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1、Operations Flexibility,Motivation,What is flexibility What benefits does it provide, and how much does it cost What is its fit with operations strategy What are its dimensions How do you measure it,Strategic Considerations,Environmental uncertainties System capabilities Advanced technology Adequate
2、managerial response Scheduling, routing, product/process design,Company Posture,Reactive (defensive) Proactive Reactive/Proactive,Strategy Options,Adapt to uncertainty in real time Create “rainy-day” resource-bank Reduce uncertainty,Implications for Flexibility,Types of Uncertainty,Market acceptance
3、 of kinds of products Length of product life cycles Specific product characteristics Aggregate product demand Machine downtime Characteristics of materials,Flexibility Dimensions,Mix Changeover Modification Volume Rerouting Material,Uncertainty and Flexibility,Adaptive/Reduction,Delivering Flexibili
4、ty,Markets,ORGANIZATIONAL STRUCTURE,MICROPROCESSOR TECHNOLOGY,Component or basic Flexibilities,System Flexibilities,Aggregate Flexibilities,Machine,Material Handling,Operation,Process,Routing,Product,Volume,Expansion,Program,Production,Measuring Flexibility,Number of options available at a given poi
5、nt in time Number of rerouting paths in scheduling Entropy: opportunity to select a given option or the degree of randomness (uncertainty) in a system Range of some defining characteristics of outputs Instead of the number of car models produced use the range of wheel bases Difference in expected pr
6、ofits with and without flexibility Most of the value of flexibility can be realized at low cost because only a few options are necessary,Flexibility postulates,Increasing variety (hence mix flexibility) increase complexity Innovations in process technology make flexible technology obsolete Modificat
7、ion flexibility reduces pressure to get design right first time Volume flexibility requires excess capacity and slack in production/service schedules Rerouting flexibility discourages efforts to reduce machine breakdowns Material flexibility reduces pressure to reduce quality problems,Flexibility th
8、rough Capacity-chain,Two plants Each plant with capacity of 100 units Production of two products Both products with equally likely demands: 50, 100, and 150 units,Value of Flexibility,Capacity Chain,10 products/10 plants,No flexibility Each plant builds only one product (product 1 built in plant 1,
9、product 2 in plant 2, etc.). Expected sales 853 units, expected capacity utilization 85.3%. Partial flexibility Each plant can build all 2 products, 10 links between plants Capacity utilization increase to 95%, respectively.,Guidelines for Adding Flexibility,Try to equalize the number of plants (mea
10、sured in total units of capacity) to which each product in the chain is directly connected; Try to equalize the number of products (measured in total units of expected demand) to which each plant in the chain is directly connected; and Try to create a circuit(s) that encompasses as many plants and p
11、roducts as possible.,Conclusions,Advanced technology is only one way of delivering flexibility Flexibility responsiveness may be the most important dimension if market uncertainty is high Flexibility has a proactive function in creating uncertainties that competitors find hard to cope with (satisfying short lead time preference of customers, which they then expect of all c
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