Industrial Realities

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Sophie NGO

E2E GAME REPORT
Industrial realities

Dr. David NEWLANDS 11/12 S1
Summary

Table des matières
Summary2
INTRODUCTION3
Mass production4
Conditions4
Problems met and assumptions5
The End-2-End Game6
Lean manufacturing6
Conditions and solutions to mass production system problems6
Problems met and assumptions8
The End-2-End Game8
Mass customization9
Conditions and solutions to problems met with JIT9
Problems met and assumptions9
The End-2-End Game10
RECOMMENDATIONS FOR THE GAME10
conclusion10
references10

INTRODUCTION

We saw last year the evolutions of operations management over time. Today, we are studying the evolutions in production processes.

With the Industrialisation era began the mass production era. Introduced by Taylor in the very beginning of the 20th century, the divisions of tasks were completed by the assembly line of Ford.

After the glorious thirty in the early 70s, Ohno came up with a more productive and a more diversified production system, the Just-In-Time production system.

The ITC era brought western societies a whole new way of consuming and of defining their needs and wants. The western consumer has become more individualist and wants to differentiate him/herself with exclusive products. In 1995 started the mass customization era.

In this reports, I will define more precisely those systems, highlight the problems they generated and how they responded to one another by illustrating my arguments with the example of the End-2-End Game.

Mass production

Mass production is a manufacturing system in which the manufacturer provides very large quantities of standardized products. Also known as repetitive line production, mass production highly uses assembly lines in order to be the most productive as possible. Introduced in the early 20th century by Henry Ford, mass production focuses on reducing costs by making economies of scale.

Conditions

Mass production is used in the Industry, when the manufacturer provides standardized products responding to an important demand. Indeed, this method has to be profitable in order to operate well. Manufacturing large quantities of a product means investing a lot on machines, plants (manufacturing plant, storehouse, distribution centre, and warehouse) transportations (in terms of people and facilities) and human resources (consultants, checking person, employees, and executives). That is why a company using mass production has to operate on a very large market.

Of course these investments depend on the “make-or-buy” decision made by the company. The “make-or-buy” decision requires lots of calculations in order to determine whether the company should make the component X of a product or buy it from a supplier.

Mass-producing involves using Material Requirements Planning. Indeed, mass production being a push system (pushes supply towards the market), it needs to forecast its potential demand. Forecasting general demand implies planning the material requirements in order to produce enough to cover this demand, even though extra producing. MRP is a very interesting tool to use when forecasting demand and scheduling what one needs when one needs it.

Problems met and assumptions

Although mass production looks interesting in terms of cost savings it is not. Indeed, mass production implies lots of wastes, costs and problems.

One of the most important is about inventories. Indeed, producing before selling implies forecasting. If the forecasts don’t occur, the manufacturer registers increases in stocks, which are expensive. They imply storehousing, uncertainty of being sold, and result in an increase of inventories and thus a lower profit in the P&L account. On the other hand, the production of the manufacturer might not be enough to cover the whole demand of the market that would then buy the product at a competitor and have our manufacturer...
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