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Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Operations Flexibility,Motivation,What is flexibility,What benefits does it provide,and how much does it cost,What is its fit with operations strategy,What are its dimensions,How do you measure it,Strategic Considerations,Environmental uncertainties,System capabilities,Advanced technology,Adequate managerial response,Scheduling,routing,product/process design,Company Posture,Reactive(defensive),Proactive,Reactive/Proactive,Strategy Options,Adapt to uncertainty in real time,Create“rainy-day resource-bank,Reduce uncertainty,Implications for Flexibility,Strategy,Posture,Implication for Flexibility,Adaptation,Defensive,Requires flexibility,Banking,Defensive/Proactive,Requires flexibility,Reduction,Proactive,Reduces need for flexibility,Types of Uncertainty,Market acceptance of kinds of products,Length of product life cycles,Specific product characteristics,Aggregate product demand,Machine downtime,Characteristics of materials,Flexibility Dimensions,Mix,Changeover,Modification,Volume,Rerouting,Material,Uncertainty and Flexibility,Type of,Uncertainty,Strategic,Objective,Flexibility,Dimension,Market acceptance,of product variety,Diverse product line,Mix,Length of product,life cycles,Product innovation,Changeover,Specific product,characteristics,Responsiveness to,customers specs,Modification,Aggregate product demand,Market share,Volume,Machine downtime,Customers due dates,Rerouting,Characteristics of,materials,Product quality,Material,Adaptive/Reduction,Delivering Flexibility,Markets,ORGANIZATIONAL STRUCTURE,MICROPROCESSOR TECHNOLOGY,Component,or basic,Flexibilities,System,Flexibilities,Aggregate,Flexibilities,Machine,Material Handling,Operation,Process,Routing,Product,Volume,Expansion,Program,Production,Measuring Flexibility,Number of options available at a given point in time,Number of rerouting paths in scheduling,Entropy:opportunity to select a given option or the degree of randomness(uncertainty)in a system,Range of some defining characteristics of outputs,Instead of the number of car models produced use the range of wheel bases,Difference in expected profits with and without flexibility,Most of the value of flexibility can be realized at low cost because only a few options are necessary,Flexibility postulates,Increasing variety(hence mix flexibility)increase complexity,Innovations in process technology make flexible technology obsolete,Modification flexibility reduces pressure to get design right first time,Volume flexibility requires excess capacity and slack in production/service schedules,Rerouting flexibility discourages efforts to reduce machine breakdowns,Material flexibility reduces pressure to reduce quality problems,Flexibility through Capacity-chain,Two plants,Each plant with capacity of 100 units,Production of two products,Both products with equally likely demands:50,100,and 150 units,Value of Flexibility,Expected Sales,Lost Sales,Capacity Utilization,2 plants,2 product,Capacity utilization,10 plants,10 product,No Flexibility,167,33,83%,85.3%,Total Flexibility,178,22,89%,95.4%,Capacity Chain,10 products/10 plants,No flexibility,Each plant builds only one product(product 1 built in plant 1,product 2 in plant 2,etc.).,Expected sales 853 units,expected capacity utilization 85.3%.,Partial flexibility,Each plant can build all 2 products,10 links between plants,Capacity utilization increase to 95%,respectively.,Guidelines for Adding Flexibility,Try to equalize the number of plants(measured in total units of capacity)to which each product in the chain is directly connected;,Try to equalize the number of products(measured in total units of expected demand)to which each plant in the chain is directly connected;and,Try to create a circuit(s)that encompasses as many plants and products as possible.,Conclusions,Advanced technology is only one way of delivering flexibility,Flexibility responsiveness may be the most important dimension if market uncertainty is high,Flexibility has a proactive function in creating uncertainties that competitors find hard to cope with(satisfying short lead time preference of customers,which they then expect of all competitors),Flexibility impacts the balance between reactive and proactive operations strategies,Flexibility dimensions should be integrated so that they complement one another,
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