Supply Chain Integration - Krajewski - Summary and Important Points

12th Edition Operations Management

Learning Goals -Supply Chain Integration

Supply Chain Disruptions 

• Identify the major causes of disruptions in a supply chain.

Subsystems of Integrated Supply Chain

New Service or Product Development Process

• Describe the four major nested processes in the new service or product development process.

Supplier Relationship Process 

• Explain the five major nested processes in the supplier relationship process and use total cost analysis and preference matrices to identify appropriate sources of supply.

Order Fulfillment Process

• Identify the four major key nested processes in the order fulfillment process and use the expected value decision rule to determine the appropriate capacity of logistic resources.

Customer Relationship Process 

• Define the three major nested processes in the customer relationship process.

Supply Chain Risk Management 

• Explain how firms can mitigate the operational, financial, and security risks in a supply chain.

Chapter Contents - Important Points - Supply Chain Integration

Brief Note on Coral Princess Supply Chain

Supply chain integration is the effective  coordination of supply chain processes through the seamless flow of information up and down the  supply chain. Supply chain integration provides each member of the supply chain visibility into the capacities and inventories of other members of the supply chain to aid in planning and scheduling. It facilitates collaboration between firms in a supply chain. It is part of supply chain design and operation activities of  supply chain management and it helps in reducing the risks of supply disruption by pointing out likely trouble points quickly giving time to identify and activate alternate supply sources and paths.

Supply Chain Disruptions 
Causes of Supply Chain Disruptions
Supply Chain Dynamics
Integrated Supply Chains

Supply chains which are more complex and global and are exposed to both domestic and international disruptions. An inability to supply to agreed orders or to stock points occurs due to the failure of any supply chain partners to supply the goods or services as per plan. Supply chain disruptions could result in cost increases, loss of reputation, civil and criminal penalties, bankruptcy, lost customers, or reduced revenue, profit, and market share.

In earlier days, it was observed that in supply chains from retailer to the assembler or from assembler to component and raw material suppliers,  the variability in order quantities increase as one  proceeds upstream. This increase in variability is referred to as the bullwhip effect, which gets its name from the action of a bullwhip—the handle of the whip initiates the action; however, the tip of the whip experiences the wildest action.A firm contributes to the bullwhip effect in a supply chain if the variability of the orders to its suppliers exceeds the variability of the orders from its immediate customers. An objective of supply chain integration is to reduce bull whip effect to zero. Relatively stable safety stocks  reduce bull whip effect.

Integrated Supply Chain: The SCOR model focuses on a basic supply chain of  plan, source, make, deliver, and return processes, repeated again and again along the supply chain. The SCOR model also stresses that the design of an integrated supply chain is complex and requires a process view.  The process design insights must be applied to the new service or product development, supplier relationship, order fulfillment, and customer relationship processes of the supply chain within a firm and across the supply chain to increase coordination. As it is stated integration is effective coordination.

Read the summary of Supply Chain Coordination Chapter from Chopra and Meindl

Additive Manufacturing 
Supply Chain Implications of AM
Enablers of Adopting AM

Additive manufacturing is a disruptive technology for supply chains.

Supply Chain Implications of AM
1. Reduced material inputs:  Lockheed martin used 33 pounds of initial metal in the shape it used to produce a 1-pound final component.  Using AM, it used approximately 1-pound only to produce that component. Using AM, Lockheed Martin was also able to reduce the weight of a satellite.
(See http://www.lockheedmartin.com for more details.)

2. Simplified production
3. Production and Supply Chain Flexibility
4. Decentralized, Distributed Production Networks



New Service or Product Development Process
Design
Analysis
Development
Full Launch

Competitive priorities demand that managers plan and develop services and products that customers need and want. Development of new products and  services are essential to the long-term survival and growth of the firm. New product refers to both brand new products or major changes to existing  products. The new service or product development process is included as a process of importance in a firm’s supply chain because it defines the nature of the materials, services, and information flows the supply chain must support.

There are four key stages, in the new product development process: design, analysis, development, and full launch.

Design: The  corporate product strategy of the firm defines the facilities and flow requirements for the firm’s supply chain. The corporate strategy specifies the products and the segments of the  markets in which the firm wishes to compete. In the design stage, ideas for new offerings are proposed. These ideas specify how the customer connects with the service or manufacturing firm, the benefits and outcomes for the customer.  Proposals also specify how the new offering will be produced and delivered—an important consideration for the supply chain. These proposals indicate the  choice of raw materials, degree of modularity in the design, the nature of the logistical services needed to get the service or product to market. The inputs of many designers, engineers, suppliers, supply chain managers, and potential customers in this stage can avoid costly mistakes.

Analysis: The second stage, analysis, involves a critical review of the new offering  to make sure that it fits the corporate strategy in product terms and production process terms.  It is compatible with regulatory standards, presents an acceptable market return and risk by satisfying  the needs of the intended customers. The resource and skill requirements for the new offering must be examined from the perspective of the resource and core capabilities of the firm and its supply chain and the need to acquire additional resources.  If the analysis concludes that the new offering has good market potential and that the firm has existing capability or the potential to acquire it, the  authorization is given to proceed to the next stage.

Development: The third stage, development, brings more specificity to the new offering. The engineers is extended to embodiment, prototypes and detailed engineers and process plans.  Once the process plan is specified and the capability of the processes verified, the new product marketing program can be initiated designed. 

Full Launch: The final stage, full launch, involves the coordination of many internal processes as well as those both upstream and downstream in the supply chain. Promotions for the new offering must be initiated, sales personnel briefed, distribution processes activated, and old services or products that the new offering is to replace withdrawn.  Flexibility in the supply chain is a desirable attribute during the ramp-up period. A post launch review should compare the competitive offering of the supply chain to its competitive capabilities and market priorities, to signal a need to finetune  the original product idea and the supply chain activities. The review should be based on input or feedback from customers.

(Detailed notes on product development process. Product design and Development, Production Technology and Process Planning are included in September Industrial Engineering Revision Plan.) 

Supplier Relationship Process 
Sourcing
Design Collaboration
Negotiation
Managerial Practice
The Consequences of Power in an Automotive Supply Chain
Buying
Information Exchange


The supplier relationship process focuses on the interaction of the firm with upstream suppliers,
and includes five major nested processes: (1) sourcing, (2) design collaboration, (3) negotiation, (4) buying,  and (5) information exchange.

In  many firms, these processes are the organizational responsibility of the purchasing department, which  decides the suppliers to use, negotiates contracts, maintains information flows.

Sourcing: The sourcing process is involved in the selection, certification, and evaluation of suppliers.  A starting point for selecting suppliers is to perform a total cost analysis. There are four key costs:  Material costs,  Freight costs. Inventory costs and Administrative costs. While total cost is an important consideration, other performance dimensions like the quality of a supplier’s materials and processes,  lead times and on-time delivery performance are also to be considered in selection decision.

Supplier Certification programs verify that potential suppliers have the capability to provide the services or materials the buying firm requires. ISO 9001:2008 is one such program;

Design Collaboration: The process focuses on jointly designing new services or products with key suppliers. It facilitates early involvement of suppliers in the concurrent engineering of the new service/product development.  This process seeks to eliminate costly delays and mistakes incurred by ignoring the information available with suppliers.

