Term Paper on "Manufacturing and Supply Chain"

Term Paper 60 pages (22785 words) Sources: 1+

[EXCERPT] . . . .

E-Manufacturing - a New Link in the Supply Chain

Research Question and/or Hypothesis

Benefits of the Study

Industry/Organizational Perspectives/Implications

Conceptual Framework

Definitions/Operationalization of Terms

Research/Sampling Design

Research Variables/Measurement

Summary, Conclusions, and Recommendations

E-Manufacturing - A New Link in the Supply Chain

Computer use first spread throughout manufacturing and industry during the 1950's and 1960's. Early computers, however, were both difficult to program and limited in their speed and memory. Therefore, they were used mostly for tasks requiring little analysis, but much sorting, calculating, and filing. These first computer applications did in fact improve the efficiency of basic clerical activities within manufacturing companies: accounting; payroll; order processing; inventory maintenance, customer record keeping, and so forth.

However, the early computers used in manufacturing and business were dedicated to (and limited to) performing repetitive tasks, and, perhaps more importantly, even then, were unable to readily communicate with one another, or to in any way streamline or coordinate their respective tasks. Typically, then, such computers processed work in batches, and then generated piles of reports to be reviewed (until the next batch would be processed for review). In the early years of computing, then, manufacturing companies struggled, without success, to accomplish the elusive goal of getting their plant floor systems to "talk" (so to speak) among themselves and to their business systems.

Within the manufacturing world of the 21st century, however, the versatility of computers has been dramatically enhanced. Manufacturing companies nowadays enjoy numerous benefits of greatly-enhanced computing power, including almost limitless internet communication capabilities. Moreover, with widespread introduction of "Internet Technologies" (IT) it is, in today's manufacturing world, relatively easy for one company computer to establish communication with another, with several others, or with the computers of other companies (e.g., manufacturer's computer to supplier's computer) simultaneously.

However, in order for manufacturers to optimally enhance the productive efficiency of their manufacturing supply chains today, in order to best achieve customer satisfaction, and overall profitability, it is increasingly important that those manufacturers, if they wish to remain competitive, and on the cutting edge of their industries (not only in terms of available technology itself, but in terms of speed; efficiency; minimization of waste, and overall profitability) utilize the much-improved capacities of today's computers and software systems to: (1) communicate in real-time, within their internal factory supply chains, and (2) communicate in real-time to their external supply chains, in ways that increase manufacturing speed; customer satisfaction and overall profitability while simultaneously reducing waste. To that end, "Internet technologies" (IT) may today be used by manufacturers in more ways than ever before, especially in ways that could benefit and substantially increase efficiency and profitability of the manufacturer's overall supply chain (Cox 2003).

Overview of Problem

The problem as it exists today is that many manufacturers worldwide still experience less than optimal operations of their respective supply chains, for various (and varying, even within a particular company) reasons. Internet technologies (IT) do not offer a cure-all solution to all supply chain problems. Still, IT, when it is properly used, and is employed to address a specific need, deficiency, error, or weakness within a manufacturing company's supply chain, may in fact help to dramatically increase customer satisfaction and profit, while simultaneously reducing waste for the company. Dell Computers and Toyota Motor Company (Schrage 2003; Lee 2004) are two examples of global manufacturing entities that have done precisely that, and both have, in recent years, been heavy users of Internet Technologies (IT) (Cox 2003).

Nevertheless, many manufacturing companies today still do not use Internet Technologies (IT), or do not use such technologies nearly as effectively as they might, within their respective supply chains, in order to optimize their respective production processes while also reducing overall waste within their companies. In fact, one of the biggest problems a manufacturer faces in these times is that of sufficiently understanding each of his or her discrete business processes, particularly as they apply to overall supply chain management (Ayers 2002).

Moreover, as Lee (2004) observes, supply chain needs are fluid and ever-changing, based on "economic progress, political and social change, demographic trends, and technological advances: "Unless companies adapt their supply chains, they won't stay competitive for very long" (p.1). As an example of the key importance of ongoing flexibility and adaptability within one's own supply chain, Lee notes that "Lucent lost its leadership of the global telecommunications market because it didn't adapt quickly enough" (p. 2).

