Considering stochastic lead times in a manufacturing/remanufacturing system with deterministic demands and returns

In this paper we study a manufacturing/remanufacturing system with stochastic lead times and a constant demand. We base our approach on previous research in which we have developed models to describe an inventory system with stochastic lead times. In this paper, we first adopt this method to manufacturing/remanufacturing situations, where there are essentially two supply sources for replenishing serviceable inventory. We then provide a solution procedure when a cycle ordering policy is used. Secondly, we investigate the possibility to use a dual sourcing ordering policy in which each order is split between a manufacturing and a remanufacturing process. Finally, we compare the two ordering policies and illustrate how the lead-time patterns influence the economic consequences.     

The manufacturing/design interface

The paper explains why the traditional relationship between design and manufacturing needs to be changed and what it should be replaced with. Traditionally, the relationship has been sequential. At the beginning of the innovation process design goes ahead alone, manufacturing's input being largely overlooked. Only after the design has been completed does manufacturing take over responsibility, and only then may it emerge that re-design is necessary to make production feasible. The results can be high costs, late delivery and disappointing performance. The changes that have made this practice less supportable include shortened product lifecycles, Japanese competition, customers becoming increasingly quality-conscious, need to deliver exactly on time, and minimization of inventories. Fortunately, new technologies such as CAD/CAM and FMS have come along that can help to rectify these deficiencies; how far they are taken up and effectively used depends on the sharp distinction between the functions being discarded and replaced by their substantial integration. Possibilities that each enterprise could explore include ensuring continuous communication and cooperation between the functions, joint problem solving, replacement of functional management by project management, supplier involvement, elimination of the status differential between design and manufacturing, design for manufacturability, and better understanding by the design function of the realities of the business world. The author warns that integration may not be a universal cure. In particular, he suggests that the innovations closely linked with scientific advances may need some degree of functional differentiation. Changes in the competitive environment require manufacturing organizations to change their view on the relationship between manufacturing and design, and on the way the interface between these two functions has to be managed. In this paper we will first describe the traditional view. Afterwards we will describe the environmental changes that make us question the effectiveness of this view. Finally in a third part we will describe the characteristics of the new approach.     

"Managing" Learning by Doing: An Empirical Study in Semiconductor Manufacturing

This article examines the contributions of human resource and organizational practices to the development and supply chain management interface. It addresses this issue in the context of the semiconductor industry by highlighting the importance of these practices for learning‐based improvement in manufacturing. One of the most important factors for competitiveness in the semiconductor industry is the ability to manufacture new process technologies with high yields and low cycle times. The more effective management of new process technologies within the manufacturing facility aids firms in managing production costs, volumes, and inventories. Efficient management of new process development and introduction translates into enhanced internal supply chain management performance by improving the design of internal workflows, manufacturing performance, and the acquisition and installation of new manufacturing processes. Because much of the knowledge that underpins semiconductor manufacturing is idiosyncratic, however, firm‐level differences in human resource and organizational practices are likely to have consequences for performance. The article derives learning curve models of the rate of improvement in manufacturing yield (i.e., the rate of learning) and cycle time (i.e., the speed of production) following the introduction of a new process technology in a manufacturing facility. It then tests the influence of the use by semiconductor manufacturers of teams for problem solving and intrafirm knowledge transfer, the level of internal adoption of information technology (IT), and more extensive and effective workflow and production scheduling systems on manufacturing performance. It finds that the manners in which semiconductor manufacturers allocate engineering resources to problem‐solving activities, utilize information technology in the manufacturing facility, schedule production, and control the “shop floor” influence the levels and rates of improvement in both manufacturing performance measures. The article makes several contributions to the literature on product and process development and, accordingly, to research on the product development/supply chain interface. In particular, the model of organizational‐based learning provides a better understanding of the determinants of learning‐based performance improvement. In particular, better manufacturing performance results not strictly from greater cumulative volume but also from the actions of managers that affect the organization of establishment‐level problem‐solving activities and information exchange. The article also demonstrates that human resource and organizational practices in both the development and the adoption of new process technologies improve manufacturing performance by accelerating new product introduction, improving workflow, and enhancing the efficiency of manufacturing processes.     