Negotiation: The negotiation process focuses on obtaining an effective contract that meets the price, quality, and delivery requirements of the supply chain from each partner.

Cooperative Orientation The cooperative orientation emphasizes that the buyer and the seller are partners, each helping the other as much as possible. A cooperative orientation means long-term commitment, joint work on quality and service or product designs, and support by the buyer of the

supplier’s managerial, technological, and capacity development.

Buying: The buying process relates to the actual procurement of the service or material from the supplier. This process includes the creation, approval and  management of purchase orders.

Read Summary of Sourcing Decisions Chapter - Chopra and Meindl

Order Fulfillment Process
Customer Demand Planning
Supply Planning
Production
Logistics


The order fulfillment process produces and delivers the service or product to the firm’s customers.
Four key nested processes are in it: (1) customer demand planning, (2) supply planning, (3) produc tion, and (4) logistics.

Customer Demand Planning:

The customer demand planning (CDP)  is a planning process that involved sales teams (and customers) and uses past data to develop demand forecasts as input to  production and inventory planning, and revenue planning. Forecasts help to make planning decisions on staffing levels, purchasing commitments.

Supply Planning: The supply planning process takes the demand forecasts produced by the customer demand planning process, the customer service levels and inventory targets provided by inventory management, and the resources provided by sales and operations planning to generate a plan for supply chain to meet the demand. Supply plans at both the aggregate and detailed levels are to be made.

Production: The production process executes the supply plan to produce the service or product. Nonetheless, the production process must be integrated with the processes that supply the inputs, establish the demands, and deliver the product to the customers. The best firms tightly link their production process to suppliers as well as customers.

Logistics: A key aspect of order fulfillment is the logistics process, which delivers the product or service to the customer. Five important decisions in  logistics processes are: (1) degree of ownership, (2) facility location, (3) mode selection, (4) capacity level, and (5) amount of cross-docking. Warehouses and transport equipment are part of the facilities in logistic process.

Mode Selection. The five basic modes of transportation are (1) truck, (2) train, (3) ship, (4) pipeline,
and (5) airplane.

Cross-Docking. Low-cost operations and delivery speed can be enhanced with a technique called cross-docking, which is the packing of products on incoming shipments so that they can be easily sorted at intermediate warehouses for outgoing shipments based on their final destinations and despatched without being stored in inventory at the warehouse. The cross dock warehouse becomes a short-term staging area for organizing efficient shipments to customers. 

Customer Relationship Process 
Marketing
Order Placement
Customer Service

The purpose of the customer relationship process, which supports customer relationship management (CRM) programs, is to identify, attract, and build relationships with customers and to facilitate the transmission and tracking of orders. Key nested processes include the marketing, order placement, and customer service processes.

Marketing: The marketing process  determines the customers to target, how to target them, what services or products to offer and how to price them, and how to manage promotional campaigns. There are now e-commerce technologies  to facilitate the mar keting process.

Order Placement: The order placement process involves the activities required to execute a sale, register the specifics of the order request, confirm the acceptance of the order, and track the progress of the order until it is completed. Traditionally sales force personnel used to take orders. Some firms used mail order also.  The Internet enables firms to reengineer their order placement process to benefit both the customer and the firm.

Customer Service: The customer service process helps customers with answers to questions regarding the service or product, resolves problems, and, in general, provides information to assist customers. It is an important point of contact between the firm and its customers, who may judge the firm on the basis of their  experiences with this process.

Supply Chain Risk Management 
Operational Risks
Financial Risks
Security Risks
Performance Measures


Supply chain risk management focuses on managing the risks posed by any factor or event that can materially disrupt a supply chain.

Operational Risks
Operational risks are threats to the effective flow of materials, services, and products in a supply chain. The following options reduce the risk for operational disruptions and also minimize the bullwhip effect in supply chains.
▪ Strategic alignment— make sure that all partners adhere to priorities
▪ Upstream/downstream supply chain integration—working closely with customers and suppliers in
CDP and  improve information flows.
▪ Visibility— To facilitate visibility at all levels in the supply chain, point of-sale (POS) data, which records actual customer purchases of the final service or product, can be shared with all suppliers.
Flexibility and redundancy—develop the right level of flexibility and redundancy across the supply
chain to be able to absorb disruptions. .
▪ Short replenishment lead times allow the firm to react quickly to a change in demand levels.
▪ Small order lot sizes—working on ways to reduce the costs associated with ordering, transporting and receiving inventory throughout the supply chain will reduce order lot sizes and  the amount of fluctuation in the size of orders.
▪ Rationing short supplies—suppliers can ration short supplies to customers on the basis of their past sales, rather than their current orders.
▪ Everyday low pricing (EDLP)—promotional or discount pricing encourages spikes in demand.
▪ Cooperation and trustworthiness—increases compliance to supply chain priorities.

Financial risks are threats to the financial flows in a supply chain, such as prices, costs, and profits.  When commitment to supply are made at a certain price at the time of booking the order, factors outside of the control of firms  may threaten the profitability of the firm. The approach to protect against financial risks is called hedging, which is a supply chain risk management strategy used in limiting or offsetting the probability of loss from fluctuations in the prices of commodities or currencies. Hedging is a transfer of risk through insurance policies or through markets for hedging for futures or options. Operations  across facilities in different regions of the world tend to decrease the risk to the supply chain due to country risks and exchange rate risks. 

Security risks are threats to a supply chain that could potentially damage facilities, or operations; destroy the integrity of a business; and jeopardize its continuation. The actions to neutralize the threats are required. A supply chain is secure when it can fend off unauthorized acts that are designed to cause intentional harm or damage to the supply chain and the materials (human and otherwise) that flow through its processes.

It is important to monitor the performance of supply chains to see where improvements can be made and also to measure the impact of disruptions. Supply chain managers monitor performance by measuring costs, time, quality, and environmental impact of the supply chain.

Learning Goals in Review

Video Case Sourcing Strategy at Starwood
Case Wolf Motors


Ninth Edition - Chapter 10 Supply Chain Integration
https://books.google.co.in/books?id=2rpbFaTkeN4C&pg=PA354#v=onepage&q&f=true

PART III: MANAGING SUPPLY CHAINS - Krajewski 12 Edition Chapters

12. Supply Chain Design

13. Supply Chain Logistic Networks

14. Supply Chain Integration

15. Supply Chain Sustainability

Supply Chain Management: Chopra and Meindl's Book Chapters - Important Points

Top Global Companies for Supply Chain Excellence - Supply Chain Strategies and Initiatives
https://nraomtr.blogspot.com/2019/05/top-companies-for-supply-chain.html

Index to Summaries of all Chapters of Krajewski's Book

Operations Management - Krajewski - 12th Edition - Chapter Summaries - Important Points



Updated on 31 August 2019,  29 August 2019, 24 July 2017

Supermarket Design for Lean Manufacturing Process

Understanding lean manufacturing process is easy if the supermarket system of provisioning components for assembly is explained first.

