Linda Hendry

A review of production planning and control: the applicability of key concepts to the make-to-order industry

The paper reviews ‘classic approaches’ to Production Planning and Control (PPC) such as Kanban, Manufacturing Resource Planning (MRP II) and Theory of Constrains (TOC), and elaborates upon the emergence of techniques such as Workload Control (WLC), Constant Work In Process (CONWIP), Paired cell Overlapping Loops of Cards with Authorization (POLCA) and web- or e-based Supply Chain Management (SCM) solutions. A critical assessment of the approaches from the point of view of various sectors of the Make-To-Order (MTO) Industry is presented. The paper considers factors such as the importance of the customer enquiry stage, company size, degree of customization and shop floor configuration and shows them to play a large role in the applicability of planning and control concepts. The paper heightens the awareness of researchers and practitioners to the PPC options, aids managerial system selection decision-making, and highlights the importance of a clear implementation strategy. WLC emerges as the most effective Job Shop solution; whilst for other configurations there are several alternatives depending on individual company characteristics and objectives. The paper outlines key areas for future research, including the need for empirical research into the use of Workload Control in small and medium sized MTO companies.

Exploring the six sigma phenomenon using multiple case study evidence

Purpose – This research paper aims to: explore areas of weakness in six sigma implementations that may require enhancements in the methodology; to investigate implementation differences between manufacturing and services; and to investigate critical success factors. Design/methodology/approach – Exploratory empirical evidence is presented from nine case study companies in Thailand, including manufacturers, sales and service companies and a national airline. Findings – Key findings include: six sigma is more appropriate for high risk, complicated, large-scale and cross functional projects; the six sigma methodology could be enhanced to ensure that projects are aligned to company goals; the evidence questions standard text book advice that a “Black Belt” (BB) should have a full time role, as a part-time BB role can be more realistic particularly in a small company and the training materials available need to be improved to be more appropriate for service operations. Research limitations/implications – The main research limitation is in the number of companies studied and the restriction to companies located in Thailand. In addition, the research is exploratory and future research is needed to look at the issues raised in depth. Practical implications – All of the findings have practical implications. For example, the conclusion on the nature of the BB role is seen as a key issue for successful use of six sigma in small businesses. Originality/value – Six sigma has been widely used in industry, but there has been limited rigorous academic research. This paper seeks to identify a series of issues worthy of further attention from the academic community using a rigorous research approach.

Supply-chain uncertainty: a review and theoretical foundation for future research

Supply-chain uncertainty is an issue with which every practising manager wrestles, deriving from the increasing complexity of global supply networks. Taking a broad view of supply-chain uncertainty (incorporating supply-chain risk), this paper seeks to review the literature in this area and develop a theoretical foundation for future research. The literature review identifies a comprehensive list of 14 sources of uncertainty, including those that have received much research attention, such as the bullwhip effect, and those more recently described, such as parallel interaction. Approaches to managing these sources of uncertainty are classified into: 10 approaches that seek to reduce uncertainty at its source; and, 11 approaches that seek to cope with it, thereby minimising its impact on performance. Manufacturing strategy theory, including the concepts of alignment and contingency, is then used to develop a model of supply-chain uncertainty, which is populated using the literature review to show alignment between uncertainty sources and management strategies. Future research proposed includes more empirical research in order to further investigate: which uncertainties occur in particular industrial contexts; the impact of appropriate sources/management strategy alignment on performance; and the complex interplay between management strategies and multiple sources of uncertainty (positive or negative).

Competitive advantage, customisation and a new taxonomy for non make‐to‐stock companies

Presents a new taxonomy for the non make‐to‐stock sector to enable a like‐with‐like comparison, arguing that existing taxonomies within the literature are inadequate for strategic research purposes. Presents empirical evidence which has been collected from 22 companies in three European countries – the UK, Denmark and The Netherlands. The data support the structure of the proposed new taxonomy and provide insights into competitive advantage and customisation issues in the non make‐to‐stock sector. Finally, two new labels for this sector of industry are proposed. “Versatile manufacturing company” is used to describe those manufacturers which are involved in a competitive bidding situation for every order which they receive, customisation by individual order. In contrast, the “Repeat business customiser” may only be in this position for the first of a series of similar orders from a particular customer, customisation by contract.

Responding to customer enquiries in make-to-order companies Problems and solutions

Make-to-order companies are in the business of supplying products in response to a customer order in competition with other companies, on the basis of price, technical expertise, delivery time and reliability in meeting due dates. Dealing properly with enquiries is the major problem that MTO companies face. A lack of co-ordination between sales and production at the customer enquiry stage often leads to confirmed orders being delivered later than promised and/or being produced at a loss. The treatment of an enquiry is a multi-stage decision process. The initial decision is whether or not to prepare a bid, and if so, how much effort to put into the specification and estimation process. The MTO company has the choice of putting in a lot of effort to prepare a competitive bid or making a quick estimate with a high safety margin to allow for errors and unforeseen problems expecting further later negotiation with the customer. Consideration has to be given to the likely accuracy of the cost estimates produced. The feasibility of being able to produce the order with the current work load at different delivery times needs to be evaluated together with any extra costs incurred. An input/output planning approach based on the control of a hierarchy of backlogs of work is proposed to produce a dynamic capacity planning model to determine the capacity to provide at each work centre in future time periods, allocating overtime, transferring operators, process as split batches etc. In setting the price and lead time to quote to the customer, the probability of winning the order plays an important role. A model based on a chi-squared analysis of data on past enquiries is proposed to divide the market into sectors of similar orders. It is extended to produce a strike rate matrix for each sector giving the probability if winning orders in that sector as a function of the price and lead time quoted. A general model for the whole enquiry process is presented, together with a decision support/expert system. This indicates where the qualitative judgmental rules, typically used by companies, could be used to advantage.