VRP revisited: The impact of behavioural costs in balancing standardisation and variety

The objective of this paper is to bring a new element to the academic (and industrial) debate concerning the optimum level of variety in component design in mass production companies. Many authors have explored the trade-off between functional and variety costs, and this could be considered as a well-acknowledged management issue, at least from an engineering perspective. Nevertheless, while defining the theoretically optimal level of component variety, there are other elements, more related to operators’ attitude or to operative conditions, which may intervene and prevent effective exploitation of the existing variety. These elements have been given scant attention in literature, while they may play a relevant role in real organisations.In this paper, we will present a case study and an analytic model for these “behavioural costs” in manufacturing environments, so as to show how the theoretically optimal amount of variety changes if one takes into account these aspects. Researchers (and practitioners) might leverage on this contribution in order to rejuvenate the Variety Reduction paradigm, and to increase their awareness in designing and managing mass production manufacturing processes.     

Multiple part-type scheduling in flexible robotic cells

This paper considers the scheduling problem arising in two-machine manufacturing cells which repeatedly produce a set of multiple part-types, and where transportation of the parts between the machines is performed by a robot. The cycle time of the cell depends on the robot move sequence as well as the processing times of the parts on the machines. For highly flexible CNC machines, the processing times can be adjusted. To this end, this study tries to find the robot move sequence as well as the processing times of the parts on each machine that jointly minimize the cycle time. The problem of determining the best cycle in a 2-machine cell is first modeled as a traveling salesman problem. Then, an efficient 2-stage heuristic algorithm is constructed and compared with the most common heuristic approach of longest processing time (LPT).     

Determinants of integrated product development diffusion

Integrated product development (IPD) is an approach for developing new products focused on the early and active involvement of design, manufacturing, marketing and other key new product development (NPD) stakeholders in order to achieve cross-functional integration and concurrent execution of various NPD activities. The benefits of IPD are well known in both the academic literature and popular press, including significant reductions in NPD cycle time and costs. However, in spite of these benefits, for the majority of manufacturing organizations, IPD is not used on 100% of NPD projects. This research develops a model of the organizational contextual factors influencing the diffusion of IPD in organizations. Results of surveying 269 NPD managers indicate that the complexity of certain IPD practices and support for IPD directly influence IPD diffusion, while an innovative organizational climate and the complexity of the organization's NPD activities indirectly influence IPD diffusion through IPD support.     

Competent Production Supervisors

While the manufacturing sector is vanishing in most European and North American regions, northeast Italian firms have successfully contrasted global competition thanks to superior manufacturing capabilities grounded, among other things, on people's competencies. Applying nonparametric statistical analysis on data from 212 behavioral event and 44 repertory grid interviews, the research presented in this note investigates the nature of these competencies for production supervisors in northeast Italian firms. We identify four threshold and nine distinctive competencies and offer insights on the relationship between these competencies and northeast Italian firms’ manufacturing capability. We also suggest how to use competency tools to design skill development policies in industrial clusters and implement effective human resource management practices in small and medium‐sized enterprises.     

Flexibility of manufacturing systems,strategic change and performance

The past decade has witnessed an increase of interest in flexibility, which bestows on a firm the ability to respond promptly to market opportunities and changing technologies. The development of capabilities to be flexible rests on the mandate of top management, helps firms manage environmental uncertainty, and tends to enhance firm performance. This research paper aims to establish an analytical approximation that considers how the determinants of manufacturing flexibility at the system level affect the desired strategic change in organizations, as well as subsequent performance. We propose the hypotheses that both environmental factors and internal resources affect flexibility, this latter aspect influencing the organization's performance. The problems that stem from measuring manufacturing flexibility in terms of fit were also analyzed. In order to do this, we have made a wide-ranging trans-national study, within the framework of the European Union, using data from 403 European firms. The Structural Equation Model (SEM) technique has been used to contrast the hypotheses. The results show that manufacturing flexibility at system level can be a critical factor in the process of strategic change, which means that it can have an impact on the desirability of strategic change or on the more specific strategic fit.     