An assembly line is provided with a supermarket of components and whatever components it requires to produce the assemblies based customer orders given to them can be taken from the supermarket. A supermarket that works with one day inventory will have enough inventory to manufacture any product from the variety it assembles up to the maximum quantity specified for a day. Thus the supermarket actually has more days of inventory for all the products summed together. But for any one product it has only a day's inventory. The inventory is decided by the system design.

From the supermarket, as components are removed Kanbans become released for the part or component making department to produce and replenish the consumer parts. The capacity of the component making department is such that it can produce the component and keep it in stock by next day morning or actually by the end of the day so that assembly has full supermarket at its disposal the next day. One can think of a supermarket for materials for the component making department also. Thus a lean process contains supermarkets and production facilities. We can think of supermarkets in the supply chain.

https://books.google.co.in/books?id=kttGAwAAQBAJ&pg=PA192#v=onepage&q&f=false

Add Lean to Types of Manufacturing Processes

Manufacturing Processes are classified into four presently.

Job - Batch - Line - Continuous flow.  - Refer: Krajewski Operations Management

Lean has to be added as the fifth manufacturing process. Lean is a line manufacturing process for multiple products with batch sizes approaching one.

Hence manufacturing processes are to be given as

Job - Batch - Line - Lean - Continuous flow  (29 August 2019)


How to create a Lean Process. Step by Step.
https://www.whatislean.org/lean-process/

TEN KEY TECHNOLOGIES FOR LEAN PROCESS IMPROVEMENT
https://www.isixsigma.com/methodology/lean-methodology/ten-key-technologies-lean-process-improvement/

Lean Process Requirements
https://link.springer.com/chapter/10.1007/978-3-319-17410-5_4

LEAN PROCESS OPTIMIZATION FEATURES
https://positka.com/lean-process-optimization/

Supply Chain Sustainability - Important Points - Summary - Krajewski - 12th Edition

Learning Goals

The Three Elements of Supply Chain Sustainability 
 Define the three elements of supply chain sustainability.

Reverse Logistics 
Explain the reverse logistics process and its implications for supply chain design.

Energy Efficiency
Show how firms can improve the energy efficiency of their supply chains by using the nearest neighbor (NN) heuristic for logistics routes and determining the effects of freight density on freight rates.

Disaster Relief Supply Chains
Explain how supply chains can be organized and managed to support the response and recovery
operations of disaster relief efforts.

Supply Chain Ethics 
Describe the ethical issues confronting supply chain managers.

Managing Sustainable Supply Chains
Explain how a firm can manage its supply chains to ensure they are sustainable



15 SUPPLY CHAIN SUSTAINABILITY

FedEx


Achieving sustainability throughout the supply chain  requires cross-functional and inter-firm cooperation to achieve:
▪ Environmental protection—by steps to reduce  waste and use proper waste disposal methods  to reduce the pollution of the air, streams, and rivers, and to increase efforts at ecological stewardship for the protection of flora and fauna.
▪ Productivity improvement—by productivity analysis and engineering of  processes in the upstream and downstream of the supply chain to increase material conservation, to increase energy efficiency,
and to look for ways to convert waste into useful by-products.
▪ Risk minimization— take  care to ensure that the materials that go into the services, products, or processes do not pose health or safety hazards to customers.
▪ Innovation— new services, products, or technologies are to be designed and developed, to support financial, environmental, and social responsibilities while delivering business revenues.

The Three Elements of Supply Chain Sustainability 

Financial, environmental, and social responsibilities

Reverse Logistics 
Supply Chain Design for Reverse Logistics
Financial Implications

Reverse logistics  is the process of planning, implementing, and controlling the efficient, cost effective flow of products, materials, and information from the point of consumption back to the point of origin for returns, repair, remanufacture, or recycling. A supply chain that integrates forward logistics with reverse logistics is called a closed-loop supply chain. It takes care of complete chain of operations from the birth to the death of a product.

Reverse logistics operations are considerably different from the forward logistics flows, and it is several times more expensive. There have collection points to receive the used goods from the final customer and transport the goods to a returns processor,  a facility owned by the manufacturer or a supply partner.  The items are to be examined and the item  could be repaired and returned to the customer. It may be cleaned and refurbished for direct use and returned either to the distribution channel. It may be given back  to customers in case of items under  warranty. The product could be remanufactured by tearing it down and , rebuilding it with some new parts as needed, and returning it to the distribution channel. The product could be completely disassembled and the usable parts are retrieved.Other parts are sent for material recovery centers. There are two important by-products of the reverse logistics process: waste, which must be properly disposed of, and product information, which has to captured and  transmitted to the product development process so that improvements can be made to future generations of the product.

Energy Efficiency
Transportation Distance
Freight Density
Transportation Mode


Supply chains transport of  materials, parts and products  from their origination to supply chain partner factories and facilities and finally to their ultimate destination of customer homes.
Transportation consume energy and it has  negative effects on the environment. The negative effect is indirectly expressed through carbon footprint, which is the total amount of greenhouse gasses produced to support the transport operations or production operation usually expressed in equivalent tons of carbon dioxide CO2. Major contributors to carbon footprints are burning of fossil fuels, in particular oil, diesel, and gasoline used in transport vehicles.Therefore, firms have to take steps to reduce energy consumption in transport through three levers: (1) transportation distance, (2)freight density, and (3) transportation mode.


Supply chain managers can decrease the amount of energy consumed in moving materials or supplying services by reducing the distance traveled in  two ways. The first  way is locating service facilities or manufacturing plants in close proximity to customer populations to reduce the distance required to supply the service or product. The second way to improve energy efficiency involving transportation distances is route planning and optimization to find the shortest route to deliver a service or product to all the customer points.

Firms can increase the freight density and increase transport vehicle space utilization by reducing the volume of packaging, redesigning the product to take less volume, or postponing the assembly of the product until the customer takes possession

The four major modes of transportation are (1) air freight, (2) trucking, (3) shipping by water, and (4)
rail. From an energy perspective, air freight and trucking are much less efficient than shipping or rail.
On average, railroads are three times more fuel efficient than trucks.  The EPA also considers railroads best when it comes to noxious emissions per ton-mile.



Disaster Relief Supply Chains
Organizing for Disaster Relief
Managing Disaster Relief Operations
Managerial Practice 15.1 Using Drones in Disaster Relief

Supply chain managers can link disaster relief headquarters with the operations in the field both on supply (procurement) side and distribution side. Disaster relief organizations need to use the services of  supply chain managers.

The life cycle of disaster relief supply chains has five stages: (1) Early needs assessment; (2) development of the initial supply chains for flexibility; (3) speedy distribution of the supplies
to the affected region based on forecasted needs; (4) structuring of the more stable supply chain as
time progresses and arranging supplies on a fixed schedule basis; and (5) dismantling the disaster supply chain.

