Lecture 02: Manufacturing strategy

Question 1

SIPOC and 4M

Answer 1

Question 2

SIPOC for services? (2x5)

Answer 2

Question 3

What are the 2 “Effs”? Which eff should you prioritize?

Answer 3

Effectiveness

• Doing the right thing.
• The degree to which something is successful in producing a desired result.

Efficiency

• Doing things right!
• The state or quality of being efficient. Thus, achieving maximum productivity with minimum wasted effort or expenses.

Effectiveness - because the customer cares about effectiveness directly (right product) and indirectly about the efficiency (price)

Question 4

What is servitization?

Answer 4

the tendency of manufacturing companies to sell services and solutions, rather than just products.

Question 5

What are the three phases to describe the industrial transition towards servetization? (3)

Answer 5

The company …

1. focuses on physical core products.
2. provides core products with added services.
3. sells integrated bundles of products and services. These bundles are also called product-service systems (PSS) and deliver required functionality in a way that reduces the impact on the environment

Question 6

What are the benefits of servetizations and offering product-service systems? (5)

Answer 6

• Increased customer value
• Closer interaction with the customer
• Barrier to competition
• More stable cash flow
• Access to operational data

Question 7

Which aspects are required/implied with the shift of the business model towards selling PSS (Product-Service System)? (4)

Answer 7

• The customer will be interacting with O perational processes
• Challenging P ricing
• Establishing A lliances to provide services
• Increased L ifecycle responsibility

Question 8

What is the Customer Order Decoupling Point (CODP)? (2)

Answer 8

separates activities, from …

• order-driven
• forecast-driven

Question 9

What are the four distinct production strategies?

• Name an example for each distinct production strategy!
• What do you have to consider with them? (4)

Answer 9

Engineer-to-Order (ETO)
Oil-plants (Products and services are created from the drawing board meeting customer requirements.)
Make-to-Order (MTO)
Airplane manufacturers (Individual customers are identified during production; each order is made to a particular customer
Assembly-to-Order (ATO)
Dell computers (Builds sub-assemblies in advance of demand, and then puts them together to make the final product when a specific customer order is received.)
Make-to- Stock (MTS)
Cheese (Making standard items that are put into inventory, which can be used immediately to fulfill customer demand)

Strategies are very generic, most companies will use a mix of them

Question 10

What influences the position of the CODP? (2x4)

Answer 10

Speculation

• CODP - placed downstream if there are process constraints or delivery service requirements.
• Strategy - involves speculating the number of items that could be sold.
• Advantages - Economies of scale, no stockouts.

Postponement

• CODP - moved upstream due to product-market constraints or inventory cost considerations.
• Strategy - involves postponing decisions until customer orders are certain.
• Advantages - Lower inventory holding costs, reduced risk of obsolescence.

Question 11

What is the T-point? (2)

Answer 11

• “Variation explosion point”
• The point where the product goes from one or a few variants to many

Question 12

What influences the position of the CODP? (4)

Answer 12

To the right:

• process constraints
  (long lead time, bad process control)
• delivery service requirements (quick delivery, high delivery reliability)

To the left:

• product market constraints
  (irregular market demand, specificity of product)
• inventory cost considerations
  (low stocks, reduce risk of obsolescence (veraltern))