Operations Management - Essay Example

Draft Operations Management s Submitted by s: What is it meant by “build to order” and how does it differ from more traditional approaches to the car business?  Build to order is a production method where the building of products does not take place until an order that confirms they should be build is received and it is the oldest style that is associated with order fulfillment. It is the most suitable method that is utilized for products that have a high level of customization while being produced in low volumes. A product that is built to order is uniquely made for a specific customer according to the specifications that the customer requests. The product will usually be above the standard specifications and are made to meet the requirements and preferences that are specified by a particular person, an organization or a business. This only happens as soon as the customer places an order and that order is received and this kind of production is mainly seen the products that are highly configured such as cars as well as computer servers and also in the industries whose inventory is expensive such as the aircraft industry. In this particular type of approach, there has to exist an integrative connection that exists between the buyer and the manufacturer and the moment that all the requirements of the customer are received, the production will begin the task of meeting the particular quantities as well as the lead times. Since this approach is guided by a scheduled production, the activities that are associated with it have to be very consistent and the entire supply chain has to be closely knitted since any disruptions will result in delays that will affect the delivery of the final product. Comparisons between the traditional approach and the build to order model In the traditional approach the manufacturers concern themselves with the stable production schedule that has a decisive demand but when the build-to-order is considered the customer is at the centre of the entire process making the supply chain become characteristically elastic. Consequently, in the build-to-order model, the unique specifics are founded on the preferences that the customer stated on their demand while in the traditional model; the focus is mainly in the consolidation as well as the bulk approach to production. While the customer is a very significant part of the build to order model, the traditional model is more concerned with the demands that come from the dealers and the retailers whilst managing the uncertainty by making sure that there is a buffer in terms of stock of the goods that have already been manufactured. The build-to-order model deals with this through an information management system that addresses the uncertainty by making sure that they have components as a buffer. There exists a significant difference between the traditional approach and the build-to-order approach in the degree of flexibility as well as sensitivity that is associated with them where a long term relationship with the dealers, the suppliers customers as well as retailers are a significant factor in the traditional approach. This makes the traditional approach a push system that is contrary to the build-to-order model, which is a pull system where the material are actually pulled through the chain depending on the orders that the customers place. The build-to-order is an international endeavor to a particular degree and this means that it needs a different management approach when compared to the traditional approach, which is of a more local nature. 2. To what extent is the Product Life Cycle framework useful to explain the emergence of “build to order” manufacturing?  Manufacturing that uses the build-to-order approach has always been restricted to the products that have long delivery dates and those with relatively low requirement such as the industrial equipment. This has considerably changed in the past few years and the approach is being used in the manufacture of products that have a short delivery date while having higher requirements like electronic products. This has made it necessary to make an accurate prediction of the requirements so that inventories can be reduced while making sure that the delivery dates are short. The international nature that is evident in the markets as well as competition has made many of the companies that operate globally to make reviews to their operations strategy and the companies are thus moving from the centralized operations to the decentralized ones so that they can benefit from the accessible resources while being closer to the markets. The organizations have also made several changes in the approaches, techniques and operations they employ with the goal of meeting the evolving requirements associated with the market. Companies therefore have to be in competition on the basis of more than one competitive performance goals that include quality, cost, receptiveness, suppleness as well as reliability. Mass customization has therefore developed to be a key goal as in many of the companies and the organizations are developing the build-to-order supply chain so that it can be flexible and responsive. To accomplish mass customization, the build-to-order model has to be actively implemented in a variety of industries, company like BMW allows the customers to make changes to the vehicles that they want within six days of the final assembly and this includes an entire change in the colour of the car. This enables the company for example, to build more than half a million permutations of the Z3 since they can be tweaked to the customer’s specifications in the event that he or she wants adjustments. As a result of the escalating international competition as well as a decline in the profit margins, most of the companies that have global operations are pursuing various operations tactics so that they can be able to secure market share while making sure that they are improving profits. In particular, the build-to-order approach markets that are driven by customization of a mass nature as well as e-commerce are making the manufacturers and retailers to reduce the planning cycles, shorten the manufacturing lead times while speeding up the distribution process. The build-to-order as a technique can be described as the value chain that makes sure that there is quality in the products and services depending on the requirements that an individual has as prices that are competitive in the shortest time possible . This is mainly achieved through leveraging the central competencies that are associated with the partnering manufacturing companies as well as suppliers and information technologies that might include the internet to incorporate this kind of value chain. The build-to-order model generates a certain degree of receptiveness; the cost efficiency as well as flexibility, which will allow the company to deliver the products that, the customers chose when they are making their request. This makes sure that there is a reduction in the dependence on predictions, inventory, batches as well as working capital while resulting in significant cost benefits through the exclusion of inventory and the setup that is needed to make customization of the products and services. Therefore, the model enables the manufacturers to respond on time with the markets and also mould the behavior that is associated with the market and this requires instantaneous information flow as well as responsiveness among the partners so that the whole system can be optimized. 3. What does “build to order” entail in terms of process design?  The product designs that are in existence may not be suited for unstructured build-to-order or mass customization since there may be too many varying products and therefore a lot of parts that are supposed to be distributed to all the points of use. Even when a group of products is considered, there may be unnecessary and crippling production of parts as well as materials making the parts that are specified difficult to procure quickly. The products as well as the process design may also have too many steps and this means that quality cannot be designed into the process consequently resulting in disruptions in event that the failed components are looped back to be considered for correction. To achieve success at the process design that is associated with the unstructured build-to-order, the teams that are tasked with product development must be in a position to plan proactive product portfolios that are compatible with the unstructured build-to-order processes. They are also supposed to design products using a synergistic product platform while designing around standardized parts as well as raw material, which will ensure that the parts that were specified are rapidly available. They should make sure they make a consolidation of the parts that are inflexible into parts that are versatile and standardized and assuring that there is quality by designing in terms of the concurrent process control. Further, the process design needs to eradicate setup by design by design through making a specification of the common tools, the design of versatile fixtures that exist at each of the workstations that eradicate setup to make a location of parts or change fixtures. It also supposed to ensure that the part count does not go beyond the available tool capacity or space that is required at each particular workstation. The product and process design are also supposed to be designed in a manner that will maximize the use of the available tools without necessarily needing expensive and prolonged setups that might lead to delays. The process design that is associated with the build-to-order model also depends on flow manufacturing to achieve an efficient lot-size-of-one production and this aspect is very important as far as e-commerce is concerned since each piece may differ from the other or be customized in a different way. This particular kind of manufacturing is arrived at by getting rid of all the setup and the inventory with a single piece low then making an arrangement for the spontaneous delivery of parts as well as material that will be delivered to all the points where they are needed without any delays. To achieve this, the suppliers will have to be certified so that they can guarantee quality at the source. A different aspect that is associated with the flow manufacturing as far as process design is concerned is the dedicated cell which may have an arrangement that will generate any variation within a product family without necessarily going through a setup. Read More