In firms supplying through disaster supply chains, supply chain managers who understand the implications of the disaster relief life cycle can mitigate its effects on their firm’s operations while doing their best to support the relief agency’s goals

Supply Chain Ethics 
Buyer–Supplier Relationships
Facility Location
Inventory Management

Social Accountability International is an organization dedicated to defining and verifying the implementation of ethical workplaces in business firms. It  has compiled SA8000:2014, a  standard covering nine dimensions of ethical workforce management:


1. Child Labor: Do not employ underage workers (under 15 years of age).
2. Prohibit the use of forced or compulsory labor, including prison or debt bondage labor in the firm as well as in supply chain firms.
3. Provide a safe and healthy work environment.
4. Respect the right of employees to form and join trade unions and bargain collectively.
5. Do not allow discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age. Take steps to see that there is no sexual harassment.
6. Disciplinary Practices: Do not use  corporal punishment, mental or physical coercion, or verbal abuse.
7. Working Hours: Do not ask or force workers to work more than 48 hours per week with at least 1 day off for every 7-day period.  Overtime time hours are to be paid as per  the collective bargaining agreement.
8. Remuneration: Pay wages for a standard work week such that they meet the legal standards and are sufficient to meet the basic need of workers and their families.
9. Management Systems Firms must go beyond simple compliance to integrate the standard into their management systems and practices.

Once certified, firms need to get recertified every three years.  Preferential treatment of sup pliers because of friendships, family ties, or investment in the supplier should be avoided. Buyers should
be candid when negotiating contracts.   Gratuities to the buyer should be limited or excluded.

Unethical activities to be avoided:
▪ Revealing confidential bids and allowing certain suppliers to rebid
▪ Making reciprocal arrangements for purchasing from each other.

Managing Sustainable Supply Chains

1. Define what “sustainability” means for the firm in clear terms and explain it to all internal and external partners in the supply chain.  SA8000:2014 can be used as a guideline for workplace issues.

2. Use the supply chain sustainability framework as a foundation and gather data on the performance of current suppliers and evaluate and do modifications in the processes as required. Use the same questionnaire to screen potential new suppliers. 

3. Require compliance to the sustainable supply chain framework across all business units and current suppliers and future suppliers.  

4. As a part of directing function of management  utilize all available ethical means to influence their 

behavior.

5. Create periodic reports on the impact the supply chain has on sustainability and take control actions as required..

Learning Goals in Review

Video Case Supply Chain Sustainability at Clif Bar & Company

PART III: MANAGING SUPPLY CHAINS - Krajewski 12 Edition Chapters

12. Supply Chain Design

13. Supply Chain Logistic Networks

14. Supply Chain Integration

15. Supply Chain Sustainability

Supply Chain Management: Chopra and Meindl's Book Chapters - Important Points

Index to Summaries of all Chapters of Krajewski's Book

Operations Management - Krajewski - 12th Edition - Chapter Summaries - Important Points

Supply Chain Logistic Networks - Important Points - Summary - Krajewski - 12th Edition

Learning Goals - Supply Chain Logistic Networks

•  Identify the factors affecting location choices.
•  Find the center of gravity using the load–distance method.
•  Use financial data with break-even analysis to identify the location of a facility.
•  Determine the location of a facility in a network using the transportation method.
•  Understand the role of geographical information systems in making location decisions.
•  Explain the implications of centralized versus forward placement of inventories.
•  Use a preference matrix to evaluate proposed locations as part of a systematic location selection process.

Chapter Contents and Important Points

13 SUPPLY CHAIN LOGISTIC NETWORKS

Airbus SAS

Facilities create the logistic network. Facility location is the process of determining geographic sites for a firm’s operations, which could include manufacturing plants,  distribution centers, and customer service centers.  Location choices can be critically important for firms and have a profound impact on the strategic design of its supply chains. The location of  a business’s facilities has a significant impact on the company’s operating costs, the prices it charges  for services and goods, and its ability to compete in the marketplace and penetrate new customer segments.

When locating new marketing related facilities, marketing must carefully assess how the location will appeal to customers and possibly open up new markets.

Factors Affecting Location Decisions 

Dominant Factors in Manufacturing

The following seven groups of factors dominate the decisions
1. Favorable Labor Climate,2. Proximity to Markets, 3.Impact on Environment, 4. Quality of Life, 5.Proximity to Suppliers and Resources, 6. Proximity to the Parent Company’s Facilities, and 7. Utilities, Taxes, and Real Estate Costs

Dominant Factors in Services

The factors important for manufacturers are also relevant  to service providers. But for those service providers with considerable customer contact, factors related to customer convenience  and customer satisfaction are also to be considered as they affect sales. These factors are: Proximity to Customers, Transportation Costs and Proximity to Markets, Location of Competitors, and Site-Specific Factors.

Load–Distance Method
Distance Measures
Calculating a Load–Distance Score
Center of Gravity

Attractive candidate locations identified using the factors listed above have to be  must be identified and compared on the basis of quantitative factors. The load–distance method is a quantitative measure. Several location factors indicated above relate directly to distance: proximity to markets, average distance to target customers, proximity to suppliers and resources, and proximity to other company facilities. The load–distance approach assumes that there is only one facility to be located to  serve a predetermined set of nodes (customers, suppliers) in a logistic network, and it is independent of any other facility that may be in the network. The objective is to select a location that minimizes the sum of the loads from the facility to each node, multiplied by the distance between the facility and the node. Instead of distance, time may be used. 

For a rough calculation, Euclidean distance, the straight-line distance, or shortest possible path, between two points, facility and the node is used.  Rectilinear distance measures the distance between two points with a series of 90-degree turns, as along city blocks.

The coordinates of the location at the center of gravity of a set of nodes can be calculated mathematically to identify good locating points for a facility to serve those nodes. The center of gravity location generally is not the optimal one for the distance measure, but it  is an excellent starting point to generate candidate locations for the load distance evaluation.

Break-Even Analysis
Transportation Method
Setting Up the Initial Tableau
Dummy Plants or Warehouses
Finding a Solution

Break-even analysis can help a manager compare location alternatives based on the  total cost estimated for each location. Given a set of potential locations for a facility, break-even analysis is particularly useful when the manager wants to define the ranges of volume over which each alternative is best.

The transportation method of operations research is a quantitative approach that can help solve multiple-facility volume allocation problems. We use it to determine the allocation pattern that minimizes the cost of shipping products from two or more plants, or sources of supply, to two or more warehouses, or destinations. The transportation problem solution gives us an estimate of the volume allocated to a particular location. 

Geographical Information Systems 
Using GIS
Managerial Practice
Using GIS to Find Locations for Fast-Food Restaurants
The GIS Method for Locating Multiple Facilities

A geographical information system (GIS) is a system of computer software, hardware, and data that the firm’s personnel can use to manipulate, analyze, and present information relevant to a location decision. A GIS can create a visual representation of a firm’s location choices. It can be used to (1) store databases, (2) display maps, and (3) create models that can take information from existing datasets, apply analytic functions, and write results into newly derived datasets. These three functionalities are critical parts of an intelligent GIS and are used to a varying extent in all GIS applications

A GIS is a really useful decision-making tool because many of the decisions made by businesses
today have a geographical aspect.

Inventory Placement 


The issue for a  firm producing standardized products is where to position the finished goods inventory in the supply chain. At one extreme, the firm could use centralized placement and supply goods from there to the retailer.

