Innovation in Manufacturing Strategies - Case Study Example

INNOVATION IN MANUFACTURING STRATEGIES: AEROSPACE CASE ANALYSIS Student’s Name Institutional Affiliation 1.0 Current Status of the Company From the information provided, it seems that the Aerospace Manufacturing Company is indeed facing lots of challenges in both its manufacturing and product engineering outsourcing processes. The company seems to be manufacturing components while still limited to the design process currently adopted by the product engineers in the United States of America. All is not lost though, it can still leverage on a number of capabilities it currently enjoys that would enhance its capacity to compete innovatively and ensure the survival of its immediate operations. At the present scenario; 1.1 Negative Attributes of Current Operations i) The company lacks the potential of conducting mass production processes that should enhance the capability to cut down on possible manufacturing costs, control of quality as well as shorten possible lead-time. It is important to note that the capability of a firm that relates to mass production is largely suited for enormous output volumes while at the same time ability to exercise low production varieties, which pushes costs down as can be witnessed within the cost per each of the unit generated (Ortloff et al, 2014). Taking a closer look at the activities of the firm that demonstrate the existence of mass production process; it can be seen that the company does not enjoy a high mechanisation process that would be helpful in accomplishing a higher volume production rate. Mass production is an activity that allows a company to devise an elaborate plan for material flows through the numerous stages of product manufacturing. In fact, for the case at hand, the product design stage is being conducted in the United States of America before being transferred to Midlands in Europe. Further to note is that the company exercise restrictive division of labour. This is related to the fact the entire production process adopts a line-production framework. A line production set up encompasses a machining system that is well-designed for purposes of production process a specific part type at relatively higher levels of volume and at lower costs (Ortloff et al, 2014). In this regard, the gear box is being designed for mass production processes at Midlands. Research indicates that a fairly-well production system design should seek to ensure that it accomplishes a low production cost; desirable levels of productivity rates; and efficient product-quality features. ii) Aerospace faces the need for increasing the immediate level of input from the overall manufacturing side into the overall product-engineering development cycle. Certainly, a different set of equipment and inspection allocation processes will definitely result to different machine processing time as well as defective part arrival rates. In this regard, the company can opt to conduct an intense sensitivity analysis for purposes of examining interrelations for different design candidates altogether. Studies in product development cycle indicate that possible fluctuations present in the course of manufacturing operations would possibly result from uncertain or rather inaccurate system functionalities. And as a result of this, it would likely lead to poor product quality. Thus, a robust and rapid production system design is needed for purposes of reducing possible defects in the manufacturing process (Olson & Bakke, 2004). iii) The company is facing a challenge related to its overall product engineering process being conducted in the USA while the European market has slightly different needs that are not well captured in the design process. This challenge can be easily sorted out and solved through adoption of a rigorous customer research and development process to find out the exact tastes and preferences of the European customers. To achieve a stronger market orientation of a company’s overall products, it is important that the resultant marketing tasks focus on the design of product engineering process. This would involve conducting a significant set of preliminary market assessments for purposes of determining the end-user immediate needs and wants and, build up innovations based on customer reaction and feedback in the course of product development. iv) Most of the company’s suppliers are situated in the United States of America, which has continued to cause lots of problems and deny the manufacturing company a lack of flexibility within its United Kingdom plant. The current position of the suppliers in the USA limits the company from engaging in a rapid analysis process of local suppliers that could easily provide similar raw materials. Aerospace can mitigate this challenge by way of ensuring that the suppliers are sourced from the local market and vetted to ascertain their capacities in availing quality components needed in the manufacturing process. 