Production Strategies For Customer Order Fulfillment

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Previously, in literature, different production strategies for customer order fulfillment have been discussed. These strategies can be classified as Make-to-Stock (MTS), Make-to-Order (MTO), Assemble-to-Order (ATO) and Engineer to Order (ETO) [42, 43]. These strategies differ with respect to where stock is held in the system and where the production system is decoupled from customer order [44]. The adoption of these strategies depends on the customer’s willingness to wait as discussed by Mather in his P/D ratio, where he compares the production system’s response time (P) to the customers’ willingness to wait (D) [45]. Company’s decision to adopt any of these approaches is of great strategic importance [46] as it strongly affects the way a company carries out its manufacturing planning and control activities [47]. In an ATO environment manufacturers usually keep stock of manufactured standard parts and sub-assemblies that are assembled according to an individual customer’s order. Thus ATO is an order driven production strategy where products are produced once an order is received and shipped immediately thereafter. Previously, it has been also referred to as delayed product differentiation, a form postponement [48], implemented in assembly systems to defer the differentiation of final product configurations. In a mixed-product assembly, the points of product differentiation represent specialization stages in the assembly system where each product starts to develop its own unique identity, thus, becoming differentiated from other variants in the family [49]. In this way a large number of customized products may be assembled from a small set of basic components. However, order-driven production responds to swings in demand and thus ...

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...oint effort of product designers and production engineers. When properly performed, such redesign leads to considerable simplification of the assembly process and reduction in total assembly time [55]. Similarly product modularity has been emphasized as an important enabler that makes the implementation of postponement easier. Product modularity is an attribute of the product system that characterizes the ability to mix and match independent and interchangeable product building blocks with standardized interfaces in order to create product variants [56]. It separates the composition of end products into parts and/or subassemblies that are common and those that are not [57]. The design of products around modular architectures triggers a significant reduction of production lead times since long manufacturing lines can be split into parallel production of modules [58].

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