Podcast
Questions and Answers
What enables T-shirt shops to put a unique design on a customer's T-shirt at the point of purchase?
What enables T-shirt shops to put a unique design on a customer's T-shirt at the point of purchase?
What is the main objective of delaying some supply chain activities until true customer demand is revealed?
What is the main objective of delaying some supply chain activities until true customer demand is revealed?
What type of products are built based on the projection of their future demand?
What type of products are built based on the projection of their future demand?
What is the process of reconfiguring product and process design to allow for postponement of final product customization?
What is the process of reconfiguring product and process design to allow for postponement of final product customization?
Signup and view all the answers
Which of the following companies adopted a different approach for the manufacture of a range of cars?
Which of the following companies adopted a different approach for the manufacture of a range of cars?
Signup and view all the answers
What is the percentage of shared components among the Toyota Aygo, Peugeot 107, and Citroen C1?
What is the percentage of shared components among the Toyota Aygo, Peugeot 107, and Citroen C1?
Signup and view all the answers
What is the purpose of the decoupling point in mass customization?
What is the purpose of the decoupling point in mass customization?
Signup and view all the answers
What is the main advantage of postponement in mass customization?
What is the main advantage of postponement in mass customization?
Signup and view all the answers
What is the role of Toyota in the joint factory production of the Toyota Aygo, Peugeot 107, and Citroen C1?
What is the role of Toyota in the joint factory production of the Toyota Aygo, Peugeot 107, and Citroen C1?
Signup and view all the answers
What is the location of the joint factory production of the Toyota Aygo, Peugeot 107, and Citroen C1?
What is the location of the joint factory production of the Toyota Aygo, Peugeot 107, and Citroen C1?
Signup and view all the answers
What was introduced by Tesla in 2015 to expand its vehicle lineup?
What was introduced by Tesla in 2015 to expand its vehicle lineup?
Signup and view all the answers
What was Tesla's commitment, as demonstrated by its subsequent models, including the Model 3 sedan and the compact SUV Model Y?
What was Tesla's commitment, as demonstrated by its subsequent models, including the Model 3 sedan and the compact SUV Model Y?
Signup and view all the answers
What is the significance of securing a stable supply of critical minerals and metals in Tesla's supply chain?
What is the significance of securing a stable supply of critical minerals and metals in Tesla's supply chain?
Signup and view all the answers
What is unique about Tesla's supply chain management, reminiscent of Fordism?
What is unique about Tesla's supply chain management, reminiscent of Fordism?
Signup and view all the answers
What was Tesla's strategy to reduce dependency on external suppliers for key minerals like nickel, lithium, and cobalt?
What was Tesla's strategy to reduce dependency on external suppliers for key minerals like nickel, lithium, and cobalt?
Signup and view all the answers
What did Tesla recognize as a limitation in its supply chain, leading it to invest in developing proprietary battery cells?
What did Tesla recognize as a limitation in its supply chain, leading it to invest in developing proprietary battery cells?
Signup and view all the answers
What is the purpose of Tesla's investment in developing proprietary battery cells?
What is the purpose of Tesla's investment in developing proprietary battery cells?
Signup and view all the answers
How does Tesla's supply chain management differ from traditional auto companies?
How does Tesla's supply chain management differ from traditional auto companies?
Signup and view all the answers
What is the complexity of the supply chain for electric vehicle batteries, according to the text?
What is the complexity of the supply chain for electric vehicle batteries, according to the text?
Signup and view all the answers
What is the significance of mining raw materials in the supply chain for electric vehicle batteries?
What is the significance of mining raw materials in the supply chain for electric vehicle batteries?
Signup and view all the answers
This strategy thus, ‘pushes’ the product to the end user or customer through ______ promotions and other incentives.
This strategy thus, ‘pushes’ the product to the end user or customer through ______ promotions and other incentives.
Signup and view all the answers
Push means make all we can just in case make to ______.
Push means make all we can just in case make to ______.
Signup and view all the answers
Make-to-Order (MTO) means a ______ strategy.
Make-to-Order (MTO) means a ______ strategy.
