workers based on the productivity level of the individual workers. The employees, who produce more products than their colleagues, are rated as higher experienced ones than their counterparts. Such a performance measurement method is grounded on the basis that it is difficult to figure out who is more skilled due to the huge number of employees of Cummins Company, the numerous and different branches as well as various geographical locations. In addition, there may be skewness during the analysis of the productivity of workers since the supervisors may favor some employees in the company. Although such a kind of approach can weigh down on teamwork, it motivates the company workers and helps them to develop individual visions and goals that help in achieving the company’s mission.
An organization can employ different types of forecasting (Gor, 2009). Thus, the following forecasting approaches are discussed in this section. They are technology forecasting, sales forecasting, forecasting for raw materials and spare parts, economic forecasting, and staffing needs forecasting. Technology forecasting provides accurate and deep understanding for a significant technological changes in the future. Consequently, the technology forecasting approach can help the management team at Cummins Engine Company to make better decisions with regard to the strategic corporate planning, the investment in new process technology, product development, production and marketing, and the purchasing of new technology. Technology forecasting has no specific time horizon, to which it should be forecast since technology keeps on changing (Gor, 2009). Concisely, technology forecasting enables Cummins to be up to date with the latest technology and to stay afloat on the market with regard to the technological trends.
Through sales forecasting, the Cummins Engine Company management team is able to comprehend market trends and the demand for the company products to approximate the total amount of sales the marketing team can make in a year (Gor, 2009). For the production team, the sales forecasts are necessary to help trigger the forecast for production, which in turn helps in the forecasting of the raw materials needed for manufacturing. In brief, sales forecasting enables the management team to control the inventory cost, the production cost, and the storage capacity at the company. Forecasting for raw material and spare parts is necessary, as the company management team needs to maintain an inventory of raw materials to keep up with the production processes to reduce the storage cost. On the other hand, the company maintains the inventory of spare parts to enable them to repair their own machinery and their products leased to the customers.
Forecasting for staffing needs is particularly significant for the companies operating within contexts of economically developed countries, as there is a shifting emphasis from manufacturing to services (Gor, 2009). Cummins Engine Company specializes in offering services that are geared towards assisting in the industries such as travel, tourism, entertainment, legal aid, health services, financial, educational, design, and maintenance. For such a company, forecasting sales translates into forecasting demand for services, which then translates into forecasting staffing needs to provide the required services.
Forecasting economic trends, which is of the main interest in this section, is the process of making predictions about the economic performance of an organization or a country (Gor, 2009). With the possible exception of sales forecasting, the most widely curved forecasting effort is devoted to forecasting the economic trends on a regional, national, or even international level. Cummins Engine Company has devoted a considerable amount of its resources to having accurate forecasts of the economic trend.
Cummins appeared to dip in its performances in more than three years to 2016 when its third-quarter profit lagged behind the analysts estimates, and the company revised its annual sales forecast downwards due to the falling demand for its heavy-duty engines. Over this period, the management team made a decision to cut 2,000 jobs as part of the company’s plan to save about $200 million in expenditure. As of June 2015, Cummins Inc. announced quarterly earnings of $2.14 per share on a $4.62 billion revenue against the earlier forecast of $2.60 per share on $4.91 billion revenue by Bloomberg (Clothier, 2015). The end year 2015 forecasts further suggested that orders in Brazil and China were at their multiyear lows, with no signs of improvements. However, the company’s revenue it North America increased by 4% against the 18% decline in the international markets (Clothier, 2015). Recently, on April 21, 2016, the consensus forecast from 29 investment analysts polled on Cummins urged the company’s investors to hold onto their positions in the company, a consensus forecast that has continued to hold after the rise from the October 2015 deteriorations (Cummins Inc., 2016). The 2016 earnings forecasts are included in the attached excel under forecasting (sheet 1).
Cummins had an annual revenue of $19.11 billion in the full year 2015, which was 0.58% better than the 2014 full-year result. However, the 2016 and 2017 full-year revenue forecasts suggest a dip in the revenues for the company (Cummins Inc., 2016).
