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    Manufacturing Strategy: Ken Homa

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    zeeshan3
    This document discusses key elements of manufacturing strategy, including capacity, centralization, vertical integration, and scope/focus. It addresses topics such as optimal capacity utilization levels, the benefits of centralized vs decentralized manufacturing, where companies should fall on the continuum between assembly-only and vertical integration, and the tradeoffs between broad line factories and more focused factories organized by product or process. The overall goal is to determine the best deployment of manufacturing resources.

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    Manufacturing Strategy: Ken Homa

    Uploaded by

    zeeshan3
    66 views17 pages
    This document discusses key elements of manufacturing strategy, including capacity, centralization, vertical integration, and scope/focus. It addresses topics such as optimal capacity utilization levels, the benefits of centralized vs decentralized manufacturing, where companies should fall on the continuum between assembly-only and vertical integration, and the tradeoffs between broad line factories and more focused factories organized by product or process. The overall goal is to determine the best deployment of manufacturing resources.

    Original Description:

    How organizations manage their inventory through integrated and focused approach

    Original Title

    Manufacturing Strategy

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    This document discusses key elements of manufacturing strategy, including capacity, centralization, vertical integration, and scope/focus. It addresses topics such as optimal capacity utilization levels, the benefits of centralized vs decentralized manufacturing, where companies should fall on the continuum between assembly-only and vertical integration, and the tradeoffs between broad line factories and more focused factories organized by product or process. The overall goal is to determine the best deployment of manufacturing resources.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    66 views17 pages

    Manufacturing Strategy: Ken Homa

    Uploaded by

    zeeshan3
    This document discusses key elements of manufacturing strategy, including capacity, centralization, vertical integration, and scope/focus. It addresses topics such as optimal capacity utilization levels, the benefits of centralized vs decentralized manufacturing, where companies should fall on the continuum between assembly-only and vertical integration, and the tradeoffs between broad line factories and more focused factories organized by product or process. The overall goal is to determine the best deployment of manufacturing resources.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 17

    Manufacturing Strategy

    Ken Homa

    Manufacturing Strategy
    Capacity
    Level
    Deployment

    Centralization
    Vertical integration
    Scope / focus

    Capacity
    Aggregate level
    Deployment
    By product & part
    By process
    By geography

    Aggregate Capacity
    Demand Variation
    180
    160
    140
    120
    100
    80
    60
    40
    20
    0

    Base
    "Real"

    1 2 3

    4 5 6 7 8 9 10 11 12

    Capacity Utilization
    Target 85-90% utilization
    Long-run :
    Prudently add anticipatory capacity :
    within existing facitliies, then new
    Avoid adding costly last chunk

    Short-run :
    Use excess capacity to build inventory
    for high demand periods
    Add overtiime to boost capacity when reqd
    Can run > 100% for brief periods
    Focus on bottlenecks (CCRs)

    Centralization /
    Decentralization

    Supplier

    Supplier

    Supplier

    Manufacturing
    Plant

    DC

    DC

    DC

    Supplier

    Supplier

    Mfg
    Plant

    DC

    Supplier

    Mfg
    Plant

    DC

    DC

    Manufacturing Strategy
    Centralized
    Leverages fixed costs & investment
    Consistent quality contol
    Simplified supply chain

    Decentralized
    Closer to market
    More manageable

    Scale determines range of affordable options

    Vertical Integration

    Vertical Integration
    Where on The Continuum ?

    Assembly
    Only

    Vertically
    Integrated

    Raw Material
    Parts
    Components
    Sub-assemblies
    Modules

    Final Assemblies

    Vertical Integration Drivers


    Availablity
    Scale economies
    Learning curve
    Control

    Factory Orientation
    Broad line factories
    Scale & scope economies
    Flexible capacity

    Focused factories
    Narrow product scope
    Common parts & processes
    Often full products

    Plants within plants

    Focused Factories
    A
    1

    P
    L 2
    A
    N 3
    T
    S
    4

    PRODUCTS

    X
    X X
    X

    Manufacturing Strategy
    Capacity
    Centralization
    Vertical integration
    Scope / focus

    Manufacturing Strategy

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