Engineering and production decoupling configurations: An empirical study in the machinery industry

Abstract

Engineer-to-order supply chains are traditionally considered to perform all engineering and production activities based on specific orders. However, in practice, some engineering and production activities can be speculatively undertaken to reduce the delivery lead time, thus leading to a range of decoupling configurations for both engineering and production processes. The literature rarely addresses this issue, mainly focusing on either the production or the engineering dimensions, which opens a gap between theory and practice. The purpose of this study is to reduce this gap and assess the potential impact of a unique two-dimensional customer order decoupling point (2D-CODP) framework that is inclusive of all the individual literature studies and to evaluate the managerial approaches employed in the different decoupling configurations. To achieve this aim, research using multiple case studies is conducted in the machinery industry. The key results flowing from the empirical analysis are the identification of 4 clusters of decoupling configurations chosen by the different cases and the classification of the managerial approaches employed in the specific decoupling configurations. The main contribution of this paper is that it adds insight regarding the debate on engineer-to-order definitions. Additionally, this paper enriches existing knowledge regarding the contingencies that drive the application of different managerial approaches upstream and downstream of the CODP. Finally, this paper provides cases that exemplify how to use the 2D-CODP framework, guiding managers in understanding the positioning of the product families and choosing how to manage and coordinate activities upstream and downstream of the CODP based on their positioning.

A tactical demand-supply planning framework to manage complexity in engineer-to-order environments: insights from an in-depth case study

“…The contextual variations within ETO-oriented businesses result in different COD configurations, as proposed by Gosling, Hewlett, and Naim (2017). Cannas et al (2019) further developed a twodimensional (2D) COD framework addressing engineering and production configurations as separated process flows with underlying sub-flows. Table 1 combines insights from the works of Cannas et al (2019) and Gosling, Hewlett, and Naim (2017) describing common engineering decoupling configurations.…”

“…The generic production decoupling configurations refer to the initial production activities after the entry of customer orders: purchasing raw materials, production of components and subassemblies, using some components in stock and making or purchasing the customised components to finalise assembly, final assembly using components and subassemblies in stock, and delivery of finished products from stock (Cannas et al 2019).…”

“…Allocating or loading resources aims at identifying capacity issues early and triggering process planning when necessary. However, for companies performing minimal engineering and production to forecast, routings and processing durations of engineering activities lack standard references (Cannas et al 2019). To deal with such contexts imposing increasing complexities in concurrent engineering workflows, Ventroux, Marle, and Vidal (2018) suggested reshuffling projects between and within the organisations (resources) to maximise the number of interactions supporting critical decision-making and action processes.…”

“…According to Yin (2017), the goal of single-case studies is not to extrapolate probabilities and statistical generalisations, but to rather expand analytic generalisations to theoretical propositions, not to populations. As described in Section 2, to be effective, the managerial approaches to which tactical planning belongs must fulfil the requirements of the 2D-COD position in question (Cannas et al 2019). Usually, the assortments ETO-oriented companies offer may include product families with various 2D-COD configurations.…”

“…Case data excerpts describing the decision impact on complexity drivers a,b at SGC Related drivers: Same as the impact of TD1 on DC1, DC2, DC3, DC4, DC5, SC1, SC3, SC4, SC5, SC8, SC10 and impact on SC2 Design leader: 'The tendency of some sales specialists at [SGC] who purposefully encourage and approve enquires with design uniqueness, even if it is unnecessary, as to distinguish ourselves as a contractor led to a proliferation of various design details [SC2] that fulfil the same functional and spatial requirements'. a Demand-related drivers include DC1: Number of customers, DC2: Size of customers, DC3: Heterogeneity in customer needs, DC4: Customer's product knowledge, and DC5: Customer's order change behaviour b Supply-related drivers include SC1: Number of products, SC2: Number of components, SC3: Technology maturity, SC4: Breadth of customisable product structure, SC5: Degree of design modularity, SC6: Number of external contributors, SC7: Sales and engineering process structures, SC8: One-of-a-kind or low volume batch production, SC9: Manufacturing schedule instability, SC10: Cross-functional interfaces, SC11: Reliability and length of supplier lead times, and SC12: Supply base globalisation by Cannas et al (2019) (denoted in grey-shaded squares). These configurations match the five COD categories which were conceptually identified (Table 1) empirically analysed (Table 4).…”