Another approach is to use forward placement, which means locating stock closer to customers at a warehouse, DC, wholesaler, or retailer.

As transportation costs become cheaper compared to inventory holding cost at remote locations, central inventory or inventory consolidation can be increased. As a process improvement exercise, industrial engineers or productivity improvement executives have to make efforts to reduce both transportation costs and warehousing costs.

A Systematic Location Selection Process

1. Identify the location factors important for the decision and categorize them as dominant or secondary.
2. Consider alternative regions; then narrow the choices to alternative communities and finally to
specific sites.
3. Collect required data (costs and facilities) related to the alternative locations from location consultants, state development agencies, city and county planning departments, chambers of commerce, land developers, electric power companies, banks, and onsite visits. Some of the data  may be available in the GIS database.
4. Analyze the data collected, based on qualitative factors.  From the set of locations remaining do quantitative analysis load distance method and total cost method.

5. Bring the qualitative factors pertaining to each site into the evaluation once again. This time take into consideration the view of the persons who have a stake in the location decision.  What is important in one situation may be unimportant or less important in another. What is important for one person may be unimportant for another. Develop a weighted average qualitative score. The site with the highest weighted score is best as a multi-criteria based decision.

Learning Goals in Review

Video Case Continental Tire: Pursuing a Winning Plant
Decision
Case R.U. Reddie for Location


Network Design Chapter from Chopra and Meindl

PART III: MANAGING SUPPLY CHAINS - Krajewski 12 Edition Chapters

12. Supply Chain Design

13. Supply Chain Logistic Networks

14. Supply Chain Integration

15. Supply Chain Sustainability

Supply Chain Management: Chopra and Meindl's Book Chapters - Important Points

Index to Summaries of all Chapters of Krajewski's Book

Operations Management - Krajewski - 12th Edition - Chapter Summaries - Important Points

Supply Chain Design - Important Points - Summary - Krajewski - 12th Edition

Chapter 12 Supply Chain Design

Learning Goals

Explain Strategic importance of supply Chain design

Supply Chains for Services and Manufacturing

Identify the nature of supply chains for service providers as well as manufacturers

Measuring Supply Chain Performance

Calculate the critical supply chain performance measures

Explain how efficient supply chains differ from responsive supply chains and the environment best suited for each type of supply chain.

Explain the strategy of mass customization and its implications for supply chain design

Outsourcing Processes, Vertical Integration. Make or Buy Decisions

Analyze a make or buy decision using break-even-analysis

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A supply chain is the interrelated series of processes within a firm and across different firms that produces a service or product to the satisfaction of customers. More specifically, it is a network of service, material, monetary, and information flows that link a firm’s customer relationship, order fulfillment, and supplier relationship processes to those of its suppliers and customers.

Supply chain is responsible for customer satisfaction through its supply of products and services.

Supply chain management, the synchronization of a firm’s processes with those of its suppliers and customers to match the flow of materials, services, and information with demand, is an important management task in most organizations. A key part of supply chain management is supply chain design. The design of the supply chain has to enable the firm to meet the competitive priorities of the 

firm’s operations strategy.

Creating an Effective Supply Chain

An effective supply chain can be created by the recognition of external competitive pressures and judgments  sales, marketing, and product development departments regarding possible alternatives that are technically and financially feasible for the organization.

These pressures or trends that are to be recognized in the environment are: (1) dynamic sales volumes (periodic changes in demand), (2) customer service and quality expectations (they are increasing and customers are willing to pay competitive rates), (3) service/product proliferation (number of products and services to be offered by a firm are increasing), and (4) emerging markets (new consumption and supply locations are changing the market positions).

Supply Chains for Services and Manufacturing

Every firm or organization is a member of some supply chain.

The supply chain design for manufacturers has to focus on control of inventory by managing the quantities in the flow of materials. The typical manufacturer spends more than 60 percent of its total income from sales on purchased services and materials, whereas the typical service provider spends only 30 to 40 percent. 

Measuring Supply Chain Performance

Supply chains are to be designed for a specified performance which can be measured. Managers need performance measures to assess the implications of changes to supply chains. Inventory measures and financial measures are used to monitor supply chain performance and evaluate alternative supply chain designs.


1. Average aggregate inventory value = average inventory of each SKU multiplied by its value,
summed over all SKUs held in stock.

2. Weeks of supply = Average aggregate inventory value/Weekly sales (at cost)

3. Inventory turnover = Annual sales (at cost)/Average aggregate inventory value

Strategic Options for Supply Chain Design

A supply chain is  a network of firms. Each firm in the chain has to  design its own supply
chain.  Two distinct designs are available as strategic options:  efficient supply chains and responsive supply chains.

Efficient Supply Chains
Efficient supply chain design can be used in case of items with highly predictable demand (low forecast error). Many essential items of daily consumption have predictable demands. Ex: Food items, toiletries etc.

Made to stock production is the popular design for efficient supply chains.

Make-to-stock (MTS): The product is produced in response to  a sales forecast and sold to the customer from a finished goods stock through a retailer. The focus of the MTS supply chain is on efficient service, material, monetary, and information flows; and keeping inventories to a minimum in the supply chain. There is intense competition in these products and price becomes market winner. Contribution margins are low, hence efficiency is important to remain profitable in the business. Efficient supply chains are used wherein the competitive priorities are consistent quality and on-time delivery on the customer side and low-cost operations on the firm side.

Responsive Supply Chains

Responsive supply chains are designed to react quickly and service markets profitably even though they are uncertainties in demand. They work best when firms offer a great variety of services or products and demand predictability is low.

There are three types of designs for responsive supplychain: .Assemble-to-order (ATO):, Make-to-order (MTO):, and Design-to-order (DTO)

Mass Customization

A mass customization strategy when pursued in production and marketing  has three important competitive advantages.

Customer Relationships. Mass customization is based on detailed inputs from customers or data of customer behavior. The objective is to produce and deliver a product that satisfies the unique desires of a customer. By collecting data systematically and continuously, the firm can learn a lot about its customers. A significant competitive advantage is realized through this accumulated data and  the close customer relationships based on a strategy of mass customization.

Finished Goods Inventory. In mass customization, the final product is produced to a customer’s order and it is more efficient than producing to a forecast because forecasts are not perfect. The process has to be designed to have everything needed to produce the order quickly once it is received and the specification of the item is given.

Increase in Value of Services or Products. With mass customization, consumer often see  a higher value for the product in comparison to a standard product. This perception gives higher revenue to firms and provides  a bigger margin.

Outsourcing Processes, Vertical Integration. Make or Buy Decisions

How many of the processes involved in producing a saleable product or service should a firm own and operate? The answer to the question determines the extent of the firm’s vertical integration. The more processes  the organization performs itself, the more vertically integrated it is. If it does not perform some processes itself, it has to outsource them. It has to employ suppliers and distributors to perform those processes and provide needed services and materials.

What prompts a firm to outsource? It is the realization that another firm can perform the outsourced process more efficiently and with better quality than it can. Therefore external suppliers are added to the supply chains and internal suppliers (sections/shops/departments) are reduced.

Offshoring is a supply chain strategy that involves moving processes to another country.

