OM 104

Manufacturing 
Perspectives,    
        Strategy and 
Contemporary 
Developments 

Ann Charyl M. Gallo, RN MBA

Manufacturing perspectives and process
- Focus on the numerous tradeoffs that must be made in alternative
manufacturing strategies with several contemporary developments in
manufacturing that are driving new strategic capabilities wherein the
primary concern is the logistical implications.

Quality Imperative
- The focus in supply chain logistics on ensuring products are delivered on
time, damage-free, and with all the service attributes necessary to meet
customer requirements. It deals with manufacturing processes, critical
issues of product quality.
(8) Dimensions of Product Quality

1. Performance – most obvious aspect of quality from customer’s

viewpoint, how well the product actually performs in comparison
to how it was designed to perform.
2. Reliability – refers to the likelihood that a product will perform
throughout its expected life. Concerned with the number of
breakdowns or repairs that a customer experiences after purchase.
3. Durability – refers to the actual life expectancy of a product.
4. Conformance – refers to whether a firm’s products actually meet the
precise descriptions or specifications as designed. Frequently,
measured by looking at an organization’s scrap, rework, or rate of
defects.
5. Features – where customers frequently judge quality of specific products
on the basis of the number of functions or tasks that they perform
independent of reliability or durability.
6. Aesthetics – refers to the style, materials and visual appeal of a
products, is used by many consumers to judge quality.
7. Serviceability – refers to the ease of fixing or repairing a product that
fails, is an important aspect of quality for some customers. In the
absence of such serviceability, customers generally consider those
items or brands that can be repaired quickest at the least cost to have
superior quality.
8. Perceived Quality – based on customer’s experience before, during, and
after they purchased a product. Total product quality is a combination
of the 8 dimensions, how they blended by an organization, and how
that blend is perceived by the customer.
Total Quality Management (TQM)
- Philosophy supported by managerial system focused on meeting
customer expectations with respect to all needs, from all departments or
functions of an organization, whether the customer is internal or external,
a supply chain partner or a consumer.
Basic conceptual elements in TQM tools and methodologies:
1. Top management commitment and support
2. Maintaining a customer focus in product, service, and process
performance
3. Integrated operations within and between organization
4. Commitment to continuous improvement
Quality Standards
- The set of standards has emerged from the International Organization for
Standardization (ISO) and has gained worldwide acceptance. The
standards provide basic definitions for quality assurance and quality
management.
Manufacturing Perspectives
- The combination of capabilities and competencies that are exhibited by a
manufacturing firm ; the combination of products, services, capabilities and
competencies represents a firm’s value proposition and provides dimension
to supply chain opportunities; manufacturing competency is based on
brand power, volume, constraints and leadtime requirements.
Brand power – the measure of a customer’s purchase preference
based on a manufacturer’s reputation, product quality,
and supply chain capabilities.
Volume – manufacturing processes can be classified in terms of the
relationship of cost per unit to volume of output. The traditional
perspective is to treat volume in terms of the well-established
“principle of economy of scale.”
– defines a relationship wherein the average cost or producing a product
declines as its manufacturing volume increases.
Variety – the range of product variations that are capable of being
manufactured by using given process. As contrasted to economy of
scale, manufacturing processes that can rapidly switch production from

