Pipeline management & control.

mass produced products.In order to deliver product fast, mass customisers need flow manufacturing to make product fast in small quantities and a spontaneous supply chain which can assure spontaneous availability of materials and make parts on demand.The trend to smaller batches, approaching one, is what is happen to manufacturing industry.  The Basic Mass Customization PremiseStandardisation leads to part count reduction, reductions in overheads, reduction in lead-times and can introduce the possibility of leaner working, due to increased volumes of standard parts. Traditional accounting systems underestimate this effect. Lack of standardization leads to a massive product range product and component proliferation and result of longer lead-times .Products do not have to be over-engineered to suit the worst case. Each case can be accommodated separately. These arguments define the scope for and benefits of "postponement":The earlier parts are stocked in the process the more likely they are to satisfy a larger range of changing requirements.The earlier parts are stocked in the process, less value has been added to the stockholding.The later parts are stocked, the shorter the lead-time.If stock is held after the point of mutation more will be needed (some of each type).Stock is needed before the bottleneck to keep it working. If lead-times are short from this point no stock is needed after the bottleneck.1.4 Benchmarking Benchmarking is the continuous search for and adaptation of significantly better practices that leads to superior performance by investigating the performance and practices of other organisations (benchmark partners). In addition, it can create a crisis to facilitate the change process.Benchmarking goes beyond comparisons with competitors to understanding the practices that lie behind the performance gaps. It is not a method for 'copying' the practices of competitors, but a way of seeking superior process performance by looking outside the industry. Benchmarking makes it possible to gain competitive superiority rather than competitive parity. The term benchmark refers to the reference point by which performance is measured against. It is the indicator of what can and is being achieved. The term benchmarking refers to the actual activity of establishing benchmarks and 'best' practices[b].1.5 spontaneous build to order                           Spontaneous build-to-order (BTO) is the capacity to quick build standard or mass-customised products upon receipt orders without forecasts, inventory, or purchasing delays.  These products may be shipped directly to individual customers, to stores or dealers, or as a response to assemblers’ “pull signals”.The basic strategies for implementing spontaneous BTO are supply chain simplification,  concurrent design of versatile products and flexible process, the mass customisation of variety, and the development of a spontaneous supply chain.  The goal of supply chain simplification is to drastically reducte the variety of parts and raw materials to the point where these materials can be procured spontaneously by automatic and bull-based resupply techniques. So reducing the part and material variety will also shrink the supplier base, as well as the supply chain.[c]1.5.1 Modular Product Design as Enabler of “Built-to-Order”. “Dell Direct” depends heavily on the modular product architecture of a personal computer, which is made up of a small number of separately-produced, physically independent “modules” joined along a common interface.Customized products can be easily built by mixing-and-matching of modules. Modules are increasingly standardized across the industry, creating the opportunity for huge cost savings through volume production and supplier competition. Best-in-class module suppliers can innovate without high coordination costs, through independent upgrades of functionality.There is tremendous OEM interest in modular design and production as a way to cut costs and manage complexity (Murray and Sako, 1999; Sako and Warburton, 1999; authors’ interviews).But there is ample ambivalence as well. To explain why requires a brief description of the dominant design of an automobile, and how that affects the applicability of modular design rules.We use the following definitions, following Ulrich (1995): Component: Basic building block of systems or modules System: Totality of components, interfaces, and software providing one of the key vehicle functions. The elements in a system are typically distributed physically across the vehicle.Module: A physically proximate “chunk” of components, typically from multiple systems, which can be assembled into the vehicle as one unit.1.5.2 Manufacturing Under “Build-to-Order”.  On the production side, OEMs face both costs and benefits from “build-to-order”. Given the current characteristics of the typical car’s design (4,000-5,000 parts; 300-500 suppliers; a proliferation of options), the complexity resulting from customized orders could quickly become unmanageable. Most automakers have been seeking to reduce their build configurations and, at first impression, “build-to-order” would seem completely at odds with this goal.However, there are potential production advantages from the combination of modular design and “build-to-order”. First, if features are bundled into carefully-chosen configurations and the choices offered to consumers are limited, the total number of build combinations could be less than the status quo, which resulted from the ad hoc addition of more and more options over time. Modules that are designed to be further decomposable into modular elements can allow these configurations to be realized through “mix and match” customization. Second, modular production, in which suppliers build up modules and deliver them in sequence to the OEM, can make the final assembly process much shorter and simpler. The process sequence can potentially be organized so that customization steps are postponed until as late in production as possible, thus allowing for mass production economies at earlier stages.Third, building customized products will reduce finished goods inventories dramatically. Not all inventories will drop; this strategy may necessitate that suppliers hold higher levels of parts and work-in-process inventory. However, OEM access to data on consumer preferences, expressed during order configuration, can potentially improve demand forecasting accuracy, thus mitigating the need for inventory buffers.Running a true “build-to-order” production system also differs greatly from either mass production or lean production. Lean production operates with very low levels of inventory and with quick setups, so it can handle for rapid product changeover, as long as these changeovers are predictable. Predictability is necessary because lean production also emphasizes the extreme levelling of production, or heijunka, to avoid the waste of idle capacity or of overproduction. A production system based on 100% build-to-order might have too much volatility to allow for this degree of production leveling. Thus lean production could  accommodate “build-to-order” only with production scheduling that combines “pull”- and “push”-derived demand. The customer front-end would need to support such a scheduling system by helping to steer customers towards those  combinations that can be most readily built, given production and parts supply constraints at any given point in time.Part 2: Automotive industry has been chosen and identifies steps that have been made by companies to improve synchronisation processes and activities across the supply chain.  