Make-or-Buy Decisions

When managers opt for more vertical integration, less outsourcing occurs. The decisions related to vertical integration or outsourcing were earlied referred to as make-or-buy decisions. A make decision means more vertical integration and a buy decision means more outsourcing.

PART III: MANAGING SUPPLY CHAINS - Krajewski 12 Edition Chapters

12. Supply Chain Design

13. Supply Chain Logistic Networks

14. Supply Chain Integration

15. Supply Chain Sustainability

Supply Chain Management: Chopra and Meindl's Book Chapters - Important Points

Top Global Companies for Supply Chain Excellence - Supply Chain Strategies and Initiatives 

Index to Summaries of all Chapters of Krajewski's Book

Operations Management - Krajewski - 12th Edition - Chapter Summaries - Important Points

Management - Theories, Trends and Ideas for the Next 50 Years - McKinsey

Brilliant Machines

Connected Cars

Corporate Longevity

Elevating Women

The Future of Capitalism

Industry Growth in Emerging Economies

Lean is Still Strong

Organization Theory for the Future

The Productivity Imperative

Strategies for the Future



https://www.mckinsey.com/quarterly/overview/management-the-next-50-years

Types of Data Scientists and Organizing Data Science and Analytics Department

To hire the right people for the right roles and organize the data science department, it’s important to distinguish between different types of data scientist.

One type of data scientist creates output for the decision makers to use  in the form of product and strategy recommendations. They are decision scientists. The other creates output for using on machines like models, training data, and algorithms. They are modeling scientists.

Five key areas are required for  data science operations. In small organizations, one person may  do several of these things. In slightly bigger teams, each of these may be a role staffed by one or more individuals. In larger operations, each may be a team unto itself. These roles cover the creation, maintenance, and use of data.

Data infrastructure: data ingestion, availability, operations, access, and running environments to support workflows of data scientists. e.g. running a Hadoop cluster

Data engineering: determination of data schemas needed to support measurement and modeling needs, and data cleansing, aggregation, ETL, dataset management

Data quality and data governance: tools, processes, guidelines to ensure data is correct, gated and monitored, documented, standardized. This includes tools for data lineage and data security.

Data analytics engineering:  analytics software libraries, productizing workflows, and analytic microservices.

Data-product product manager: creating products for internal customers to use within their workflow, to enable incorporation of measurements and outputs created by data scientists. Examples include: a portal to read out results of A/B tests, a failure analysis tool, or a dashboard that enables self serve data and root cause diagnosing of changes to metrics or model performance.

How to organize Data Science Department?

Source
The Kinds of Data Scientist
Yael Garten
HBR, NOVEMBER 2018
https://hbr.org/2018/11/the-kinds-of-data-scientist

The Science and Practice of Management - Hamilton Church 1914 - Introduction

The Science and Practice of Management - A. Hamilton Church 

Copy Right:1914, Published 1918


"Two tasks are set for the worker in any science. One of these is to enrich the chosen field by the discovery of new facts and the statement of new experiences. The other . . . is to arrange the facts already known in 'the 'best order and to bring out the relations between them as closely as possible. Whenever progress in the first of these tasks has been rapid, the second becomes the more necessary, for it offers the only possible way of attaining mastery . . . and of bringing the science as a whole into a convenient and serviceable "form." — Wilhelm OSTWALD, " Fundamental Principles of Chemistry."

 In the spring of  1912, in conjunction with Mr. L. P. Alford, editor of the American Machinist,  I undertook an at  attempt to reduce the regulative principles of management to their simplest terms — that is, to express them in the broadest and most general way — and thus to provide a basic classification for administrative activity on which a detailed structure could subsequently be built up. We found that all the different working principles common in manufacturing could be reduced to one of three main groups, viz. :

(1) The systematic accumulation and use of experience.

(2) The economic control (or regulation) of effort.

(3) The promotion of personal effectiveness.

These regulative principles were afterward endorsed and adopted in the majority report of the special committee appointed by the American Society of Mechanical Engineers to investigate the new systems of management — a fourth principle, namely, the "transfer of skill," being added to them by the committee.

I contributed a series of articles to The Engineering Magazine (January-June 1913), in which the application of these principles was worked out. These articles were termed "Practical Principles of Rational Management", because at that time the peculiar feature of the modern system seemed to be the introduction of reasoning into management, as opposed to the old rule-of-thumb school.

Two Elements in Management: Determinative and Administrative

The first of these is the Determinative element, which settles the manufacturing policy of the business — what to make — and the distributive policy — where to sell and by what means. The second is the Administrative element, which takes the policy as determined, and gives it practical expression in buying, making, and selling.

Of these two elements, which are not infrequently combined in small businesses, the first — the Determinative — represents the higher and scarcer faculty.

The time has, perhaps, not yet come when we may reduce the Determinative element to a body of principles, or even working rules. It contains, today, too many unknown and variable factors. This book, therefore, makes no attempt to deal with this aspect of industry; it covers the element of Administration alone, and only one division of administration, namely, manufacturing. The administrative problems of Selling and Distribution are excluded from consideration in its pages.

Management, or rather administration (eliminating the determinative element), is an organic affair.

what is meant by the term "organic". The analogy of the human body gives the simplest illustration: the work of the great and lesser "organs" of the body, the heart, lungs, brain, etc., is independent yet coordinated. One of these organs may be working at a higher efficiency than the others, or vice versa, but on the balanced working of the whole set depends the health of the man, and his efficiency for whatever he wants to do — riding, walking, writing a poem, or dictating a business letter. Some

of these organs may fall into a state of inefficiency without marked results being at once visible, or again some one of them may be permanently lowered in efficiency without hindrance to particular kinds of work. But with each there is a point beyond which organic inefficiency cannot go without disaster.

Thinking along these lines, the author's attention was given to determine, if possible, what organic elements were to be found in industrial activity.

What we do find are groups of activities common to all industry, which groups are organic; that is, they perform specific functions in a specific way. Like the organs of the body, they are independent, yet closely co-ordinated.

Two great intellectual processes: Synthesis and Analysis

THE problem of management, broadly  regarded, consists in the practical application of two great intellectual processes. Whatever the end aimed at, whether the conduct of a military campaign or the manufacture of an industrial product, the processes involved are those of analysis and synthesis. In proportion as analysis is keen and correct, and synthesis is sure and unerring, so will be the resulting efficiency.

The neglect of analysis and the forceful use of synthesis are typical of the successful businesses of the past. The strong, shrewd, 'practical'  man could afford to neglect a careful analysis of his problem, because he had a very large margin of profit to draw on. His wastes were great, his lost opportunities many, but he knew nothing about them and cared less, because his operations were successful in proportion to his expectations. If his profits were not, as we can see now, as large as they should have

been, they were at least as large as those of everyone else.

During the last fifteen years there has been a considerable development of the art of analysis in the problems of management.

The introduction of the premium plan with the widespread notice it attracted, emphasized the need for more accurate determination of times, and as this happened in the machine-shop industry, which is of all industries the most complex and varied both in its machines and its product, it was found that some new departure was needed.