Interorganizational Collaboration and Innovation: Toward a Portfolio Approach*

In the literature on innovation, interorganizational collaboration has been advanced as beneficial for the innovative performance of firms. At the same time, large‐scale empirical evidence for such a relationship is scarce. This article examines whether evidence can be found for the idea that interorganizational collaboration supports the effectiveness of innovation strategies. This article empirically addresses this research question by analyzing data on Belgian manufacturing firms (n=221) collected in the Community Innovation Survey, a biannual survey organized by Eurostat and the European Commission aimed at obtaining insights into the innovation practices and performance of companies within the various European Union (EU) member states. Tobit analyses reveal a positive relationship between interorganizational collaboration and innovative performance. At the same time, the impact on innovative performance differs depending on the nature of the partner(s) involved. These findings strongly suggest the relevance of adopting a portfolio approach to interorganizational collaboration within the context of innovation strategies.     

Disaggregation and consolidation of imperfect quality shipments in an extended EPQ model

We consider a standard economic production quantity (EPQ) model. Due to manufacturing variability, a fraction P of the produced inventory will have imperfect quality, where P is a random variable with a known distribution. We consider a 100% inspection policy and further assume that the inspection rate is larger than that of production. Thus, all imperfect quality items will be detected by the end of the production cycle. For such an augmented EPQ model, we first derive the new optimal production quantity assuming that the imperfect quality items are salvaged once at the end of every production cycle. Then, we extend this base model to allow for disaggregating the shipments of imperfect quality items during a single production run. Finally, we consider aggregating (or consolidating) the shipments of imperfect items over multiple production runs. Under both scenarios we derive closed-form expressions for both the economic production quantity and the batching policy, and show that our desegregation/consolidation schemes can lead to significant cost savings over the base model.     

Flexibility and Standardization: Test of a Contingency Model of Product Design–Manufacturing Integration

This article proposes and tests a contingency model of system integration of product design and manufacturing among producers of goods involving tooling development. The model predicts which combinations of organizational and technical practices will be most effective under conditions of high and low design newness. The results, based on data from 74 firms, largely support the model. Differentiating mechanisms, such as a tall hierarchy and job specialization, are negatively associated with design–manufacturing integration, particularly for new designs. Socio-integrative mechanisms, including such flexible practices as cross-functional teaming and collocation, are positively related to design–manufacturing integration for new designs only. However, the use of in-process design controls is positively related to design–manufacturing integration regardless of design newness, which suggests that some modes of standardization may be beneficial even for new designs.     

Early Settlement in European Merger Control

We analyse the determinants of early settlement between merging parties and the European Commission over remedies that remove concerns of anticompetitive effects. This extends the previously narrow range of econometric literature on early settlement. Consistent with the theory of early settlement, our results confirm the importance of delay costs and of uncertainty, measured by the complexity of the economic analysis required for each merger. We also find a non‐monotonic effect of agency resourcing, which raises questions about the Commission's efficiency in times of high case load. Econometrically, we select a sample of merger decisions in which the European Commission intervened due to concerns of anticompetitive effects, and our selection model provides estimates of the factors determining intervention by the Commission. Conclusions are drawn for public policy.     

A simulation-based evaluation of the cost of cycle time reduction in Agere Systems wafer fabrication facility—a case study