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4. CAPACITY PLANNING
Capacity planning entails planning of the maximum level of output that a given system can potentially produce over a given period of time. Naturally, it is unlikely for any system to operate at full capacity through its entire life due to the natural inefficiencies and other factors that minimize the potential output (Krajewski & Ritzman, 2005). Cummins Inc., through its plants spread in five different parts of the world, attempts to produce goods that are sufficient for its market, although this is not necessarily the company’s optimum capacity. The company has plants in Brazil, India, China, Singapore, the UK, and the USA. In total, Cummins has about 85 manufacturing plants across the world. Engine sales today constitute about half of the company’s capacity, although power generation and components have grown to about 20% (Cummins Inc. np). Given its diversity of product offering, the company uses two sourcing strategies for its components. Cummins maintains two purchasing units – one purchasing unit for blocks and heads, and the other purchasing unit for all other metal components. Given its technical capacity, the company produces the sourced blocks and heads in-house, with specific lines dedicated to each job. However, the company buys the majority of the rest of the components machined-complete, which casts doubt on whether this is due to insufficient capacity or a decision to save on costs.
The head components and non-block, with just a small portion being raw castings, constitute approximately $550 million of the purchased castings that the company makes. On the other hand, heads and blocks purchases comprise about $450 million worth of the casting purchases (American Foundry Society, n.d.). The company outsources these raw materials from machine shops and metal casting companies that have in-house machining capabilities. Cummins global operations strains its casting sourcing strategy and eventually its capacity in the overseas plants (Cummins Inc. n.d.). The strain is particularly due to the rising costs of shipping the machined components to the overseas plants, although the company attempts to localize the production chain.
To achieve the lowest cost of ownership and maintain a sufficient capacity, Cummins attempts to develop a network of casting suppliers. Consequently, Cummins global growth has been based on technology sharing and the creation of successful joint ventures to meet production capacity. The company maintains long-term supply agreements with metal casters to enhance a steady capacity. For instance, when the company requires an entirely new component, it first checks with the existing suppliers to determine whether they have the ability and capacity to supply the products, which dictates the capacity of the company to produce completed market products.
However, the company management recognizes that the available capacity can be a pressing issue in certain plants. For example, during an interview, Mr. Rich Runge revealed the capacity strain that the company faced: some of the problems we have with [metal casting facilities] are that we have relatively low volumes, and they sell off their capacity (American Foundry Society, n.d.). To protect itself from the loss of supply capacity, Cummins maintains supply agreements with its suppliers. To keep up with the projected market growth, Cummins announced plans (in 2012) to do 30 new plants and 41 expansion projects (American Foundry Society, n.d.). Today, most of these plans and expansion projects are in operation, although a few have never been completed owing to market fluctuations. In brief, Cummins needs to keep with the market demands, to make newer and more advanced engines for the market. This implies that it has to source more, which adds up to more casting sourcing and the designing hurdles for the company; however the company management maintains that the company is up to the capacity challenge, leaving limited room for capacity shortages or excesses.
How to Calculate Capacity Planning
The estimation of capacity planning requires a good knowledge of a company’s current capacity and utilization (Krajewski & Ritzman, 2005). Utilization, the level to which an equipment, space, or labor is used, is expressed in the attached excel under capacity planning (sheet 2).
An example calculation;
If operating in ideal conditions, the fabrication department of Cummins low-diesel engine in India can make 100 engines per day. However, the Cummins management believes that the company can sustain a maximum output of 45 engines per day economically over a long period of time. Currently, the department produces an average of 50 engines per day.
From this, the utilization of the department, and the effective capacity, and the relative peak capacities can be calculated for capacity planning.
5. PROCESS SELECTION AND FACILITY LAYOUT
Cummins has a well-structured production and facility layout that enables the operators to provide vital manufacturing execution systems (MES) for the global manufacturing processes and to standardize manufacturing execution system. The company’s process selection and facility layout are presented using the attached PowerPoint.
6. PRODUCT AND SERVICE DESIGN
Cummins deals with a number of power technologies; this section focuses on the manufacture of Cummins NT engine. The illustrations of Cummins NT engine are given in figure 3 below.
Cummins NT Engines are designed with four main components – the skeletal components, the engine system components, the application components, and the performance components. The skeletal components of the design, such as the engine head, block, and the connecting rod, are characterized by low proliferation, high volumes, and stable designs. The sub-system components of the engine, such as the lubricating oil and the water pump, guarantee and optimize engine performances. The components are characterized by high volumes and relatively low proliferation within the generations of mature engines. Since Cummins engineers understand possible volatility of the component designs, there have been frequent design modifications to increase engine performance (Cummins Inc. n.d.).
