The flexibility of production processes: a general framework
Management Science
Principles on the benefits of manufacturing process flexibility
Management Science
Optimizing Strategic Safety Stock Placement in Supply Chains
Manufacturing & Service Operations Management
Newsvendor Networks: Inventory Management and Capacity Investment with Discretionary Activities
Manufacturing & Service Operations Management
Process Flexibility in Supply Chains
Management Science
Managing Flexible Capacity in a Make-to-Order Environment
Management Science
Computers and Industrial Engineering
Improving process flexibility through products assignment with bill of material constraints
Robotics and Computer-Integrated Manufacturing
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As manufacturers in various industries evolve toward predominantly make-to-order production to better serve their customers needs, increasing product mix flexibility emerges as a necessary strategy to provide adequate market responsiveness. However, the implications of increased flexibility on overall system performance are widely unknown. We develop analytical models and an optimization-based simulation tool to study the impact of increasing flexibility on shortages, production variability, component inventories, and order variability induced at upstream suppliers in general multiplant multiproduct make-to-order manufacturing systems. Our results show that 1. Partial flexibility leads to a considerable increase in production variability, and consequently in higher component inventory levels and upstream order variability. Although a modest increase in flexibility yields most of the sales benefits, production variability is reduced as more flexibility is added to the system. Consequently, investments in additional flexibility may be justified when component inventories are expensive, or simply by the benefits associated with the smoother production. 2. The performance of flexible systems is highly dependent on the capacity allocation policies implemented. Policies that evenly distribute product demands to the available plants lead to consistently better performance because they avoid the misplacement of inventories by replicating the performance of a single-plant system. These insights and the simulation tool can be used by practitioners to guide the design of their flexible production systems, trading off the initial capital outlay versus the sales benefits and the expected operational costs.