Modularity and Delayed Product Differentiation in Assemble-to-order Systems: Analysis and Extensions from a Complexity Perspective

The paper assumes a product design around modular architectures and discusses the suitability of the principle of delayed product differentiation in assemble-to-order environments. We demonstrate that this principle does not enable one to make optimal decisions concerning how variety should proliferate in the assembly process. Therefore, we propose to complement this principle in that we additionally consider the variety induced complexity throughout the assembly process. The weighted Shannon entropy is proposed as a measure for the evaluation of this complexity. Our results show that the delayed product differentiation principle is reliable when the selection probabilities of module variants at each assembly stage are equal and the pace at which value is added in the whole assembly process is constant. Otherwise, the proposed measure provides different results. Furthermore, the entropy measure provides interesting clues concerning eventual reversals of assembly sequences and supports decisions regarding what modules in an assembly stage could be substituted by a common module.modularity; complexity; ATO; delayed product differentiation

Efficient Order and Resource Coordination in Mass Customization

Mass customization manufacturing systems require a high level of adaptability and flexibility in production – especially in production planning and control. In particular, the Coordination of orders and resources is critical, because of the high volatility and the make to order principle. Multi-agent systems theoretically provide the required features to handle that complexity, but a lack of informational integration and organizational incompatibilities lead to low applicability. The application of Internet Technology provides the necessary interoperability and organizational alignment to support an overall application of multi-agent systems in mass customization.Mass Customization; Internet Technologies; Multi Agent Systems; Production Planning and Control

Variety Management in Assemble-to-Order Supply Chains

Assemble-to-order refers to a supply chain strategy in which products are not assembled until customer order arrives. It is based on the so-called form postponement that is to hold components at a generic form and to delay the point of product differentiation. The performance of an assem-ble-to-order supply chain depends on two main dimensions, which are responsiveness and achievement level of scale economies. Responsiveness refers to the capability of fulfilling customer requirements in a fast-paced manner, whereas the achievement of scale economies reflects the degree of operations efficiency. Assemble-to-order supply chains induce high product variety, which has adverse effects on performance. We use demand volumes as a proxy for scale economies and lead times as a proxy for responsiveness. A matrix that consists of both dimensions can be defined, in which we distinguish between short/long lead times and low/high demand volumes. This matrix is called performance matrix. On the other hand, the consequence that results from product variety is a high demand variability of end products, which also affects the demand variability of components. An analysis of component demand variability enables one to identify the components with low/high demand variability. These components can further be classified into supplied and in-house made components. Thus, a second matrix (called component matrix) with two dimensions, namely variability (low/high) and supply source (in-house/supplier) can be defined. Due to the supply source dimension in the component matrix, the supply chain perspective is also taken into ac-count. The combination of both matrixes into a single one provides the performance/component matrix for assemble-to-order supply chains. To use the final matrix, it is necessary to compute lead times, demand volumes and demand variability of the supplied and in-house made components. By plotting the components in the matrix, one can determine the problems induced by variety. In order to improve the performance of the assemble-to-order supply chain, the implementation of variety management strategies is necessary. The identified strategies are: commonality, component families, modularity, and platforms. Based on the performance/component matrix, we discuss how these strategies or a combination of them can contribute to derive recommendations that aim to alleviate variety impacts on the as-semble-to-order supply chain.Assemble-to-order; Supply Chain Management; Variety Management

An Institutional Approach To Operations Management In Internet Based Production Concepts

An important change in the socio-economic environment of industrial firms is the increasing dif­fusion of Internet Technologies in production processes. Applications of Internet Technologies may be directly implemented on the shop floor, e.g. in networking dislocated assembly lines, as well as in assisting management processes, e.g. in production planning and control. This leads to a strong approximation of the traditional production and operation systems and the Internet Technologies. While traditional production concepts, such as Lean Production, World Class Manufacturing and Agile Manufacturing, inevitably disregard this development, new production concepts arise that fundamentally consider the application of Internet Technologies on the shop floor. However, from a business management perspective, industrial firms have to accomplish new operating requirements deriving from this technological change. This paper provides a discussion of the consequences of Internet Technologies on operations management, as well as of production concepts based on Internet Technologies from an institutional point of view

Changes in Operations Management due to Internet based Production Concepts — An Institution Economical Perspective