1.2 Positive Attributes of Current Operations i) On a positive note, the manufacturing company enjoys the capacity to utilise its skilled workforce to configure components that are later supplied for the generation of gearboxes that can easily be fitted to different engine models. This is a capability that would be far much aided using the mass production hence mass customisation exercise. In this regards, the company will certainly be able to cut down on cost and improve on its profitability aspect since the end products will now be able to reach a great number of customer-oriented markets within Europe. This is likely to be achieved through a robust adoption of system layout. In the production process, it is crucial to comprehend that system layout plays an important role in manufacturing flexibility; production complexity as well as immediate vigour. Manufacturing flexibility is the immediate capability to build numerous different set of products within a single system without any form of interruption in the overall production process due to product differences (Olson & Bakke, 2004). It is safe to note that the adoption of manufacturing flexibility by Aerospace will likely pave way for mass customisation as well as a high degree of manufacturing utilisation processes. To ensure effective mass production exercise that shorten a lead time, it will be important for Aerospace to engage sturdiness, which seeks to ensure the capability against possible process drift and fluctuations in the overall operation processes. ii) The current operations of the company adopts a CAD system that is deemed to be different from those used by OEM as these Original Equipment Manufacturer are making efforts to adopt electronic communication platform. The fact that the company adopts a CAD approach means that it has the capability to create products in their best design possible with little or no errors. Due to this, Aerospace enjoys immense product quality and control mechanisms. In addition to this, Computer Aided Design (CAD) will likely benefit the company in numerous ways that include; Increased productivity rates since the production process would now involve the automation of repeated tasks. Allows for immense changeability features given that it will ensure to keep record of previous design iterations. Provide a favourable and viable communication platform for different engineer teams, application software and thus, result to accurate quality of designs (Klibi, Martel, & Guitouni, 2010). The ability of OEM to shift to electronic communication should also be adopted by Aerospace as it will likely help to improve real-time communications. This will result to improved quality as these OEMs will have ample time expounding on specific product features that they would need for the European market. 2.0 Future Position of the Company In the next 12 months or so, the manufacturing company would like to accomplish a set of goals that include; Post improved productivity rates by at least 20% in the first two quarters and later 30% for the last two. Adopt efficient electronic communication platforms so that it can easily communicate with its underlying Original Equipment Manufacturers (OEM). Adopt an efficient supply chain mechanism that would ensure the ease with which the entity relates with its providers. Improve overall mass production by at least 15% within the 12 months of operations. Of particular interest to note, the company will also like to attract more than 10 Original Equipment Manufacturers for its gearboxes. This is especially since the manufacturing company can adopt efficient CAD systems useful for configuring the current components at its disposal. It should be emphasised that in order to achieve the set target, the company will likely face a significant set of marketing issues that include; i). Complex logistics involved with the availing of top notch gearboxes to the European markets and the OEM in particular. ii). Possible inappropriate sale price of the finished product to the European market. The sale price should be subjected to intense scrutiny to identify different pricing strategies for the product at hand. Considering the fact that the product exists in the market already, the company should opt to offer them to OEMs at a discounted rate in order to foster mass production rates. It is quite clear that when there is high demand of a product within any given market; the best possible way of improving sales is to adopt a premium pricing model. At fewer demand levels; discount rates are encouraged. The pricing of the gear boxes will also be determined by the immediate level of competitors’ actions since rivals might be offering the products at relatively cheaper rate (Reutterer, et al, 2006). iii). Another marketing factor that will likely affect the capability to adopt and implement an effective supply chain framework relates to inefficiency in the collection and speeding up the process of giving back feedbacks to numerous customer responses coming in from different quotas. iv). Ability to come up with efficient warranties will determine the efficiency of post-sale marketing support phase. Warranties define the overall expected performance of a product as well as the form of redress that is available to the purchaser in the event that there is likelihood of it being unsatisfactory. In Aerospace scenario, the manufacturer is expected to conduct repairs or even go ahead to replace the gearboxes that would not be performing (Reutterer, et al, 2006). v). There also lies the fact that the economy of the European market in general might affect the level of production of these gearboxes. It is argued that the gross domestic product of a given country would determine the level of budget formulated for purposes of improving product quality through research and development support as well as the purchasing power of the immediate end users (Reutterer, et al, 2006). An economy with a low-level of gross domestic product will likely face intense challenges in devising newer ways associated with advanced production processes as well as ability to sustain a viable and reliable supply chain mechanism for future operations (Reutterer, et al, 2006). 