With the vast amount of capital invested in the semiconductor industry and the high level of competitiveness, semiconductor manufacturers are continuously searching for new methods to gain more market share and increase their profits. New technologies are continuously in demand, and are pushing the semiconductor manufacturers to seek better market position through constant improvement in their processes and products.Agere Systems is one of the leading companies in the microelectronics industry. This paper presents a comprehensive framework for strategic capacity expansion of production equipment at Agere Systems wafer fabrication facility (fab). We integrate simulation modeling, design of experiments, statistical analysis, and economic justification tools to aid in this highly complex decision-making process. We compliment the framework with a particular implementation. The procedure involved studying the factors in the fab that significantly impact the cycle times of the four main technologies that are currently in process and will stay in demand for at least the next few years. Moreover, the goal was to quantify the economic impact of reducing cycle times.To accomplish the objectives of this research, a valid simulation model of the production line of the fab was built. The production equipment (tool sets) that significantly influence production cycle time were identified through factor screening experiments. Based on these factors, several scenarios involving the acquisition of additional tools, aimed at cutting down cycle times, were identified and the operating characteristics curves were constructed. These characteristics curves were used to relate cycle time to production volume capabilities. Finally, an economic analysis was conducted to evaluate the return on investment in additional tools.The outcome of the case study was the identification of bottleneck facilities in the fab that have a significant impact on the cycle time of the four technologies. In the economic analysis, the cost of adding machines to these facilities was compared with the benefits resulting from the increase in production capacities.     

Industrial exploitation of new joining technologies

Joining technology is critical to manufacturing and fabrication industries, since it greatly influences the design, assembly and ultimate competitiveness of the product. In particular, adhesive bonding is now attracting strong interest from many industries. This trend is further strengthened by dramatic advances in new materials, many of which cannot be joined by conventional means.
However, most industries are failing to exploit the opportunities offered by current adhesive technology, for a variety of reasons. CEST (the Centre for Exploitation of Science and Technology) has undertaken to examine these reasons, and to initiate a programme of actions which will lead to wider acceptance of adhesive joining within industry.
We have selected a number of companies from a range of industries, which we believe can effectively drive the exploitation process. By working closely with these companies it has been possible to define a number of strategic projects, which will promote this exploitation process. Several projects consist of targeted research and development, to fill the 'missing links' of technology which have impeded exploitation to date.
These coordinated actions will be initiated from the end of 1989. Typically, these projects will be collaborative, involving both industrial and university or polytechnic partners. The scopes of a number of such projects are described in detail, and their potential impacts on manufacturing processes are explained.     

Value creation in the relationship life cycle: A quasi-longitudinal analysis

Among the growing literature on value creation in collaborative buyer-seller relationships, most researchers examine relationship value at a single point in time. In the present research, we explore whether different stages of the relationship life cycle moderate the relative importance of value-creating dimensions. To shed light on the dynamic nature of value in B2B relationships, we present the results of a survey among purchasing managers using a quasi-longitudinal research design. Our findings confirm the moderating role of the relationship life cycle in value creation. More precisely, our results indicate that a key supplier's potential for value creation in customer's operations increases in relative importance as relationships move through the life cycle. In turn, supplier's capabilities to create superior value at the level of the customer's sourcing process display a decreasing role over the life cycle of a business relationship. No significant link was found in the present study between value creation through a supplier's core offering and different stages of a buyer-seller relationship.     

Do technology and manufacturing strategy links enhance operational performance? Empirical research in the auto supplier sector

Although much of the literature on manufacturing strategy (MS) and technology studies the implementation and impact of these manufacturing programs in isolation, this paper goes further by assessing the joint implementation and effect of these two manufacturing programs on performance, even when some contextual factors are present. Thus, this paper investigates how plants from the auto supplier sector make use of some operations practices from manufacturing strategy (MS) and from both product and process technology, by testing the effectiveness of both sets of practices, with the ultimate goal of enhancing operational performance. The results suggest that there are only very minor differences between high and standard performers on the aggregated level for technology practices, which may be the reason why technology does not result in significant performance differences between the two plant types. On the other hand, on the aggregated levels, there are somewhat greater differences for MS practices than for technology in both plant types, leading to larger differences in performance. While this study provides a foundation for examining MS, technology and context within a single framework, it is only through further research that a full understanding of the relationship between them will be obtained.     