To meet this need, the particular kind of analysis now known as ''time study" was rediscovered.

The observations made by time study very soon disclosed the fact that great inefficiencies existed in and between these various kinds of work which are involved in production of a given piece.

From time study to motion study (itself also a method of analysis reaching back to the early beginnings of the use of machinery) is a natural step. Having ascertained that unit processes are in fact made up of a series of steps, and having recorded these steps and allotted times to them, it was a natural development to apply criticism to the steps themselves. Why should this be done, and why that? Why should the man bend down to pick up the material rather than the material be lifted up to the man? Why? indeed! The moment questions of this kind got into the air, it very soon became thick with them. The work of Mr. Gilbreth on motion study must be regarded as the most original contribution to the science of management that has yet been made.

The routing of product and the lay-out of machines is, then, a further development of the instrument of analysis that has very important bearing on efficiency.

The only difference between modern types of planning and the older practice is that, today, it is recognized as a subject of analysis, and that the planning department, or by whatever name it is known, is not merely a haphazard outgrowth of the business, but is organized after a careful analysis of the needs of the plant, with special reference to the kind, urgency, and aim of the operations carried on.

The really important point is the correct and exhaustive application of analysis to the actual facts of the case, that is, to the nature of the product, of the machines, of the men, and of the officials. Only when these facts are exhaustively known, may the design of a planning department commence.

Analysis is not a constructive instrument. We can make nothing by its aid. It distinguishes, it provides very accurate knowledge, it eliminates, but it does not build. That is the task of synthesis.

What then is synthesis! What kind of activities are grouped under that head? In what does it differ from analysis, and in what practical ways is it applied? These are interesting questions and will be briefly discussed.

Just as analysis is the art of separating and dissecting, so synthesis is the art of combining. As a practical art it naturally precedes analysis, or more correctly it precedes conscious analysis. While the elements of a problem are simple, the mind, intent on its aim, analyzes unconsciously to a degree sufficient for its needs. But in proportion as the number of elements grows — and in modern industry they have grown to a very large number — then conscious analysis must be brought into play, not to supersede hut to supplement the operations of synthesis.

The main distinction between synthesis and analysis in this connection is that synthesis is concerned with fashioning means to effect large ends, and analysis is concerned with the correct local use of given means. The view taken by synthesis is a wide and comprehensive one; it surveys the whole field of action ; its great task is to determine  " what to do". The view taken by analysis, on the other hand, is a narrow and limited one ; it concerns itself with the infinitely small. Its task is to say 'how to use certain means to the best advantage". Analysis builds up from the deeps. It may or may not its contribution to the whole.

But the synthetical side of management demands that every effort of analysis, like every other effort made in the plant, shall have some proportion, some definite economic relation to the purpose for which the business is being run.

The method of synthesis is to combine functions, that is, specific kinds of aim, in such a way that their co-operation produces some distinct and useful result. It is important to notice that industrial synthesis is not a mere combination of men, it is a combination of grouped activities or functions. It sets up a group of activities here.

It is evident therefore that the study of functions is of the greatest importance. But functions are a product of synthesis — analysis would never organize them nor coordinate them.

 But in beginning synthetically we should not take this point of view. We should first ask what was the objective of the whole organization.Thereafter we should proceed by erecting groupings successively less and less comprehensive.

Manufacturing - Five Organic Functions

In a manufacturing industry, according to the writer's examination of the subject, the objective of the whole, namely, production, is realized by a synthesis of five organic functions, which are invariably present in every type of industry, but to very different extent in each,
These five Organic Functions are:

• Design, 
• Equipment, 
• Control, 
• Comparison, and 
• Operation. 

Consequently we can say that production is a synthesis of Design, Equipment, Control, Comparison, and Operation.

The important point is that both the elementary and the highly developed condition in which we find this function, design has Again, the nature of the Equipment, and the method of its employment, may be entirely different in a paper mill, a foundry, and a soap factory ; but yet each must have equipment, and in each certain laws as to the use of such equipment must be observed in the same way. In each there will be a layout more efficient than any other, in each there will be decay and replacement of equipment, depreciation, maintenance and repair, etc., quite irrespective of the kind of equipment or its uses. On the other hand, the lay-out of equipment will be much more important in some industries than in others. Product that can be pumped through pipes, or conveyed on endless bands, is much more independent of physical lay-out than one which demands great effort to move it even a short distance. Every variety of equipment will have its own problems, but a large number of these problems are common ; that is, they differ in degree and not in kind. But in no case is equipment absent altogether exactly the same.

The function of Control is also obviously common to all manufacturing plants. Broadlv stated it is the function of the "boss". But no industry exists in which control does not need intelligent organization
on its own merits.

Similarly, there is no industry in which the function of Comparison does not exist. For comparison deals with the record of quantities whether such quantities are expressed in time, money, degrees, levels, or other notation. It therefore includes testing, inspecting and cost accounting. Any data which are of significance at all, are only so by comparison. This comparison may be with previous or future work of the same kind, or it may be with standards. And such standards, again, may be specified standards set up by Design, such as limits, fits or dimensions, or may be comparisons between time allowed for a job, and time taken, or may deal with physical standards such as temperatures, pressures, degrees of vacuum, specific gravity and so forth. But all these cases postulate two things: (1) the observation and record; (2) something by which to judge the value of the observation and record. No industry is without need for some of these methods of comparison, while in many industries a very considerable development of the function is both proper and profitable.

The final Organic Function found in manufacturing is that of Operation. This comprises the exercise of manual skills, trades, and callings, usually by way of operating-machines, but not necessarily so. Operation is definable as the act of changing the status (that is, the form, dimension, or composition) of material in accordance with the specification of Design. In practical language it is the work of the

shops, but only the operative work of the shops. It does not include foremanship, which is part of Control; or inspection, which is part of Comparison. It goes without saying that Operation is a function present in every plant of every kind.

Industrial synthesis may be defined as the proportioning of means to ends. Analysis, in the same sense, is the study of the adroit use of certain specified means in the most efficient way. The difference is that in analysis we assume the means are as they are. In synthesis it is the choice, the relative effectiveness, the right proportion, the right kind of means that is in question. Synthesis is the physical (gross), analysis the miscroscopical examination of the problem. Synthesis chooses and combines, analysis discusses and reveals. It is evident that we are here in presence of two processes that need to complement each other.

The art of managing an industrial plant so as to effect production most efficiently must be recognized therefore as consisting of two parts. First, the right use of synthesis — determination of the kind of organic functions needed to be set up, their due proportion, their proper balance, and their internal organization; and secondly, the right use of analysis — the investigation of the minute steps, the small stages by "which product advances from stage to stage from the status of raw material to the status of finished goods. Of these two parts, the correct use of synthesis is by far the most important, as will be understood when it is realized that the systematic use of analysis is only now being introduced into industry. All the not inconsiderable triumph is of industry in the past were realized with a trifling use of analysis, and that mostly instinctive and unconscious.

To suppose that analysis is a method of management instead of an instrument of management is a fatal error, that has been becoming rather common of late. It seems desirable therefore to emphasize its due place, and to recall the fact that the results of synthesis remain those by which management will be finally judged in all cases.

