This is how the US government came to own ships named SS Stage Door Canteen……
This very example is something that\’s running around my head at present.
Say there was a plan (entirely ephemeral, unlikely to be ever realised, but something that is at least possible in the physics of this universe) which would require putting 160 million tonnes a year of stuff through furnaces.
Currently big furnaces cost $300 tonne per year capacity (so, a 500,000 tonne a year capacity furnace is $150 million), are cheap to run (relatively) and take 2-4 years to build.
OK, so over the years you need to expand out to 320 of these furnaces (I said it was unlikely!).
Now, would it change the game entirely if you went for mass production techniques of furnaces? Let\’s say we went for 50,000 tpa furnaces. We now need 3,200 to build out. If they\’re all at $300 tpa then, well, we\’ve got our capital requirement rather more granular, possibly easier to finance, true, but almost certainly at the expense of higher running costs.
But what if that very mass production technique took our production costs down to $200 tpa? $50 tpa?
Now, yes, obviously, if you knew what that mass production cost was then working out whether to do it or not is simple, a few numbers into a spreadsheet and bingo!
But what does anyone reckon the discount for mass production would be?
Currently our $300 tpa (umm, the world\’s not mine) furnaces are built at the rate of one or two globally each year. What if we decided to build the smaller ones at a rate of one a day? Or the large ones at 3 a month? (to give an equal decade long roll out for the globe).
What does anyone think the savings on the $ per tpa number would be from proper, one design and one design only, entirely interchangeable parts etc, mass production would be?
Liberty, or Model T furnaces?