Signup and view all the answers
MTO means a demand driven strategy that determines the production, distribution, and service delivery schedules based on the actual ______ demand.
MTO means a demand driven strategy that determines the production, distribution, and service delivery schedules based on the actual ______ demand.
Signup and view all the answers
Lead time is the lengths of time it takes to design, make, and deliver the ______.
Lead time is the lengths of time it takes to design, make, and deliver the ______.
Signup and view all the answers
Pull means make what is needed when we need it, make to ______________
Pull means make what is needed when we need it, make to ______________
Signup and view all the answers
Assemble-to-order (ATO) is a hybrid of MTO and ______________
Assemble-to-order (ATO) is a hybrid of MTO and ______________
Signup and view all the answers
The ATO process builds subassemblies in advance of demand, and the final assembly is made to ______________
The ATO process builds subassemblies in advance of demand, and the final assembly is made to ______________
Signup and view all the answers
Michael Porter argues that a company can increase its competitive advantage by developing a ______________ creating or value adding strategy
Michael Porter argues that a company can increase its competitive advantage by developing a ______________ creating or value adding strategy
Signup and view all the answers
The ______________ model is used to increase a company's competitive advantage
The ______________ model is used to increase a company's competitive advantage
Signup and view all the answers
Mass customization components involve delaying some supply chain activities such as assembly, packaging, labeling, and ______ until true customer demand is revealed.
Mass customization components involve delaying some supply chain activities such as assembly, packaging, labeling, and ______ until true customer demand is revealed.
Signup and view all the answers
The Toyota Aygo, Peugeot 107, and Citroen C1 share ______% of the same components.
The Toyota Aygo, Peugeot 107, and Citroen C1 share ______% of the same components.
Signup and view all the answers
The point at which we move from the base product to customized products is called the ______ point.
The point at which we move from the base product to customized products is called the ______ point.
Signup and view all the answers
T-shirt shops can put a unique design on a customer's T-shirt at the point of ______.
T-shirt shops can put a unique design on a customer's T-shirt at the point of ______.
Signup and view all the answers
Mass customization involves producing generic products that can be modified at the later stages before the final transport to the ______.
Mass customization involves producing generic products that can be modified at the later stages before the final transport to the ______.
Signup and view all the answers
A large amount of buffer inventory, can reduce ______
A large amount of buffer inventory, can reduce ______
Signup and view all the answers
Increased velocity, such as faster production runs and quick deliveries, reduces the forecasting time horizon and thus increases ______
Increased velocity, such as faster production runs and quick deliveries, reduces the forecasting time horizon and thus increases ______
Signup and view all the answers
Considering this complex dynamics involving volume, velocity, variability, and ______, the company should factor all these into its strategic decision and development of the supply chain framework.
Considering this complex dynamics involving volume, velocity, variability, and ______, the company should factor all these into its strategic decision and development of the supply chain framework.
Signup and view all the answers
The companies that succeed are those that understand which dimensions to excel on and are able to focus their energies on those ______
The companies that succeed are those that understand which dimensions to excel on and are able to focus their energies on those ______
Signup and view all the answers
Process strategy is a dynamic rather than a static ______.
Process strategy is a dynamic rather than a static ______.
Signup and view all the answers
The decoupling point in the production process is where the core PC platforms are configured into final products demanded by ______.
The decoupling point in the production process is where the core PC platforms are configured into final products demanded by ______.
Signup and view all the answers
Two aspects to agility are speed of reaction and the ability to tailor operations to demands from individual ______.
Two aspects to agility are speed of reaction and the ability to tailor operations to demands from individual ______.
Signup and view all the answers
Tesla has invested over $28 billion in capital over two decades to build production capacity, develop new technologies, and create a global electric vehicle ______.
Tesla has invested over $28 billion in capital over two decades to build production capacity, develop new technologies, and create a global electric vehicle ______.
Signup and view all the answers
Tesla plans to spend nearly $150 billion to sell 20 million vehicles per year, with CEO Elon Musk expressing confidence in infinite demand for their ______.
