Variety and volume dynamic management for value creation in changeable manufacturing systems

Abstract

In today's uncertain market and continuously evolving technology, managing manufacturing systems are more complex than ever. This paper studies the d yn amics of managing variety and volume to enhance value creation in manufacturers implementing system level advanced and automated manufacturing technology (AAM1). The demand is composed of heterogeneous customers who make purchasing decisions depending on the variety levels and lead times of the firm's product offerings. The cost structure adopted calculates profit as the difference between customer value creation rate (VCR) and costs associated with the process of creating this value. Reported results contribute to the variety and volume management literature by offering analytical clarity of factors affecting product platforms and capacity scalability man agement for systems with AAMT. In addition, insightful answers to the trade offs between profit maximising market coverage and investments, smoothing demand policies and system stability for this type of environment are presented. Furthermore, the value of market information in deciding the industrial technology investment and also the impact of product life cycle on the same investment is captured.

Deploying AMT for Scale Versus Scope: A Contingency Approach

“…Thus, studies that ignore the motivating purpose behind AMT deployment are likely to be confounded. AMT's numerous mix-and-match modules, together with need-based activation, can provide economies of scope (Gadalla & Xue, 2017), while rapid capacity expansion through modular platforms (Deif & ElMaraghy, 2017) can enable economies of scale with large volume production at higher efficiency, tighter tolerances, better quality, and higher yield rates. Both flexibility and scalability are prized as valuable characteristics of the manufacturing system under Industry 4.0.…”

Implementation of a Flexible Manufacturing System in a production cell of the automotive industry: decision and choice

“…Cellular layouts are the best-suited layouts for FMS, due to their ability to economically process intermediate volume and variety of items (Deif & ElMaraghy, 2017). For high variety and low volume, a combination of job-shop system and discrete automation is better.…”

Scalability in manufacturing systems: a hybridized GA approach

“…Son et al (2001) presented one of the few approaches focusing on capacity scalability, which is combined with a line-balancing problem. Although this application was only limited to upgrading for serial lines through the replication of an existing station, the subject is still of great interest due to the great uncertainty in today's market, as discussed by Deif and ElMaraghy (2016) Despite the vast literature on reconfigurable manufacturing systems, the scalability problem tackled in this paper remains largely unaddressed. The most relevant and similar research on the problem has been presented by Koren (2012, 2017).…”