4.4d Improving flexibility Flashcards
Ways flexibility can be improved
- Managing customer demand
2. Managing the business’ supply
Ways to manage supply
- Produce to order
- Mass customisation
- Outsourcing
Produce to order definition
Product is only manufactured once and order has been received
Modular approach definition
Basics of the product are fixed and some elements are allowed to be customised
Advantages of produce to order
- Customers get exactly what they want
- Less costs spent on buying raw materials that are never needed
- Can add value
Disadvantages of produce to order
- No consistency of production
- Increased unit costs due to poor capacity utilisation
What does mass customisation involve?
Making bespoke individualised items for different customers but on a mass level
(See diagram)
Four approaches to customisation
- Transparent
- Collaborative
- Adaptive
- Cosmetic
How do adaptive customisers work?
They offer one standard, but customisable product that is designed so that users can alter it themselves.
How do cosmetic customisers work?
They present (package or market) a standard product differently to customers
How do transparent customisers work?
They provide individual customers with unique goods or services without letting them know explicitly that those products have been customised for them
How do collaborative customisers work?
They conduct a dialogue with individual customers to help them state their precise needs, the make customised products for them
Advantages of mass customisation
- Can better target specific market segments
- Allows a competitive advantage to be created
- Added value
Disadvantages of mass customisation
- Rejected customised products cannot be reused for another customer
- Further increased flexibility from suppliers is needed
Advantages of part-time workers
- Lower costs
- More flexible
- Can recruit wider range of skills for same total employment cost