Tesla plans to spend nearly $150 billion to sell 20 million vehicles per year, with CEO Elon Musk expressing confidence in infinite demand for their ______.
Signup and view all the answers
Tesla's journey began with the production of the Roadster which was hand-crafted using standard tools in an assembly line like a ______.
Tesla's journey began with the production of the Roadster which was hand-crafted using standard tools in an assembly line like a ______.
Signup and view all the answers
Study Notes
Approaches to Product Process
- Continuous Process: operates on a basis of continuous flow without interruption, difficult to differentiate the product, low cost becomes the "order winner" in very price-sensitive markets, highly standardized, automated, operate at capacity, and minimal inventories and high volume of production.
- Assembly Line: a linear sequence of operations, the product moves from one step to the next in a sequential manner usually by a conveyor system, difficult to make changes in the product itself or the volume of flow, resulting in inflexibility of operations, requires large amounts of capital investment and must have high volume to justify the investment.
- Batch Process: manufacturing in batches or lots that flow as a unit from one work center to another, each of these products can have a different flow path, and some products actually skip certain work centers making the flow jumbled and intermittent, uses general-purpose equipment that is not specialized to make just one particular product, labor is more skilled and flexible in its ability to make different products.
- Job Shop: a special case of the batch process, the product is made in batches, usually in small lot sizes, but the product must be made to customized order, uses general-purpose equipment and has a jumbled flow, has high flexibility for product mix and volume of production, but the costs are generally higher since the volume and standardization are low.
- Project: used for unique or creative single products, materials and labor are brought to the project site and the project itself is stationary, difficult planning and scheduling problems are common so difficult to automate, labor must be highly skilled with the unique nature of the product or service being made.
5Vs
- Volume: relates to the quantity of production or sales, low cost becomes the "order winner" in very price-sensitive markets.
- Velocity: relates to the speed at which products are produced and delivered to customers.
- Variability: relates to the mix of products produced and the ability to customize products.
- Visibility: relates to the ability to track and manage inventory, production, and delivery.
- Victory: refers to the ability to win in the market by excelling in one or more of the 5Vs.
Mass Customization
- Mass customization: a strategy to provide custom products in lot sizes of one in high volume.
- Depends on variability of scope—that is, a high variety of products from a single process.
- Reduces the average unit cost due to production of several products by the same process.
Mass Customization Components
- Modular production and assemble-to-order (ATO): modular production provides a variety of options by using an assemble-to-order process.
- Fast changeover: production is digitally controlled and each order is uniquely identified by a bar code, or other identifier, that specifies the customer’s options, nearly zero changeover time on equipment.
- Postponement of options: delays some supply chain activities such as assembly, packaging, labeling, and painting until true customer demand is revealed, while building products in semi-finished forms based on the projection of their future demand.
- Decoupling point: the point at which we move from the base product to customized products.
Case Study - Tesla
- No specific notes on Tesla as the text does not provide any information about Tesla's production process.
Job Shop Production
- Each product has a different flow path, and some products skip certain work centers, resulting in a jumbled and intermittent flow.
- General-purpose equipment is used, and labor is skilled and flexible to make different products.
- Job shop production is suitable for made-to-order products, such as plastic parts, machine components, sheet metal parts, custom signs, and artificial limbs.
Approaches to Product Process
- Job shop production is a special case of batch processing, where products are made in batches, usually in small lot sizes, but customized to order.
- The flow is jumbled, and the costs are generally higher due to low volume and standardization.
- Project production is used for unique or creative single products, where materials and labor are brought to the project site, and the project itself is stationary.
Approaches to Order Fulfillment
- Make-to-Order (MTO) production starts after customer orders, and each job in the process is associated with a particular customer.
- There is no finished goods inventory, and the advantage is higher flexibility to customize orders with no finished goods inventory costs.
- The disadvantage is intermittent production with slower response to customer demand with a large volume.
Assemble-to-Order (ATO)
- ATO is a hybrid of MTO and Make-to-Stock (MTS), where subassemblies are made-to-stock, but the final assembly is made-to-order.
