Order fulfillment in high variety production environments

Providing high levels of product variety and product customization is challenging for many companies. This paper presents a new classification of production and order fulfillment approaches available to manufacturing companies that offer high variety and/or product customization. Six categories of approaches are identified and described. An important emerging approach - open pipeline planning – is highlighted for high variety manufacturing environments. It allows a customer order to be fulfilled from anywhere in the system, enabling greater responsiveness in Build-to-Forecast systems. The links between the open pipeline approach, decoupling concepts and postponement strategies are discussed and the relevance of the approach to the volume automotive sector is highlighted. Results from a simulation study are presented illustrating the potential benefits when products can be reconfigured in an open pipeline system. The application of open pipeline concepts to different manufacturing domains is discussed and the operating characteristics of most relevance are highlighted. In addition to the automotive, sectors such as machinery and instrumentation, computer servers, telecommunications and electronic equipment may benefit from an open pipeline planning approach. When properly designed these systems can significantly enhance order fulfillment performance

Organizational, systems and human issues in production planning, scheduling and control

With global markets and global competition, pressures are placed on manufacturing organizations to compress order fulfillment times, meet delivery commitments consistently and also maintain efficiency in operations to address cost issues. This chapter argues for a process perspective on planning, scheduling and control that integrates organizational planning structures, information systems as well as human decision makers. The chapter begins with a reconsideration of the gap between theory and practice, in particular for classical scheduling theory and hierarchical production planning and control. A number of the key studies of industrial practice are then described and their implications noted. A recent model of scheduling practice derived from a detailed study of real businesses is described. Socio-technical concepts are then introduced and their implications for the design and management of planning, scheduling and control systems are discussed. The implications of adopting a process perspective are noted along with insights from knowledge management. An overview is presented of a methodology for the (re-)design of planning, scheduling and control systems that integrates organizational, system and human perspectives. The most important messages from the chapter are then summarized

Organizational, systems and human issues in production planning, scheduling and control

With global markets and global competition, pressures are placed on manufacturing organizations to compress order fulfillment times, meet delivery commitments consistently and also maintain efficiency in operations to address cost issues. This chapter argues for a process perspective on planning, scheduling and control that integrates organizational planning structures, information systems as well as human decision makers. The chapter begins with a reconsideration of the gap between theory and practice, in particular for classical scheduling theory and hierarchical production planning and control. A number of the key studies of industrial practice are then described and their implications noted. A recent model of scheduling practice derived from a detailed study of real businesses is described. Socio-technical concepts are then introduced and their implications for the design and management of planning, scheduling and control systems are discussed. The implications of adopting a process perspective are noted along with insights from knowledge management. An overview is presented of a methodology for the (re-)design of planning, scheduling and control systems that integrates organizational, system and human perspectives. The most important messages from the chapter are then summarized

The adoption of vendor managed inventory for hospital pharmaceutical supply

The study investigates Vendor Managed Inventory (VMI) for the supply of medicines between distributors and hospitals to identify factors that may affect VMI adoption. Multiple case studies are conducted involving five organizations (three hospitals, one distributor, and one manufacturer/ supplier). Four dyadic relationships are identified. Triangulation techniques are used in data collection, including interviews, site visits and document analysis to enhance reliability and validity. Case studies have been analyzed individually and comparatively. Two types of VMI initiatives – public and private sector - are identified in the supplier/hospital context. The public sector supplier focuses on improving service level while the private sector supplier seeks to strengthen relationships with key customers. Hospital characteristics, including the type of hospital, top management perspectives, and the hospital’s willingness to share information, are critical in decisions on VMI initiation or termination. Relatively stable demand products are preferred for a VMI approach. Hospitals may perceive risks in VMI adoption for medicines as it involves relinquishing control of critical supplies and may result in ‘lock-in’ with a particular supplier. The paper provides supply side and demand side perspectives on VMI adoption in an important sector. It highlights the need for greater understanding of the perceived and actual risks in VMI from the perspective of both the hospital and the supplier and for much clearer advice on which pharmaceutical products are appropriate for VMI control in a hospital context. VMI is advocated as being beneficial in many supply contexts. However, it may be challenging to implement. This study identifies a range of factors that affect the adoption of VMI in hospital pharmaceutical supply chains. The cases have been conducted in one country, which may affect the generalization of the findings. Wider empirical evidence from other countries in both developed and less developed regions will be beneficial