3.0 Proposal of a New Innovative Strategy for Aerospace For this case scenario, a segmentation innovative strategy as well as a formulation of a new department for the development and maintenance of a workable supply chain design is proposed. A segmentation strategy is necessary since the current product-engineering, which is being executed in the United States of America, does not result to customer satisfaction within the European market. Over a long period of time now, marketers have come to realise that the target audience of specific products will not all be homogenous in nature. Targeted audiences will always differ in how they perceive products from such important features as their demographics, attitudes, locations and needs (Reutterer, et al, 2006). Following this line of reasoning, it is evidently clear that segmentation and targeting of potential customers would definitely allow Aerospace the opportunity to avail gearboxes within the European target audience needs and wants and, also in regards to their specific location out of the US. Most notably, it is expected that companies engage in establishing the immediate needs and values of its targeted customers within a given market segment for purposes of easing the opportunity to promote their products; brands and services effectively. The capacity to understand a given target audience and thus, making marketing process more effective goes forward to put the customer’s needs first, a facet that will result to more satisfied customers whose final outcome would be gaining a greater level of competitive advantage over companies that manufacture a similar product; both locally and within the international market as a whole. In this case scenario, segmentation strategy for Aerospace should focus on a clustered preference model. This model unfolds on the very many preferences and needs as demanded by customers. It is important to remember that Aerospace currently enjoys the technical know-how as well as the possession of sophisticated equipment that could be effectively used for the purpose of configuring and therefore, production of gearboxes that can fit well with different engine models. To be specific, Aerospace should adopt a geographic segmentation innovative strategy, which bases both potential and existing customers on geographical areas of the United States of America. This will help in serving the local domestic market where product engineering is executed, as well as produce gearbox designs for the home market in Europe. Aerospace notion of segmenting the gearboxes in accordance with the two geographic locations are based on the fact that they both have different customer purchasing behaviours. For this reason, the manufacturer should focus on extended customisation processes in regard to its products development; advertising strategies as well as sales efforts that clearly match with the needs of the particular geographic location. To emphasize on this demographic segmentation strategy, the manufacturer can also incorporate psychographic segmentation especially since the designs of these gearboxes are greatly defined by the attitudes, and interests of the entire Europe-based customer. It is further recommended that Aerospace comes up with an additional department that would focus on operating a successful supply chain. An effective supply chain is necessary for the manufacturer would help to evaluate the different components of the gearbox that are currently being supplied by numerous providers (Klibi, Martel, & Guitouni, 2010). The supply department would focus on formulating efficient decisions that would include; differentiating between reliable and cost-effective providers as well as their immediate supply policies in relation to the firm. The supply department will further ensure to make effective decisions in regards to these suppliers for purposes of minimising possible total supply chain costs (Klibi, Martel, & Guitouni, 2010). Once these suppliers are selected, it is ascertained that they will be managed through a myriad of activities of numerous production functions within the company that would revolve around quality and logistics. References List Klibi W, Martel A, & Guitouni A 2010. The design of robust value-creating supply chain Networks: a critical review. European Journal of Operational Research, vol. 203, no.2, pp. 283–293 Ortloff, D, et al. 2014. Chapter 2: Introduction to Product Engineering; MEMS Product Engineering. Springer-Verlag Wien. Olson, E.L. & Bakke, G. 2004. A comparison of new product development practices in North America and Norway. Telektronikk vol.100, no.2, pp. 120–125 Reutterer, T., Mild, A., Natter, M.&Taudes, A.2006 A dynamic segmentation approach for targeting and customizing direct marketing campaigns, Journal of Interactive Marketing, vol. 20, no. 3/4,pp. 43–52 Read More