Six Sigma: literature review and key future research areas

It is a timely point to extensively review the literature on Six Sigma given the recent increased research interest. This paper reviews more than 200 Six Sigma papers, classifying them according to their research content and the research methodology employed. A comprehensive list of future research areas is given. Key examples are further development of a scientific foundation for the methodology; integrating Six Sigma with other methodologies such as adding Lean Tools; considering implementation issues in areas other than North America and Europe and furthering the debate on how to adapt the approach for use in a service context.

Applying world class manufacturing to make‐to‐order companies: problems and solutions

The world of manufacturing has recently undergone many major changes leading to guidelines on what is “best practice” or world class manufacturing (WCM) in terms of both methods of operation and of performance. These guidelines are based on the companies that have been most successful, mainly the mass production industry, that has been transformed into the mass customisation sector. This paper argues that such guidelines cannot be entirely appropriate to other industry sectors, in particular to the traditional “make‐to‐order” (MTO) sector. The highly variable customer demand in this sector often means that it is strategically desirable to retain a job shop layout for at least part of the business, rather than converting the business to a series of focused cells. This paper seeks to propose a set of alternative guidelines on how MTO companies that choose to retain a job shop layout should attempt to attain WCM status. To justify the proposals, it presents some case study evidence giving two examples of companies that have remained job shops and explaining how one of them has nonetheless made substantial improvements in performance and practice.

Integrating marketing and production planning in make-to-order companies

Abstract Make-To-Order companies are in the business of supplying products only in response to a customers order. They may supply unique products made to a customers specification and/or a limited range of products. They range from the traditional job shop, e.g. cutting pieces of metal to a specific shape, to producers of machine tools, e.g. a vulcanising line. A major problem is the divide between sales/marketing and production. The production function is often faced with unrealistic delivery dates for incoming orders. This arises when the sales force quote delivery dates and prices which will maximise the chance of the company winning the order. The lack of coordination with production often leads to confirmed orders being delivered later than promised by sales and/or being produced at a loss, or alternatively production has to delay other orders with consequent extra costs. The need to integrate sales and production planning considerations at the customer enquiry stage in deciding how to respond has been pointed out by several authors, yet little research has been carried out. The paper will discuss some possible approaches to the problem. These essentially depend on estimating routinely the probability of winning an enquiry order, dependent on many factors including price and lead time etc. Companies do not traditionally keep records of this data, particularly records of unsuccessful bids and on competitors. In addition, the paper describes the experience of setting up a system to collect such data in a major UK company and the potential uses of such a database.

A Decision Support System for Job Release in Make‐to‐order Companies

A Decision Support System (DSS), specifically designed to address the needs of small‐to medium‐sized make‐to‐order companies, is currently being developed. It includes two of the most important features in such a system. First, it aims to integrate the production and marketing functions within a firm. Second, it is a hierarchical system which addresses two decision levels – the customer‐enquiry stage and the job‐release stage. That part of the DSS developed for the job‐release stage is described. At this stage the aim of the system is to maintain low work‐in‐progress inventory levels whilst ensuring that all jobs are released in time to be delivered by their promised delivery dates. An approach which uses input/output control is proposed to achieve these objectives. The major advance of the proposed approach is its ability to control the total manufacturing lead times of jobs rather than just considering the shopfloor throughput time.

The effect of workload control (WLC) on performance in make-to-order companies

Abstract Workload control (WLC) concepts are a new group of production planning and control methods designed to control queues in a job shop manufacturing environment. Their importance lies in the need to maintain this type of flexible manufacturing environment in make-to-order (MTO) companies, which manufacture different products for different customers. There have been several well-developed WLC concepts presented in the literature that address two major decision levels in MTO firms, the job entry level and the job release level. At the job entry level, customer enquiries are processed, and delivery dates (DDs) and prices are quoted to customers. At the job release level, decisions are made regarding which jobs should be released to the shop floor so that processing can commence. The effectiveness of WLC concepts at these two decision levels has been explored in the literature but is still inconclusive, especially in terms of the ability of the job entry level to address one of the most important objectives of WLC - the control of manufacturing lead times. This paper presents a simulation model designed to test the effectiveness of one of the most comprehensive WLC concepts presented in the literature. The model enables the effect of various control parameters within this WLC concept to be explored, including those used at the job entry level to control manufacturing lead times. Experimental results are presented, indicating that this particular concept can lead to lower manufacturing lead times when compared with an environment of no control, even when the same total workload is processed by the shop.