one product to another while retaining efficiency are referred to as

having “economy of scope.”
- means that manufacturing process can use varied combinations of
overhead support, materials, equipment, and labor to produce a variety of
different products.
Constraints – drives compromise regarding ideal manufacturing operations
where such compromise planned in the context of forecasted sales and
planned promotions creates the production plan. The 3 primary
constraints that Influence manufacturing operations are
capacity, equipment, and setup/changeover.
Leadtime – measure of the elapsed time between release of a work to the
shop floor and the completion of all work necessary to achieve ready-to-
ship product status.
Operational time-combination of setup/changeover and running
or actual production time.
Inoperational time – unexpected delays encountered in manufacturing process.
Manufacturing Strategy
- Unique nature of each manufacturing process and customer
requirements limit the practical range of alternative manufacturing
strategies. However, strategic range is constrained by both
marketing and technological forces.
Basic Manufacturing Processes
Job Shop process – provides high flexibility to produce a variety of
different products, but in limited volumes (example: Commercial
printer in printing press that can print on several different paper sizes
with several different color combination).
Batch process – essentially a higher-volume job shop, in which the same or
similar products are produced repetitively. The variety of products in a
batch process is significantly lower than in a job shop, but is too large for
resources to be dedicated to a single product or family of products
(example: producing the larger, more expensive agricultural and
construction equipment).
Line Flow process – can produce high volumes of relatively standardized
products. Used when there are many customers who want similar
products, such as appliances, automobiles, and cell phones.
Continuous process – used for high-volume products where the demand
for the product is very large and can justify the capital investment
necessary. The processes are very inflexible, in that they cannot easily
be adapted to produce a different item. Examples are petroleum
refining, chemical production, steel, aluminum, and soft drinks.
Mass customization – where product is produced quickly and at a low cost
using a high-volume production process.
“Changes in management practices and technology have led to the cost
advantages of high-volume continuous and line flow processes while
increasing variety.”
Alternative Manufacturing Strategies
- Strategies differ considerably in their ability to meet individual customer
requirements for exact product specifications and therefore the logistical
requirements required to support their use.
- Choice of manufacturing strategy impacts the total order-to-delivery
time that customers experience.
Four common Manufacturing strategies:
(1) Engineer-to-Order
- products are unique and extensively customized for the specific needs of
individual customers (Ex: custom-built house, cruise ship, specialized
industrial equipment & custom-built racing bicycle).
(2) Make-to-Order
- differ from ETO in that customers typically order from standardized
product designs that may be somewhat customized to meet a specific
customer need (Ex: passenger airplane, custom-built furniture, high-end
consumer products).
(3) Assemble-to-Order
- base product components are manufactured in anticipation of future
customer orders; however, no finished product is created until customer
places an order. Unfortunately, customer must wait for the assembly
portion of the manufacturing cycle. Successful sellers of ATO products
must keep their assembly times as short as possible.
(4) Make-to-Plan
- Totally dependent on a forecast of customer demand, significant finished
goods inventory is typically manufactured in anticipation of future
customer orders. The degree of product customization is limited to the
manufacturer’s marketing strategy concerning market segmentation and
product differentiation.
Contemporary Manufacturing Developments
- developments may seem contradictory to one another while others are
clearly contemporary.
- organizations strive to find and implement approaches that will result in a
distinctive competitive advantage.
Mass Customization
- Approach that lowers labor, materials, and energy costs of production.

Primary Objectives of Lean Systems:

1. Produce only the products that customers want
2. Produce products only as quickly as customers want to use them
3. Produce products with perfect quality
4. Produce in the minimum possible lead times
5. Produce products with features that customers want, and no others
6. Produce with no waste of labor, materials, or equipment; designate a purpose for every
movement to leave zero idle inventory
7. Produce with methods that reinforce the occupational development of workers
Flexible Manufacturing
- Incorporate Robust process design, relying extensively on the abilities of
the workforce and the implementation of flexible automation.
Flexible automation - use of automated technologies and robotic systems
to rapidly adapt manufacturing processes to different product requirement.
Six Sigma
- The goal is to achieve a process standard deviation that is six times
smaller than the range of outputs allowed by the product’s design
specification.
- Primary objective is to design and improve products and processes so
that variability is reduced; defect-free product, 99.99% of the time.
Requirements Planning
- (MRP-Materials Requirements Planning) used to aid in the interface
between purchases and supplier. Attempts to gain benefits similar of JIT,
minimize inventory, maintain high utilization of manufacturing capacity.
Design-for-Manufacture
- (DFM) set of tools and methods that focus design activities on improving
product manufacturability. – refers to the speed, ease, cost efficiency, and
reliability with which a product can be produced.
- Makes use of many tactics for communicating and highlighting the needs
and limitations that manufacturing process capabilities impose on the
product design.
DFM Analysis processes
1. Design-for-assembly- focuses on minimizing the number of parts and on easing
assembly processes.
2. Design-for-product-serviceability – focuses on easing the disassembly and reuse of
product components.
3. Design-for-six-sigma – systemically evaluates the consistency with which a good or
service can be produced or delivered given the capabilities of the processes used.
Design-for-Logistics
- (DFL) incorporated with DFM where logistics interface with other functional areas
in the early phases of product design.
- where product and component design must have consideration of transportation
and internal materials handling methods to ensure that cost-efficient, damage-free
logistics performance can be achieved. *End*