Coordinated Product and SC Design. Slides3

Slides3

What are the two distinct chains in organizations

Supply chain and development chain

What does the supply chain focus on?

The flow of physical products from suppliers through manufacturers and distributors to retailers and customers

What does the development chain focus on?

Focuses on new product introduction and involves product architecture, make or buy decisions, and design processes.

Characteristics of supply chain

Predictability, product variability, economies of scale, lead time

The characteristics of efficient supply chain (top to bottom)

constant,

long,

low

longer lead time,

long term

make-to-stock

low

FG

low cost, constant quality, on-time delivery

The characteristics of responsive supply chain (top to bottom)

Fluctuates based on customer orders

short

high

short

according to product life cycle

make to order, assemble-to-order

high

parts, components, subassembly

flexibility, fast delivery , high performance design

Characteristics of development chain

Technology clock speed make/buy decisions, product structure

Functional products

satisfy basic needs, static over time, stable demands, long life cycles

Innovative products

Offer higher profit margins, unpredictable demands, short life cycles

General characteristics of functional products

Slow, predictable with low product variablity

General characteristics of innovative products

Fast unpredictable, based on availibility

Metrics of functional and innivative product characteristics

Look at chart

Products in the SC

I Cell phones

II Laptops

III Pasta

IV Furniture

Efficient Supply chains

Functional stable SCs that aim at creating the highest cost efficiencies.

How are efficient supply chains maintained

pursuing scale economies, optimization techniques, information linkages.

Responsive supply chains

Works for stable, innovative products. Aimed at flexibility to changing customer demands.

How is a responsive supply chain maintained

build to order and mass customization

Risk-Hedging supply chain

Used for evolving functional products. Aimed at pooling and sharing resources to reduce risk.

How is a risk hedging supply chain maintained

Multiple supply sources, increased saftey stock with inventory pooling.

Agile supply chains

Used for innovative evolving products. Aimed at responding flexibly to customer needs, while hedging risk with inventory pooling.

How are agile supply chains maintained

Responsiveness to unpredictable demand and minimizing supply disruptions.

Modular product

a product assembled from different modules, with different options for each module.

Modular process

Each product goes through discrete set of operations, semi finished products stored at intermediate stages

Proccess standardization

Making a generic product and differentiating as late as possible (postponement). Used when product is modular and process is modular

Re-sequencing

Modifying the order of product manufacturing steps

Delayed differentiation

A strategy that keeps products standard until modification is required.

Postponement benefits

Less inventory, logistics costs, production lead time; better forecast,

costs of postponement

new process development, increasing manufacturing cost and order lead time.

Downward substitution definition and benefit

Substitute higher-feature products for lower-feature products. Allows for flexibility and reduces overall stock.

Part standardization and modular relationship

Maximizing component commanility across products. Used for modular products with non-modular processes.

Product standardization and modular relationship

Carrying a limited number of products in inventory. Used when product is non modular and process is non modular.

Procurement standardization

Leveraging equipment and part commonality across products. Used when product is non-modular and the process is modular

Mass customization principales

1. Modular product design

2. Modular process design

3. Agile supply network

Product modularity design principles

Commonality and postponement of modules

Process modularity design principles

Re-sequencing

Re-sequencing of processes, postponement of processes, process standardization

Agile network design

postponement of modules and processes. Decoupling points by inventory stocking

Four pillars of mass customization

Instantaneous, costless, seamless, frictionless.

Different customization strategies

look at picture