Review of order fulfilment models for Catalogue Mass Customization

Mass Customization (MC) is not a mature business strategy and hence it is not clear that a single or small group of operational models are dominating. Companies tend to approach MC from either a mass production or a customization origin and this in itself gives reason to believe that several operational models will be observable. This paper reviews actual and theoretical fulfilment systems that enterprises could apply when offering a pre-engineered catalogue of customizable products and options. Issues considered are: How product flows are structured in relation to processes, inventories and decoupling point(s); - Characteristics of the OF process that inhibit or facilitate fulfilment; - The logic of how products are allocated to customers; - Customer factors that influence OF process design and operation. Diversity in the order fulfilment structures is expected and is found in the literature. The review has identified four structural forms that have been used in a Catalogue MC context: - fulfilment from stock; - fulfilment from a single fixed decoupling point; - fulfilment from one of several fixed decoupling points; - fulfilment from several locations, with floating decoupling points. From the review it is apparent that producers are being imaginative in coping with the demands of high variety, high volume, customization and short lead times. These demands have encouraged the relationship between product, process and customer to be re-examined. Not only has this strengthened interest in commonality and postponement, but, as is reported in the paper, has led to the re-engineering of the order fulfilment process to create models with multiple fixed decoupling points and the floating decoupling point syste

Virtual-Build-to-Order as a Mass Customization Order Fulfilment Model

Virtual-build-to-order (VBTO) is a form of order fulfilment system in which the producer has the ability to search across the entire pipeline of finished stock, products in production and those in the production plan, in order to find the best product for a customer. It is a system design that is attractive to Mass Customizers, such as those in the automotive sector, whose manufacturing lead time exceeds their customers' tolerable waiting times, and for whom the holding of partly-finished stocks at a fixed decoupling point is unattractive or unworkable. This paper describes and develops the operational concepts that underpin VBTO, in particular the concepts of reconfiguration flexibility and customer aversion to waiting. Reconfiguration is the process of changing a product's specification at any point along the order fulfilment pipeline. The extent to which an order fulfilment system is flexible or inflexible reveals itself in the reconfiguration cost curve, of which there are four basic types. The operational features of the generic VBTO system are described and simulation is used to study its behaviour and performance. The concepts of reconfiguration flexibility and floating decoupling point are introduced and discussed

Consideration of the relevance of standard quality techniques in Mass Customisation

The business philosophy of Mass Customisation (MC) implies rapid response to customer requests, high efficiency and limited cost overheads of customisation. Furthermore, it also implies the quality benefits of the mass production paradigm are guaranteed. However, traditional quality science in manufacturing is premised on volume production of uniform products rather than of differentiated products associated with MC. This creates quality challenges and raises questions over the suitability of standard quality engineering techniques. From an analysis of relevant MC and quality literature it is argued the aims of MC are aligned with contemporary thinking on quality and that quality concepts provide insights into MC. Quality issues are considered along three dimensions - product development, order fulfilment and customer interaction. The applicability and effectiveness of conventional quality engineering techniques are discussed and a framework is presented which identifies key issues with respect to quality for a spectrum of MC strategies

Order fulfillment in high variety production environments

Providing high levels of product variety and product customization is challenging for many companies. This paper presents a new classification of production and order fulfillment approaches available to manufacturing companies that offer high variety and/or product customization. Six categories of approaches are identified and described. An important emerging approach - open pipeline planning – is highlighted for high variety manufacturing environments. It allows a customer order to be fulfilled from anywhere in the system, enabling greater responsiveness in Build-to-Forecast systems. The links between the open pipeline approach, decoupling concepts and postponement strategies are discussed and the relevance of the approach to the volume automotive sector is highlighted. Results from a simulation study are presented illustrating the potential benefits when products can be reconfigured in an open pipeline system. The application of open pipeline concepts to different manufacturing domains is discussed and the operating characteristics of most relevance are highlighted. In addition to the automotive, sectors such as machinery and instrumentation, computer servers, telecommunications and electronic equipment may benefit from an open pipeline planning approach. When properly designed these systems can significantly enhance order fulfillment performance

Managing product variety in quotation processes

Purpose – Manufacturers across many sectors increasingly operate in high variety environments. Research evidence suggests that variety has a negative impact on performance. However, the research literature is limited on the enablers that allow variety to be managed effectively and efficiently at the “front-end” of an organisation and in quotation processes in particular. Design/methodology/approach – This paper presents case analysis of the quotation processes from manufacturers operating in high-variety environments. Qualitative process modelling tools have been developed to allow representation of process complexities and informal process elements. Findings – Findings are presented on generic mechanisms for absorbing and mitigating the impact of variety on quotation processes. A generic quotation process model is presented comprising four key decisions centres: customization request initiation and information gathering on customer needs, classification of requests, resource control, and identification of information for reuse. Practical implications – The implications of the study for the automation of quotation processes in high variety and mass customization environments are discussed and it is speculated that different decision centres will dominate in different environments. Originality/value – The generic model developed by this research offers insight into the functioning of the core process elements of the quotation system. Reviewing an organisation’s structure and the information systems infrastructure supporting these decision centres should lead to the identification of potential system or reorganisation improvements