Currently we have to realize a major change in the technological basis of manufacturing or even all production processes: The diffusion of new information and communication technologies, especially Internet Technologies, on the shop floor. Applications of Internet Technologies may be directly implemented on the shop floor, e.g. in networking dislocated assembly lines, as well as in assisting management processes, e.g. in production planning and control. Both, formal and empirical studies have verified a significant increase in productivity of manufacturing processes by intraorganizational applications of modern information and communication technologies (Barua/Lee 2001, pp. 37). Therefore, this change has a high influence on operations management. While traditional Production Concepts such as Lean Production, World Class Manufacturing and Agile Manufacturing inevitably disregard this development, new Production Concepts arise that fundamentally consider the application of Internet Technologies on the shop floor. However, from a business management perspective, industrial firms have to accomplish new operating requirements deriving from this technological change. This paper provides a discussion of the consequences of Internet Technologies on operations management, as well as of production concepts based on Internet Technologies from an institutional point of view.Production/Operations Management; automation; Internet; New Institutional Economics

Enabling and sustaining collaborative innovation

This paper extends the principles of open source software development to a non-industry-specific level by introducing the Open Source Innovation (OSI) model. OSI exhibits main differences to other related models and concepts such as the private-collective model, commons-based peer production, R&D networks and is therefore an innovation model in its own right. In order for OSI projects to be successful, numerous factors need to be fulfilled. We make the distinction between four categories of factors: economic, technical, legal, and social. In each category, we differentiate between enabling and sustaining factors. The enabling factors must be met at the beginning of the project, whereas the sustaining factors must be satisfied as the project progresses. --

Development of an Approach for Analyzing Supply Chain Complexity

Supply chains are faced with a rising complexity of products, structures, and processes. Because of the strong link between a supply chain’s complexity and its efficiency the supply chain complexity management becomes a major challenge of today’s business management. A two dimensional driver concept is introduced and explained to comprehend the major causes of a supply chains’ complexity. To map the effects of the drivers and to understand the different dimensions of complexity, a general complexity model is introduced. A supply chain complexity analysis approach is presented, to evaluate the initial situation and to provide the necessary information for deriving the right actions and strategies for the management of complexity within a supply chain.complexity; supply chain; variety; model

A Multi-Agent based Configuration Process for Mass Customization

Large product variety in mass customization involves a high internal complexity level inside a companyís operations, as well as a high external complexity level from a customerís perspective. In order to reach a competitive advantage through mass customization, it is necessary to cope with both problems. This is done within the scope of variety formation and variety steering tasks: Variety formation supports customers during the configuration task according to their preferences and knowledge, variety steering tasks internally deal with finding the customizerís optimal offer. Driven by this economic background, we present a comprehensive multi-agent based design for a configuration process in this paper. It is identified as a suitable solution approach integrating both perspectives. The mass customized products are assumed to be based on a modular architecture and each module variant is associated with an autonomous rational agent. Agents must compete with each other in order to join product variants which suit real customersí requirements. The negotiation process is based on a market mechanism supported by the target costing concept and a Dutch auction.Multi-agent systems; Configuration process; Market mechanism; Mass Customization

Enabling and Sustaining Collaborative Innovation

This paper extends the principles of open source software development to a non-industry-specific level by introducing the Open Source Innovation (OSI) model. OSI exhibits main differences to other related models and concepts such as the private-collective model, commons-based peer production, R&D networks and is therefore an innovation model in its own right. In order for OSI projects to be successful, numerous factors need to be fulfilled. We make the distinction between four categories of factors: economic, technical, legal, and social. In each category, we differentiate between enabling and sustaining factors. The enabling factors must be met at the beginning of the project, whereas the sustaining factors must be satisfied as the project progresses.OSI, open source innovation, R&D

Key Metrics System for Variety Steering in Mass Customization

The main goal of this paper is to provide a key metrics system for variety steering in mass customization. We distinguish between objective and subjective customer needs. The subjective needs are the individually realized and articulated requirements, whereas the objective needs are the real ones perceived by a fictive neutral perspective. We show that variety in mass customization has to be orientated on the objective needs. In order to help mass customizers better evaluate the degree to which they can fulfill the objective needs as well as their internal complexity level, we have developed a key metrics system model. We also present a conceptual application showing how to use this model to support decision making related to the introduction or reduction of product variants.Variety Management; Complexity; Production/Operations Management