- The ATO process builds subassemblies in advance of demand, and when the customer order is received, the subassemblies are taken from inventory and assembled together.
- The advantage is less finished goods inventory, and faster fulfillment of customer orders, while the disadvantage is work-in-process inventory.
Process Selection Decisions
- The Process Characteristics Matrix helps in selecting the right process, considering factors such as volume, variability, and visibility.
- The matrix categorizes processes into continuous assembly line, batch, job shop, and project production, and matches them with suitable products.
Five Vs
- The Five Vs framework by Michael Porter considers volume, velocity, variability, visibility, and victory in developing a value-adding strategy.
- A company should focus on a few dimensions to excel and continually trade off one competitive dimension for another.
Case of Tesla
- Tesla's supply chain is vertically integrated, controlling sales, service, and charging networks, and manufacturing key components in-house.
- Tesla secured direct supply deals with mining companies for critical minerals and metals, reducing dependency on external suppliers.
- Tesla also developed and produced its proprietary battery cells to supplement its current supply chain, aiming for cost-effective scalability and greater volume security.
Push Strategy
- A strategy that 'pushes' products to end users or customers through sales promotions and incentives.
- Relies heavily on long-term forecasts of customer demand, which can be error-prone.
- Can lead to building up unwanted inventory, failing to meet changing demand patterns.
Make-to-Order (MTO)
- Start production after customer orders.
- Each job is associated with a particular customer.
- No finished goods inventory.
- Advantages: higher flexibility to customize orders, no finished goods inventory costs.
- Disadvantages: intermittent production, slower response to customer demand with large volumes.
MTO Performance Measures
- Lead time: the length of time it takes to design, make, and deliver the product.
- Orders completed on time (%): comparing customer request dates with promise dates.
MTO as a Pull Strategy
- A demand-driven strategy that determines production, distribution, and service delivery schedules based on actual customer demand.
- Makes and distributes what is "pulled" from the end user or customer at the rate of their true demand requirements.
- Better adapts to changes in customer tastes, preferences, and expectations without producing and distributing unwanted products.
Assemble-to-Order (ATO)
- A hybrid of MTO and Make-to-Stock (MTS).
- The subassemblies are made-to-stock, but the final assembly is made-to-order.
- Advantages: less finished goods inventory, faster fulfillment of customer orders.
- Disadvantages: work-in-process inventory.
Process Characteristics Matrix
- A matrix that categorizes process types based on their characteristics:
- Continuous process (e.g., automobile assembly, oil refining)
- Batch process (e.g., machine shop, wine production)
- Job shop process (e.g., machine shop, custom jewelry)
- Project process (e.g., speculation homes, commercial paintings)
Five Vs
- The victory model, which suggests that a company can increase its competitive advantage by developing a value-creating or value-adding strategy.
- Five Vs: volume, velocity, variability, visibility, and victory.
Mass Customization
- A strategy that delays some supply chain activities until true customer demand is revealed.
- Builds products in semi-finished forms (generic, grey products) based on projected demand.
- Customizes products immediately in production and distribution facilities close to customers.
- Examples: Toyota, Citroën, and Peugeot's joint factory in the Czech Republic.
Postponement Strategy
- A strategy that delays final product customization as far downstream as possible.
- The point at which we move from the base product to customized products is called the decoupling point.
- Example: Dell's decoupling point is the point in the production process where core PC platforms are configured into final products demanded by customers.
Agility
- A strategy that prioritizes speed of reaction and ability to tailor operations to demands from individual customers.
- Implies that agility puts service first, even if it means slightly higher costs.
Case of Tesla
- Tesla is the world's most valuable automotive company with an annual revenue of $81 billion and a market capitalization exceeding $800 billion.
- Tesla has invested heavily in building production capacity, developing new technologies, and creating a global electric vehicle supply chain.
- Tesla's journey began with hand-crafted production of the Roadster and evolved to mass production with the Model S sedan.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz covers different approaches to product processes, including continuous process and assembly line. Learn about the characteristics and advantages of each approach in operations management.
