Download Coping With High Product Variety and Uncertainty

Coping With High Product
Variety and Uncertainty
• Like lean manufacturing in that the objective is to cope
better with high product variety
• “Brute force” means coping the old fashion way -inventory
• EDI, FMS, computer-aided ordering help, but it’s not
enough
• The idea is to postpone customization or differentiation
for as long as possible – even to the point-of-sale
Three Enablers
Product
Modularity
Process
Modularity
Agile
Network
Design
Design For Customization
Framework
ENABLERS
DESIGN PRINCIPLES
Product Modularity
• Commonality
• Postponement of modules (product configuration)
Process Modularity
• Resequencing of processes
• Postponement of processes
• Process standardization
Agile Network Design • Postponement of modules and processes
• De-coupling points by inventory stocking
Modularity Enhances Flexibility
in Distribution Design
• Centralized distribution center for common components
• Local distribution centers for customized components
• Design for localization
• Assemble and test product, “bundle” accessories at
distribution centers
Cost Trade-offs
Costs
 Equipment costs may be higher
 Maintain more local sites
 Some common modules cost more
Benefits
 Less Inventory
 Less stockouts and markdowns
 Lower transportation and duty costs