The evolution of a cellular manufacturing system – a longitudinal case study

This paper describes the evolution of a cellular manufacturing system in a medium-sized company over a 13-year period. The objective of this paper is to analyze the arguments that gave rise to the nearly continuous readjustment of the design of the cellular manufacturing system of this company and the direction in which these adjustments took place. The study indicates that two interrelated factors played an important role in the decision to change the system: the market and manufacturing technology. Analysis of these factors offers important insights into the aspects that need to be taken into account in cell formation. It is argued that a cellular system should reflect market characteristics. New technology, furthermore, demands specialized cells, producing in a multi-shift situation. These two developments point in the direction of market-oriented, reasonably sized, functionally organized manufacturing units. It is argued that market developments, new manufacturing technology and modern production control systems will probably constrain the application area of cellular manufacturing.     

Architectures,methods and tools for enterprise engineering

In today's highly competitive global economy, the demand for high-quality products manufactured at low costs with shorter cycle times has forced a number of manufacturing industries to consider various new product design, manufacturing, and management strategies. Recently, due to the rapid advances in Information Technology (IT), new paradigms have successively emerged such as CIM, JIT, lean manufacturing, concurrent engineering, business process engineering and more enterprise engineering (EE). Enterprise modeling is currently in use either as a technique to represent and understand the structure and behavior of the enterprise, or as a technique to analyze business processes, and in many cases as support technique for business process reengineering. However, architectures and methods for EE have also to cover the integration of quality, information system, cost, human and organizational aspects and have to support the EE process from goal and requirements definition up to implementation and operation (Vernadat, 1999. Proceedings of CARS&FOF 99 Conference, Aquas de Lindoia, Brazil).This paper provides an overview of architectures, methods and tools for EE. It then points out substantial results achieved so far as well as presents a methodology and a related tool in more detail, which supports all phases and aspects of EE.     

Export experience counts: exploring its effect on product design change

In this paper, we explore how managers' export experience can affect the change in product design following changes in perceived past performance. Using data from 519 Portuguese exporters, we find that performance improvement will encourage safe decision making in which firms either will not change the product design or will change it in a way that makes it more similar across the product range. However, when managers' export experience is greater, they encourage change in ways that could support product differentiation. The abilities of experienced managers to read the market, i.e. to interpret changes in performance and translate them into product specifications, help explain these findings. We contribute to the literature in two ways. First, we explore the relationship among past export performance change, product design, and managers' export experience. Second, we identify specific kinds of design changes that firms adopt in response to changes in different dimensions of organizational performance. Based on our findings, we would recommend to new product development managers to consider both managers' export experience and the dimension used to measure performance when evaluating calls for standardizing the design by export managers. Our findings suggest that such calls could be driven by short‐term gains in export performance. Furthermore, we would also emphasize the need to routinely capture information from experienced export managers to ensure that it is considered in future decisions about design changes.     

Product and Process Modularity's Effects on Manufacturing Agility and Firm Growth Performance

Modularity in product design has been hailed as a way to speed new product development (NPD), to reduce NPD cost, and to enhance customization possibilities for consumers. Modularity in process design may speed new product manufacturing setup times, reduce costs, and enhance the profitability of the lower volumes that customization often entails. However, empirical evidence is scarce that either product or process modularity—individually, jointly, or sequentially—actually produce these or other proposed benefits (e.g., performance growth). This study builds on general modular systems theory (GMST) by examining the theoretical relationship between product and process modularity and the effects of each on firm growth performance. Using structural equation modeling, partial versus complete mediation by manufacturing agility is also scrutinized. In one pair of models, product modularity and process modularity are separate direct antecedents to manufacturing agility, which is modeled to affect firm growth performance; in a second pair of models, product and process modularity are related antecedents to manufacturing agility, with product modularity preceding process modularity. Results from the best‐fitting model show that product modularity directly and positively affects process modularity, manufacturing agility, and firm growth performance. Process modularity was unrelated to manufacturing agility, and neither process modularity nor manufacturing agility predicted growth performance. Consistent with GMST, the study provides empirical evidence of the power of one element of a modular system to orchestrate a fit between a firm's product and manufacturing strategies and to directly drive system performance. Thus, modularity in product design is revealed as the key to understanding GMST effects concerning how changes in one system generate changes in other systems.