Managing complexity through integrative tactical planning in engineer-to-order environments: insights from four case studies

Abstract

Fulfilling customer orders in engineer-to-order (ETO) settings entails customization and, thus, greater complexity: detail and uncertainty. Tactical planning aims at demand-supply (DS) balancing by ensuring cross-functional integration (CFI), which incorporates coordination as one dimension. This study uses a case study approach to identify the key coordination mechanisms applied in the customer order fulfilment processes (COFPs) to mitigate the negative impact of complexity on DS balancing in four ETO-oriented settings. Within-case analyses identify the applied mechanisms, and a cross-case analysis elaborates on how they influence the detail and uncertainty in decision-making and problemsolving activities. Findings suggest a positive effect of formalized activity sequences, balanced team compositions, effective task designs and supportive information systems (ISs); and a positive (but contingent) effect of the other mechanisms. Future research may address other CFI dimensions (collaboration), statistically test the findings, or qualitatively deepen the understanding of the forms and impacts of individual mechanisms.

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

“…ETO product architectures allow countless customisation and modular configurations that require various levels of production flexibility (Shurrab, Jonsson, and Johansson 2020). Such response options to the ETO SC needs proliferate as the freedom to propose and design solutions to customerstypically given to sales and engineering functions, respectively-increases (Cannas et al 2020).…”

“…Here, customers substantially vary in organisation size, tendency to request changes after agreements, and knowledgeability of technical and functional needs (Cannas et al 2020). Such high complexity challenges demand-supply (DS) balancing as identifying the capacity needs is subject to significant uncertainty that limits the accuracy of estimated capacity requirements and timeliness of required decisions (Shurrab, Jonsson, and Johansson 2020).…”

“…This makes production planning at an aggregate medium-term (tactical) level necessary to early detect potential shortages in, for instance, critical competences (Giebels 2000) which are often challenging to acquire at short notice (Cooper and Budd 2007). Therefore, failure to identify types and timings of critical capacity constraints in ETO settings typically leads to DS balancing failure (Shurrab, Jonsson, and Johansson 2020). Thus, SC complexity in ETO contexts makes tactical DS balancing both crucial and difficult to manage.…”

“…They simplify the tactical planning problem by focussing on a few fragmented activities and decisions. Addressing all important tactical-level planning activities and decisions is crucial for proper DS balancing (Shurrab, Jonsson, and Johansson 2020). To extend the understanding of tactical-level DS balancing in ETO settings, there is, thus, a need to holistically conceptualise the underlying planning activities and decisions that serve as a response to the ETO SC complexity, and understand how these activities and decisions manage SC complexity.…”

“…Several studies associate the order fulfilment process with tactical planning in ETO settings as this process aims at aligning sales opportunities with the strategic business objectives, and identifying corresponding supply and capacity needs within a medium-term time horizon (e.g. Giebels 2000;Hans et al 2007;Carvalho, Oliveira, and Scavarda 2015;Shurrab, Jonsson, and Johansson 2020). Therefore, this study focuses on the order fulfilment process.…”