The application components, such as flywheel housings and exhaust manifolds, can be designed to reflect the individual customer preferences. Although highly proliferated, they enjoy moderately stable designs. The performance components of the Cummins NT engines, such as compression brakes and turbocharges, are characterized by low proliferation, stable designs, and moderate volumes. Other performance component designs include fuel injectors that are designed for high or low volumes but with frontier manufacturing methods such as laser machining or electro-discharge (Cummins Inc., n.d.).
Based on the design distinctions discussed above, the Cummins team has developed different classes of engine components using three key parameters of the predictability of demand, the stability of design, and the parameters of volume. Consequently, the company has achieved high volume products with predictable demands and stable designs, medium to low volume engines with predictable but with rapidly evolving designs, medium and low volume engines that have predictable demands and stable designs, low volume engine components with quite unpredictable demands, and engine designs that require non-traditional manufacturing processes.
Components that require specialized and unique processes may appear impossible to separate on a volume basis. All these components are channeled to the same machining area, where they co-exist regardless of the demand. Common channeling is prompted by the fact that machining individual components may be too expensive and that the technical skills for such designs may be too specialized to allow the Cummins plants to support the manufacturing of more than one production areas. Therefore, parts must wait in line, with high runners expected to move faster in the queue.
The superior Cummins technology designs enable them to work in the scenarios of extreme heat, cold, high altitude, and even deep underground without complications, which implies the reliability of technologies. The Cummins engine designs can travel up to two millions miles under proper maintenance, which is more than ten times expectations of most cars. The Cummins generators are similarly designed to serve large hospitals and data centers for tens of thousands of hours without failures.
Legal, Sustainability, and 3R
The cutting-edge technology that the Cummins team uses to produce its engines enables the customers to experience high power at almost zero emission and to do business in the competitive and demanding applications in the world. To meet the environmental legal requirements, Cummins fuel injectors, for instance, are designed to a near-perfect cylindrical form to apply at more than 30000 psi in order to enhance combustion while minimizing levels of emission. The Cummins turbochargers are designed to spin at 120,000 revolutions per minute, which boosts the engine power while providing the required heat for chemical reactions in the after-treatment systems. The after-treatment converts oxides of nitrogen, which would otherwise contribute to smog, into water and nitrogen that are then safely emitted into the environment (Cummins Inc., 2015).
The design and technological advancements have contributed to the reduction of diesel engine emissions significantly in North America in the last 20 years (Cardwell & Krauss, 2013). The company has chemists who work to remove pollutants from emissions, and its computational fluid dynamics experts work to model the products to simulate the harsh environmental conditions within the engines.
In brief, the Cummins engine designs align with the company’s mission; everything we do leads to cleaner healthier, safer environment. In 2014, the company adopted comprehensive environmental sustainability plan that introduced goals to reduce the use of water, energy, and minimize greenhouse gas emissions while enhancing recycling at the company. The recycling efforts at the company plants have been recognized by the authorities, with Cummins UK facilities winning National Recycling Awards in 2014 for the plants for waste minimization and recycling. The Waste Prevention and Corporate Recycler of the Year Awards were given after the UK plant had reduced the facility’s waste generation by about 31% (8,729 metric tons) and increased recycling rates from 96.4% to 98% between 2012 and 2013 (Cummins Inc., 2015).
Given in figures 4-6 below are environmental impact analysis conducted to determine the company’s environmental impacts.
Cummins Engine Company has presence in 190 countries with over 5,500 distribution networks in all these countries. The company has manufacturing plants in the USA (the parent plant), the UK, China, Brazil, and India. The parent plant is located in three redeveloped blocks in downtown Columbus, Indiana. The headquarters can accommodate about 1,000 employees. In 1919, the location of the parent plant was based on the preferences and considerations of Clessie Lyle Cummins, the founder of the company. However, the subsequent choices of the Cummins plants locations in different countries were strategic (Cummins 2009 form 10K report, 2010).
The location of Cummins plants in India, China, and Brazil is strategic, given a number of factors. Combined, these markets have a population of more than 2 billion people and they account for 25% of the world’s GDP, which has since attracted several other manufacturers to the markets. Usually, a country’s population and demographics directly influence the market and economic potentials in addition to the capacity of the country to function as an engine of global economic growth and development. Economic analysts forecasts suggest that China, India, and Brazil will be among the largest economies of the world by 2050. Figure 7 given below suggests growth predictions between 2007 and 2050, highlighting the countries economic growth potentials.
