• ATMA CHAMP ENT. CORP. —Cost Strategy of TCO Model

Abstract

ATMA CHAMP ENT. CORP., founded in 1979, is the largest specialized screen-printing manufacturer in Taiwan with a product line spanning across seven industries. Most of the ATMA manufacturing techniques are from Japan, emphasizing cleanliness, modularity, and standardization in their plants. ATMA used high-quality and well-known brands to source its key components. These included control components and materials from Japan and German-made components such as motors, steel balls, lead screws, and line rails. Although their pieces cost more than the alternatives, ATMA continued to use these suppliers for their quality and accuracy. ATMA held a “creative competition to reduce costs” in March 2011. Mr. Wu, a development engineer, encountered company bureaucracy and modularity when he was part of the product design team. He found a solution that would significantly lower costs and increase flexibility in the development department. Mr. Wu then began interviewing colleagues in various departments. Intent to present this proposal in the competition in June, Mr. Wu reported to the department managers and prepared for the questions he might be asked for data collection and answers. This paper aims to understand the concepts of local and global optimization by reviewing this case, applying the concepts to calculate the total cost of ownership.

Keywords: Total Cost of Ownership (TCO), Local Optimization, Global Optimization