What are barriers to such change?2.1 IntroductionThe Internet will still offer new economies, new capabilities, and opportunities for new business development. We focus here on three areas: business-to-consumer links (B2C) affecting automotive retailing; business- to-business links (B2B) affecting procurement; and a new arena for competition: business to- vehicle (B2V) products and services.The key feature of e-commerce is the de-specification of information technology assets: the ability of firms to achieve fast, cheap, asynchronous communication without investing in proprietary electronic data interchange software or training. Another important aspect is that it seems that the Internet is most useful for transferring this information if it is      codified—that is, can be written down and understood similarly by many people. 2.2 E-procurement under “Build-to-Order”.Electronic, Internet-mediated procurement will provide the underpinning for “build-to-order” by facilitating the rapid and low-cost dissemination of order information, production scheduling, engineering changes, and other crucial information.While a variety of alternate methods of communication between OEMs and suppliers, such as proprietary electronic data interchange (EDI), now exist to accomplish this task, the Internet offers the low cost, high speed, and universal connectivity necessary to make build-to-order economically feasible. Indeed, it is impossible to imagine an integrated build-to-order system, in which production (and hence procurement) is only initiated after an actual customer order is received, without an infrastructure that can distribute large amounts of information simultaneously and at low cost to all upstream links in the value chain. Beyond this, however, the path taken by e-procurement under “build-to-order” will be a function of what mode of supplier relations is dominant. This in turn will depend on developments in product architecture.2.3 B2B: Transforming or Reinforcing Supplier Relationships?Four developments associated with B2B appear to have the most potential for affecting(either changing or reinforcing) past norms of automotive procurement: 1) Open architecture and information transparency; 2) Automation of steps in the purchasing process; 3) New pricing models that commoditize purchases, such as auctions; and 4) New tools to facilitate collaborative product design of complex components or modules. Using information from a recent Goldman Sachs report (Lapidus, 2000), we evaluate (and in some cases revise) estimates of potential savings from each of these developments.2.3.1 Open architecture and transparency. The now-widespread diffusion of XML (eXtensive Markup Language) provides data tags and data field labels that can be read by any operating system or application with minimal translation effort. This will make it possible to put all participants in a supply chain -- large or small and located anywhere in the world -- on the same information system with access to real-time data. This will reduce the barriers to smaller suppliers, who have been disadvantaged by the high costs of proprietary IT systems in the recent past. However, a key determinant of supplier access to new customers is whether the XML tags will be standardized, or specialized to one exchange. If, for example, Covisint and e-Steel have different ways of describing a purchase order, this will make it very difficult for a firm to link its production system to orders coming from both (Glushko, 1999).2.3.2 Automation of steps in the purchasing processAn even larger effect of the Web’s open architecture comes from the ability to automate much of the purchasing process. Expert systems can be created, even for lower-tier suppliers, that can greatly simplify processes such as need identification, vendor selection, receiving, and accounts payable.2.3.3 AuctionAuctions now present huge opportunities for reducing prices on parts at the commodity end of the spectrum, and will create huge advantages for best-in-class suppliers to capture high market share by exploiting scale economies. Small wonder that many interpret the establishment of Covisint as evidence that supplier margins will be more effectively squeezed than in the past (Taylor, 2000). OEMs will run the exchange, levy fees on participating suppliers, and benefit during price negotiations from information transparency that could reveal supplier cost structures. But the use of auctions may be the most powerful means of forcing price reductions. Auction mechanisms can also be used to sell excess production capacity.2.3.4 New tools to facilitate collaborative product design of complex components or modulesWhen a customer place a order over internet, in traditional approach, it normally takes few weeks in order to produce a car.  With Internet, once the order has been made, Covisint could facilitate collaboration in a variety of ways. Automakers can post production schedules on the web. This step increases productivity, since no one has to call or fax each supplier affected by a change in the schedule. The asynchronous nature of web communication could facilitate communication with a global supply base.  the whole supply chain can immediate get the order and start to produce a car, so the whole supply chain become visibility.  One could imagine an automaker sending a video of a quality problem whose cause was unknown to suppliers of adjoining parts. While this is not as good as having all parties come to the actual site of the problem, it is better than trying to describe it over the telephone, or sending a fax. Designs could also be posted on the web. This step, which should be technically feasible soon, would have a number of benefits. It would eliminate the expense of proprietary design software. 2.4 Barrier of change:2.4.1 Culture blameHuman resist to change : Still traditional dealerships who resist changes in their retail practices and who spurn Internet sales are not likely to last for long. They will face pressure from OEMs and customers alike and local owners will find eager buyers, not least from investors associated with the new group of retail competitors -- dot.coms offering a “dealer direct” model.2.4.2 Security is uncertainCustomer-supplier relationship: security in the supply chain is not certain.  