Blecker, Thorsten and Abdelkafi, Nizar (2006): Variety Management in Assemble-to-Order Supply Chains. Published in: (June 2006): pp. 39-56.
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Assemble-to-order refers to a supply chain strategy in which products are not assembled until customer order arrives. It is based on the so-called form postponement that is to hold components at a generic form and to delay the point of product differentiation. The performance of an assem-ble-to-order supply chain depends on two main dimensions, which are responsiveness and achievement level of scale economies. Responsiveness refers to the capability of fulfilling customer requirements in a fast-paced manner, whereas the achievement of scale economies reflects the degree of operations efficiency. Assemble-to-order supply chains induce high product variety, which has adverse effects on performance. We use demand volumes as a proxy for scale economies and lead times as a proxy for responsiveness. A matrix that consists of both dimensions can be defined, in which we distinguish between short/long lead times and low/high demand volumes. This matrix is called performance matrix. On the other hand, the consequence that results from product variety is a high demand variability of end products, which also affects the demand variability of components. An analysis of component demand variability enables one to identify the components with low/high demand variability. These components can further be classified into supplied and in-house made components. Thus, a second matrix (called component matrix) with two dimensions, namely variability (low/high) and supply source (in-house/supplier) can be defined. Due to the supply source dimension in the component matrix, the supply chain perspective is also taken into ac-count. The combination of both matrixes into a single one provides the performance/component matrix for assemble-to-order supply chains. To use the final matrix, it is necessary to compute lead times, demand volumes and demand variability of the supplied and in-house made components. By plotting the components in the matrix, one can determine the problems induced by variety. In order to improve the performance of the assemble-to-order supply chain, the implementation of variety management strategies is necessary. The identified strategies are: commonality, component families, modularity, and platforms. Based on the performance/component matrix, we discuss how these strategies or a combination of them can contribute to derive recommendations that aim to alleviate variety impacts on the as-semble-to-order supply chain.
|Item Type:||MPRA Paper|
|Institution:||Hamburg University of Technology (TUHH)|
|Original Title:||Variety Management in Assemble-to-Order Supply Chains|
|Keywords:||Assemble-to-order; Supply Chain Management; Variety Management|
|Subjects:||M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M11 - Production Management
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
|Depositing User:||Thorsten Blecker|
|Date Deposited:||11. Oct 2007|
|Last Modified:||12. Feb 2013 19:23|