Ayers (2002, p.7) further suggests that most companies exist in a state of what he calls the "Functional Paradigm," i.e., most companies are composed of individual "functional" departments, each of which has its own separate agenda. Furthermore, such departments are led by strong-minded managers, who have little understanding or concern for the needs of any of the company's the other departments, or their own departments' relationship to the overall supply chain. But all of those companies' current processes may not be necessary to ultimately fulfill customer orders, and that is where supply chain adaptability and flexibility come in (Johnston 2004). Further, "Supply chains are incredibly complex with numerous moving parts" (Johnston, p. 1).

Additionally there are likely non-value-added tasks that can both delay shipment of products and compromise profits. Improvements, then, can be made in these sorts of processes in order to best streamline efficiency of service, thereby increasing customer satisfaction as well as profitability. Perhaps the most important (and also, however, most unpredictable) variable within any supply chain operation is the judgment of those individuals responsible for its design and operation, and their attitudes about the supply chain's particular functions, strengths, and weaknesses. For instance, Johnston (2004) notes:

evidence of individual biases such as optimism, recency [sic], search for supportive evidence, and illusory correlations -- all well-documented biases in the forecasting literature..., the behavioral approach to the motivation and incentives component of coordination seems a common foil. Natural or more directly instituted functional incentives play havoc with motivating higher aims of efficient demand planning. Measurement and interpreting efficiency along those higher aims can also be behaviorally compromised when measures have to be simplified or aggregated.

p. 3)

Further, as Lee (2004) states:

Great companies don't stick to the same supply networks when markets or strategies change. Rather, such organizations keep adapting their supply chains so they can adjust to changing needs. Adaptation can be tough, but it's critical in developing a supply chain that delivers a sustainable advantage. (p. 1).

Numerous manufacturers today, however, remain only partially aware if not altogether unaware, of just how extremely beneficially IT can now become, when used in order to better streamline their own respective supply chains, thereby increasing speed of manufacture; service to customers and profitability, all while reducing inventory waste and other unnecessary steps. The research presented here, therefore, is intended to both describe and illustrate the benefits, within today's ever-changing and extremely competitive manufacturing world, of outstanding supply chain decision-making and management, as exemplified within the present supply chain operations of two leading international manufacturing companies in particular, Dell Computers and Toyota Motor Company.

Both of these companies, today, have optimally streamlined their customer order-to production-to delivery (or sale) operations, and increased profitability to beat out their competition, in ways that it might benefit other manufacturers to study. As Breen (2004) notes:

For most of business history, inventory has been a form of security. A warehouse bulging with components, or a distribution center packed with finished products, meant that even when a customer forecast went wildly awry, there'd still be enough supply on hand to meet a demand. But ever since the 1980's, when General Motors began adopting Toyota's pioneering methods in lean manufacturing, fast companies have delayered [sic],reengineered, and scrubbed the waste from their assembly lines and supply chains by slashing lead time and stripping inventory and spare capacity from their operations.

But no one has gone as far as Dell. It's well-known... For nearly eliminating finished-goods inventory by cutting out resellers and connecting directly to customers... it... has transformed the back end of its operations - its assembly lines and supply chain -- ... (p. 3)

The focus of the present study, then, was to analyze how excellent supply chain decision-making and management have enabled Dell and Toyota to function so well vis-a-vis customers and suppliers alike, and how other manufacturing entities might attain similar results for their respective enterprises. As Breen (2004) states, of Dell: "for most businesses, warehouses full of stuff are a kind of security blanket. But Dell has replaced inventory with information, and that has helped turn it into one of the fastest, most hyperefficient [sic] organizations on the planet" (p. 1).

The study first described how supply-chain technologies operate generally, and then specifically described supply chain strategies and technologies currently used by Dell Computers and Toyota Motor Company, both of whom currently use IT to substantially beat out other manufacturers in terms of speed; efficiency; customer satisfaction; reduction of waste, and overall profitability. Through exploring the benefits of IT today to (1) manufacturers in general; (2) Dell Computers and Toyota Motor… READ MORE

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