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[Conference paper]High Resolution Supply Chain Management – Enabling adaptable planning processes
(2007)
Increased competition has continuously led to a shift of production locations from high-wage to low-wage countries. To counteract this development the manufacturing of customized goods at the costs of mass production is necessary. This goal can be reached by solving the polylemma of production. High Resolution Supply Chain Management provides an approach to achieve higher planning efficiency and production profitability by increased flexibility and value orientation of inter- and in-company production planning and control systems. High Resolution Supply Chain Management aims for the establishment of information transparency within supply chains which does not exist in today's production networks. This will assure the availability of goods by local, self-optimizing control loops. Prerequisite is the creation of communication interfaces and data standards. By assuring the information flow and defined control loops High Resolution Supply Chain Management leads to an adaptive and self-optimized production system. In the last few years globalization led to a higher stress of competition of producing companies in high-wage countries. Cost advantages in production, like lower wages and social contributions, result in a relocation of production plants from countries as e.g. the United States or Germany to low-wage countries. Besides the lower wages the higher profitability is due to cost-effective mass production through economies of scale. At the same time customers ask for more individualized and lower priced products lined up with the wish of shorter lead times. Thus, companies have to gain the capability to adapt rapidly to customers requests. Short customer response times, high flexibility in production planning and -control (PPC) and manufacturing are necessary. Thereby, one frequently neglected competitive advantage of production locations in high-wage countries is the customer proximity. Industry now realizes this advantage and strengthens its efforts towards individualized production. A competitive advantage for high-wage countries can therefore be gained if individualized products are produced at nearly the costs of mass production. Thus, the resolution of the polylemma of production is underlying condition for saving labor in high-wage countries.
Viable Production System for adaptable and flexible production planning and control processes
(2009)
High Resolution Supply Chain Management (HRSCM) aims at designing adaptable and flexible production planning and control (PPC) processes according to the needs of the company’s supply chain environment. To reach this goal a model for a Viable Production System (VPS) has been elaborated and is presented in this paper. Based on the Viable System Model (VSM) developed by Stafford Beer current production systems are analyzed in terms of integrity. With the gained knowledge a complete recursive framework of a VPS is developed. The framework allows the design of a decentralized production system that meets all requirements of a dynamic environment. Flexible and adaptable PPC processes can be developed for each identified subsystem of the VPS. Hence, further research focuses on the development of process and control loops in order to assure the application of the framework. Exemplarily the decentralised control loop for inventory management is elaborated in a case study.
Supply Chain Management delivers a considerable amount of ideas and methods to design the value stream. Each of these concepts may lead to significant cost reduction and higher service levels. But the same concept does not work for different customers and their diverse needs. Thus, a “one size fits it all” supply chain cannot lead to success. The key to overcome this obstacle is the hybrid supply chain. This paper outlines the application of hybrid system theory to supply chains. After a comprehensive overview of existing methods for the design of supply chains is given, a methodology for a customer-to-customer oriented supply chain design is presented. This approach adopts the hybrid system theory to supply chains which is in a nutshell that hybrid systems use the advantages of its subsystems to reach a superior result to one system alone. Concluding a case study illustrates the application of the methodology.
In saturated markets companies have to produce individualized products at low costs. In order to produce the high-variety of products efficiently and to be able to react effectively to order-variations, the production process structures must be most flexible and sustainable. Therefore adaptability of planning processes within the company and the supply chain is a precondition. Moreover an adaptive, decentralized control is necessary, which ensures a synchronized process by a flexible information network across all sub-processes. High Resolution Supply Chain Management aims at designing the production system according to the needs of the company’s supply chain environment.
To reach this goal a consistent research methodology has been elaborated. Based on the Viable System Model (VSM) developed by Stafford Beer current production systems are analyzed preliminary in terms of integrity.
With the gained knowledge a complete recursive model of a Viable Production System is developed. The recursive character of the approach allows identifying independent units within production systems on a detailed level. These units are meant to be self-optimizing control units, whereas the purpose of a unit is to independently optimize its part of the production system or production planning process. The architecture allows modelling a decentralized production system that meets all requirements of a flexible, adaptable production system. Thereupon, research focuses on the development of process and control loops for each of the identified units.
Each unit requires specific input information to be able to achieve a maximum degree of planning accuracy within its boundaries. For the communication of different units a flexible information flow has to be secured. Consequently an additional hierarchical and consistent set of objectives is necessary. Only consistent superior objectives can secure local optimization which yields to something like an overall optimum.
By integrating all results into a complete model of a Viable Production System, the adaptability of planning processes is reached due to the decentralized control of the different units, the consistent set of objectives and flexible information network.