There is no 100% to ensure the security is perfect.  In 2000, 70 percent of respondents indicated that their systems had experienced unauthorised use.  This is up from 42 percent in 1996.  technical barriers are not the largest obstacles to posting design data. Suppliers would not want their competitors to see their designs without some assurance that they would not lose business to a firm that could cheaply imitate it. Protection of proprietary information with firewalls and secure customer-specific sections of the site will be required. But no technological security mechanism will fully substitute for the presence of trust between supplier and customer, already crucial for the “voice” mode of supplier relations to function effectively. Collaborative mechanisms will need reinforcement from other aspects of the customer-supplier relationship.2.4.3 Sharing informationMany companies do not like to join exchange because they have to share key business data with their competitors.2.4.4 Lack of knowledgeImplementing e-supply chain is likely need expertise to know how to work well.  And mainly people who have been working in supply chain field for a long time is likely to realise the importance of e-commerce and hiring not enough expertise in their company.Part 3: What changes are likely to occur in the future with late configuration of vehicle build for the 3-day car? And identify the role that web-based technology may play?Late configuration means automobile manufacture start to standardise about modular product architecture for the 3-day car.  So job description is also change too. Any jobs affected by the customization process may well be changed, from the engineer who works on module rather than component design to the auto salesperson who works with a customer who has already configured a new vehicle online, from the production scheduler who tracks the “pull” from customer orders to the worker who installs a module on the much shortened final assembly line. Also, since seats are made of textiles and have fashion elements reminiscent of consumer products, in contrast to the steel components with relatively long product cycles that the automakers are familiar with. As a result of their specialization, the suppliers have made seats far more comfortable and stylish than they used to be, at an attractive price for automakers. Because the seat connects to the rest of the car in only one place (the seat rail), it has been a relatively easy part to modularize -- and is so far the only part which is widely obtained by automakers in modular form. Seat manufacturers are now working to make their dominant design more modular internally, i.e. more decomposable into smaller modules, to aid customization. Competition between these two firms and newcomer Magna ers avoid undue dependence on one supplier.This trend toward increased bargaining power would be reinforced if suppliers could design products that consumers would ask for by name. (Again, think ‘Intel Inside’.) Johnson Controls is attempting to do just that in its partnership with Lego to produce.  Almost all parts of the car today are specially designed for a particular model (even seats).3.1 The role that web-based technology may playYucesan.and VanWassenhove.(2002) stated that information is said to be glue that hold the supply chain together.  The internet can viewed as open commication infrastructure, while web-based technologies provide standard interfaces among dissimialar computing hardware and software. While web-based technologies enable the management of a portolio of relationships in an effective and efficient manner by drastically reducing transaction costs, the cost of establishing such relationship remains.  In other words, while web-based technology make it feasible and easy to operate at any point within the cube for a specific manufacturer, the selection of that point.For manufacturing inputs, web-based technologies provide two key benefits.  First, catalog hubs, or meta-catalogs, offering the possibility of bringing together a virtually unlimited number of offers from different suppliers all over the world.  Such an infrastructure wourld greatly reduce the search cost for the buyer.  For the supplier- in particular, for the small supply- the platform offers unparalleled access to potential markets.  Richness refers to the quality of information in terms of its accuracy, bandwidth, currency, customisation, interactivity, relevance, security, etc.  reach simply refers to the number of people sharing that information.  A catalog is capable of transmitting ric, customised information to the customer before they decide to buy any car.  Also internet appears to mitigate this trade-off.  For example, manufacturing company should able to provide greater reach that a call centre, while affording considerable richness for key corporate customers through “premier pages”, which are customised web-based interfaces between manufacturing industry and customers.Uing internet can actually transparent the data through the whole automotive industry.   When a customer place an order, the whole supply chain can react immediately, this is called synchronisation. internet is the common platform to the whole supply chain and Internet has been used to streamline the products or services flow through the supply chain pipeline.  ConclusionFor the most value to be gained from customer fulfilment, vehicle build-to-order systems will continue to be implemented in Europe and, eventually, across the globe.  Vehicle distribution’s role in this crucial as the right product, at the right price at the right time is the key to success in the new business model.  However, reducing delivery lead-times for customers who will not wait is only half the solution, reliable delivery exactly when and where the customer wants it, will become a key selling point whether that is three days from order or 10 days, and whether it is to a traditional dealer, supermarket  or home delivery.  A number of changes to the current process will be required to enable deal in such a short time period at the right cost.  At the end, if company cannot fulfil this expectation at an acceptable cost will lose out in the coming build-to-order revolution.Reference                                                                                                                                                                 THIS DOCUMENT WAS DOWNLOADED FROM COURSEWORK.INFO - THE UK'S COURSEWORK DATABASE - HTTP://WWW.COURSEWORK.INFO/ [a]p.5 [b]D:\pipeline\Benchmarking.htm [c]1. As we discuss in Scenario 2, most of these changes would require reform of automotive franchisinglaws.