THE  VERY administrative act arises from an aim or desire to do something. Examination shows us that five separate varieties of aim are distinguishable in manufacturing administrative work, and that this an analysis is exhaustive, i. e., no aim or end exists in manufacturing that cannot properly be as-
signed to one of these categories.

Each of these separate aims should have, normally, its own separate organization for bringing about the results it seeks, and each may therefore be regarded as a true type of Organic Function, These functions have already been enumerated as follows : —

1. Design, which originates.

2. Equipment, which provides physical conditions.

3. Control, which specifies duties, and which orders.

4. Comparison, which measures, records and compares.

5. Operation, which makes.

These organic elements of administration are specific functions and not things. They are elemental facts; not tangible entities, but facts of observation. Thus they imply different kinds of mental activity. The art of organization consists in entrusting these different kinds of mental activity to the right persons, and in supervising their co-ordination. It is very important, therefore, that the scope and limits of each function shall be as sharply defined as possible.

These organic functions (if correctly stated) are obviously basic and fundamental divisions of manufacturing activity. They form natural lines of organization to which all manufacturing organization must conform, irrespective of the taste or will of the organizer. Consequently, it follows that those organizations that conform to these primary elements in the most simple, the clearest and the most direct way, will be the most efficient examples of manufacturing administration.

Related Post

Practical Application of Science and Principles of Management - A. Hamilton Church

Application of Analytical Techniques - Industrial Engineering Techniques in Each Manufacturing Management Function

You can compare Church's book on management with books by F.W. Taylor
F.W. Taylor - Shop Management - With Appropriate Sections

F.W. Taylor Scientific Management - With Appropriate Sections

Industry 4.0 Top Consultants Reports, Opinions, Thoughts and Views

2019

Growing opportunities in the Internet of Things
July 2019 - Article
https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/growing-opportunities-in-the-internet-of-things

CEOs are Talking About APIs, AI and ML
June 2019
https://www.forbes.com/sites/joemckendrick/2019/07/30/ceos-are-talking-about-apis-and-other-signs-the-world-is-turned-upside-down/

2018

Industry 4.0 is here. Why hasn’t your company adopted it?
ANDY DAECHER
Deloitte
Global survey of 361 business executives from organizations in seven industries (aerospace and defense, automotive, chemicals and specialty materials, industrial manufacturing, metals and mining, oil and gas, and power and utilities)

94 percent said that digital transformation is a top strategic objective for their organization.
But only  68 percent see digital transformation as a medium for profitability.

But,  11 percent of R&D budget targeted for digital transformation.
https://www.deloittedigital.com/us/en/blog-list/2018/industry-4-0-is-here--why-hasn-t-your-company-adopted-it.html


The fourth industrial revolution is here
Are you ready?
Deloitte
Deloitte surveyed 1,600 C-level executives across 19 countries
https://www2.deloitte.com/nl/nl/pages/consumer-industrial-products/articles/industry-4-0-readiness-report-2018.html


The Industry 4.0 paradox Executive summary

https://www2.deloitte.com/insights/us/en/focus/industry-4-0/challenges-on-path-to-digital-transformation/summary.html

The global Industry 4.0 market will reach $214B by 2023.

The "Industry 4.0 Technologies Market (Industrial Robotics, 3D Printing, AI, Big Data, Cybersecurity, Cloud Computing, H&V System Integration, Industrial IoT, Sensors, Simulation, VR, AR) – 2018-2023" report forecasts that the global Industry 4.0 market* will reach $214B by 2023.
https://www.prnewswire.com/news-releases/the-global-industry-40-market-will-reach-214b-by-2023-300609800.html

Five questions for Tobias Richter
What exactly does an Industry 4.0 technician do?
https://www.bosch.com/explore-and-experience/industry-4-0-consultant/

Industry 4.0: Global Digital Operations Study 2018 - PWC
https://www.pwc.com/gx/en/industries/industry-4-0.html



Transition to a Cognitive Supply Chain

Five key areas of the supply chain - Transitioning to a cognitive supply chain.
https://www.tcs.com/blogs/building-a-cognitive-supply-chain-for-industry-4-0

2017

How Intelligent Machines will transform everything
Markus Lorenz
BCG
TED@BCG

___________________

___________________

Six key dimensions to Industry 4.0
13 December 2017
https://home.kpmg.com/uk/en/home/insights/2017/12/six-dimensions-to-industry-4-0.html

Industry 4.0 – Starting the next industrial revolution in Germany
13.12.2017

Combining mechanical and electrical engineering with informatics yields an entirely new way of industrial production called Industry 4.0. The progress made in Germany seems to be the benchmark  for the rest of the world.
https://home.kpmg.com/de/en/home/insights/2017/12/industry-4-0-industrial-revolution-in-germany.html

HfS Blueprint Guide: Industry 4.0 Services

Excerpt for Accenture
April 2017


Industry 4.0 Framework: The Digital OneManufacturing Organization
Digital OneManufacturing is the abxility to do mass customization at scale so that manufacturing enterprises manufacture for one customer economically and efficiently. This is possible as  manufacturing enterprises can achieve a significant increase in cost efficiency, time productivity, and
flexibility, by aligning and integrating their manufacturing processes and technology landscape, which is possible in Industry 4.0 manufacturing environment.

The three pillars of Digital OneManufacturing
Digital Underbelly: 13 major technologies that are shaping Industry 4.0.
include Manufacturing Data Analytics, Robots, Manufacturing Automation, Digital Clone or Simulation, Three-Dimensional (3D) Printing, Manufacturing Internet of Things (IoT), Plant Cybersecurity, Manufacturing on Cloud, Virtual Reality in Manufacturing, Augmented Reality in Manufacturing, Artificial
Intelligence in Manufacturing, Visual Analytics in Manufacturing, and Small Batch Manufacturing.

Scope: These Industry 4.0 technologies can be implemented on the manufacturing shop floor at five levels:
smart component, smart machine, digital factory, connected factories, and Industry 4.0 enterprise.

Intelligent Digital Processes: These processes enable smarter and more intelligent manufacturing. There are described as three functions that are enabled by digital manufacturing processes: analysis, visualization, and control.

Levers of Industry 4.0

The links between the digital underbelly and intelligent digital processes are the following capabilities or levers:

Cyber-Physical System:
Smart Machines:
Data Flow:
Mass Customization:
Virtual Manufacturing:
Lean Manufacturing and Resource Management:

The following list of
competitive advantages: a manufacturing firm can expect from the implementation of Industry 4.0:

Manufacturing Process Optimization:
Streamlined Supply Chain:
Improved Inventory Management:
Better Resource Management:
End-User-Centric Manufacturing:
https://www.accenture.com/t20180625T094010Z__w__/us-en/_acnmedia/PDF-52/Accenture-Industry-4-Excerpt-for-Accenture-Report.pdf

2016

A Strategist’s Guide to Industry 4.0
strategy+business:
May 9, 2016 / Summer 2016 / Issue 83
Reinhard Geissbauer, Jesper Vedsø, and Stefan Schrauf, PWC


Updated on 4 August 2019,
17 November 2018