The forecasted growth and development in the countries have so far attracted the establishment of car, generators, and other locomotive manufacturing plants within the contexts. Due to the availability of customers, the establishment of these manufacturing plants specifies a potential market for Cummins, with its movement into these contexts. The closer proximity with the market reduces costs that may be incurred due to the shipment of finished products to the customers.
Further, the availability of supplies and cheap labor in China, India, and Brazil helps Cummins in managing the costs of production, making the choice of the location of company plants in these locations relevant.
The Cummins plant locations in the UK and the USA remain relevant as the automotive industries in these countries continue to grow. A number of commercial vehicle manufacturers are active in the UK, including Ford, Alexander Dennis, Leyland Trucks, GMM Luton, Land Rover, Honda, Toyota, and Nissan among others, most of which source for engines, or engine components from Cummins. Concisely, the location of Cummins Inc.’s plant in the UK and the USA means closer proximity to the market.
8. QUALITY MANAGEMENT
In Cummins, like in any other production company, there are four aspects associated with the determination of quality, and these are the quality of design, the quality of performance, the quality of conformance, and the quality of ease of use (Rose, 2005). The quality of the design is about the set conditions that a given product must minimally have to satisfy the requirements of its customers (Rose, 2005). Exploiting this concept, the Cummins power technology products are designed in such a manner that they meet the needs of the customers. Particularly, the engines have the required power the meets varying demands of different customers. However, the quality of design requires that designs must be simple and less expensive for them to meet the customer’s service expectations. For example, Cummins NT diesel engines are affordable with minimal environmental emissions. The quality of design at Cummins is influenced by a number of factors, including the cost of production, the type of product for each component, the profit policy adopted by the company, the market demand for the engines, the availability of raw materials readily obtained from the suppliers, and the product reliability.
The other aspect of quality, which is the quality of conformance, refers to meeting of standards defined in the design phase once a product is manufactured (Rose, 2005). In addition, the quality of conformance is concerned with the quality in control, starting from monitoring of the raw materials to the final products. Consequently, the definition of the quality of conformance captures the detection of defects, the root cause analysis of the defects, and the prevention of the defects. In its production processes, the Cummins manufacturing department employs various methods or, most significantly, the statistical process control techniques to deter the occurrence of defects. The company conducts inspections and the testing or statistical data analysis from the processes to detect the defects of its products. When the root cause behind the availability of defects in the production process is investigated and identified, the quality control team finds it easy to take corrective actions to prevent the occurrences of such defects in the future production processes.
The quality of performance aspect deals with how well the product works when put into use. The quality of performance can be similarly considered as the measure of degree, to which a product can satisfy the needs of the customer from the perspective of the quality of conformance, and the quality of design (Rose, 2005). For Cummins, meeting the expectations of the consumer remains the focus of the quality of performance. Before the release of its products into the market, the Cummins manufacturing department tests all its engines to determine their quality of performance. Once released into the market, Cummins conducts customer surveys to understand how the company customers perceive the products. If the products do not conform to the customer’s expectations, then adjustments are done, sometimes requiring recalling the products already on the market. Finally, there is the aspect of the ease of use, or the ease, with which a consumer achieves goals, for which the product is purchased.
For inspection purposes, Cummins has quality management system specialists who ensure that the organization deploys the identified requirements of the current version of the business and the accepted management system standards such AIAG Core Tools and ISO 9001. Through regular inspections of the production system, the quality assurance team and the inspection teams ensure that effective management review processes are installed to enhance improvement with regard to the specific customer requirements. The quality management system specialist and others within the quality inspection team usually attempt to manage QMS audits and compliance with operations. The team solicits and suggests approaches for improving quality compliance through the input of different stakeholders, including the customers.
Application of Cause and Effect Diagram in Enhancing Quality Management at Cummins
Application of the Cause and Effect (fishbone) Diagram can help the Cummins production department team to visually diagram complications that deter the achievement of quality products, enabling the team to solve the problems with ease (Blesa, 2015). If used at Cummins, the diagram will enable the team members to separate the content of the quality problems from the history, allowing the team consensus during problem solution. Figure 8 below is an image of cause and effect diagram;
In the example of an analysis of the quality of Cummins NT diesel engine during testing, such as troubleshooting the problem of the Killer Dowel Pin, here is how the steps can be applied.
The customer reports he heard some noise when fixing the engine, and then the engine stopped and would not restart. At this point, a problem is identified. In verifying the problem, a company technician checks the engine for operation, and the engine does not start, therefore verifying the problem. The next step for the technician is to figure out and determine the cause. The determination of the cause can be represented in a diagram as given below
Pin is worn-out Poor starting
The next step is to try the corrective action for all the suspected deficiencies until the real deficiency is corrected.
Once the problem is corrected, the team should embark on understanding the root cause of the problem, followed by questioning on whether the designs can be changed to eliminate the problem or whether the problem requires simple modification to stop the dowel pin from falling. As in figure 8, cause and effect in defects can help in determining whether the problem is the result of design shortcomings, the failure by the users to follow instructions, and failure of the product to conform to the environment among other possible causes (Blesa, 2015).
As it is, the quality of the Cummins engines is among the leading ones in the world, leaving limited room to recommend the improvements in this discussion. The only exception that may require improvement is the outer appearance of the engines, which is rarely modified over the years, to make it more appealing; otherwise, the suggestions to improve the inner power of Cummins diesel engines are beyond the scope of this discussion, given the satisfactory values and experiences that customers draw from these products.
Benchmarking involves measuring the performance of a given business against that of its competitors on the same market. Cummins has a hundreds of competitors, with which it can be benchmarked. However, this discussion considers the performance, particularly, with regard to the quality of the leading market players. Ford, which also doubles up as Cummins customer, is one of its fiercest competitor on the market. The company has a reputation of selling quality diesel and gas engines, particularly in Europe. Similarly, Caterpillar competes with Cummins in the diesel engine business, performing better than Cummins on the stock market and in terms of their revenues. Finally, there is Chrysler, whose diesel Dodge Ram 1500 outperforms Cummins NT diesel engine designs on the market.
The examples of how to use two quality tools (check sheet and control chart) is given in sheet three of the attached excel.
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9. CONCLUSION AND RECOMMENDATIONS
This paper has made a comprehensive analysis of the Cummins Engine Company business. From the study, it emerges that Cummins is an industry leader in design, manufacturing, marketing, and the sale of power technologies in the USA and across the globe. The study is particularly biased towards the study of diesel and natural gas engine. Established in Columbus, Indiana in 1919, the company has grown to be one of the largest power technology manufacturers in the world. Cummins has its headquarters in Indiana, USA, but it operates other plants in India, China, the UK, and Brazil. Despite the economic difficulties and fluctuating sales in initial major markets in North America and Europe, Cummins position in the emerging markets of India, China, and Brazil has enabled it to sustain business in the four of its business segments – engine segment, power generation segment, component segment, and distribution segment.
The emerging markets are expected to continue growing and sustain the company in shorty-term, propelling the company’s growth in the long-term. In addition, Cummins excellent financial position and high rating in the stock market have the company evenly positioned, even as the US economy continues to recover. Forecasts depict a company that will steadily grow in revenues through to 2017. Apart from the financial performances, Cummins observes legal, sustainability, and 3R (reduce, reuse, and recycle) factors of environmental compliance. As a result, Cummins is poised to extend its technological developments and reduce the gap in global demand for emission-controlled technology.
Cummins has a strategy that is anchored on the low cost of production, the application of Six Sigma, the prioritizing of expansion into the emerging markets, on creating value for shareholders, and on the creation of the right environment for success. Cummins capacity planning reveals a company that meets its market capacity by partnering with it suppliers to enhance steady market supply. While the company currently meets its market demand, there are no indications that it operates at under capacity. A discussion of the company’s product design depicts a company designing products that meet the demands of its customers, with different market segments targeted at the differentiated engine products – some low-volume, while others are high volume.
In brief, Cummins Engine Company is destined for a stronger future performances and growth, particularly owing to its competitive advantages on the emerging markets such as China, India, and Brazil. Further, Cummins’s future performances are more likely to benefit from the company’s environmental compliance capabilities, the global business partnerships/footprints, superior designs and in-house manufacturing, which lowers the costs of production, to enable the management to focus on profits.