Manufacturing Logistcs.docx
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Manufacturing Logistcs.docx
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ManufacturingLogistcs
TABLEOFCONTENT
ANSWERA2-4
Answera2-3
Answerb3-4
ANSWERB5-7
ANSWERC8-10
REFERENCE11
BIBLIOGRAPHY12
A.
a.Manufacturingperspective
Theautomotiveindustrycrisesof2008-2009areglobalfinancialcrisesintheautoindustrythatbeganduringthelatterhalfof2008.ThecrisisisprimarilyfeltintheEuropeanautomobilemanufacturingindustry.ThesignsfortheEuropeancarsalesindustryarelookingbleak.Fromthisreason,theenginemanufacturingindustryinUKhasfaceunprecedentedchallengesatthepresent,andduetothisbadeconomiccondition,theenginemanufacturerswerehitparticularlyhardbyasharpdeclineindemand,asallthebusinessesreinedinspendingatunprecedentedlevels.
From2009,thevehementcompetitivenessofEuropeanmanufacturinghasbeenexposed,andtherewillrepresentauniqueturnaroundinthehistoryofmanufacturingintheEuropeanmarket.Duringthisperiod,therewasanescalationofcompetitivepressuresonUKmanufacturers.Thecompetitivepressuresmanifestedinseveralways:
higherUKwageratesrelativetomanynewAsianexporters,rapidlychangingproducttechnologyinautoindustryrelatedproductsrequiredfrequentnewproductintroductionandtherisingexpectationsofcustomersconcerningproductqualityandcustomerservice.
Duetothefinancialcrisisin2008,allmostEuropemanufacturersstoptheirexpandingprocessordelayitsspeed.SomeEuropeanmanufacturersevenclosedownormergerwithothercompanies.Onthewhole,theEuropeanmanufacturingfacestheunprecedentedchallengesinthisrecessiontime,declinedemandinEuropeanmarketthataffectsUKmanufacturersfailinsale.AndasresultofallmostUKmanufacturershavefinancialcrisisproblemthatbusinessesdonothaveenoughliquidcashinhandtoinvestintofutureinnovation.
Thetrendintherecessiontime,allthemanufacturershavebeendownsizingandreengineeringineffortstoimproveefficiencyandfinancialperformance.Simplifyingtheprocessofmanufacturinganddistribution,reducingwasteandinventory,andincreasingefficiencyallreducecost.Toincreasequalityandreliabilitythatthecustomerexpectsforthepricepaidmustbecommunicatedtoallinvolvedingettingtheproductstothecustomers.(Tompkins,Simonson,Tompkins,andUpchurch,2005)
Pressuretoreducecostsandincreaseresponsivenessisforcinganexaminationmanufacturingandlogistics.Emergingeconomicsinthisrecessiontimeofferpotentialnewmarketsandopportunitiestoreducecost,butitisthesourceofnewcompetitors.Forexample,thehighoilpriceanduniversaldownsizingintheEurope,willoffermorerequirementontheeconomyvehicle.AndthedevaluationofthepoundshouldtheoreticallymakethebusinessexportscheaperthatgivebigcompetitiveadvantagetoUKmanufacturingfirmsonpriceintheEuropeanmarket.
SinceJapanesemanufacturingprinciplesembeddedinJITmanufacturingandTQMhaveelevatedtheroleofcustomersatisfactionandcustomerinputintothedesignandmanufacturingofproducts,thecustomerisbecometoabeforethinkinmanufacturing.Duetothisfinancialcrisisaffection,hugedecreaseofdemandingintheautomarket,makeallthemanufacturersbemoreseriousabouttheircustomersandgivemorerespectforthecustomers.Further,customersatisfactionearnedthroughdependable,reliableproductsandservicesisnowconsideredanimportantcompetitiveadvantageinthevehementcompetitivemarket.Themostnotableaspectofcustomersatisfactionisthatitcannotbeeasilyandquicklyreplicatedbycompetition.Manufacturers,whoearnareputationforsustainedcustomersatisfaction,willbehardtodislodgefromtheirmarkets.(Swamidass,2002)Thenewmanufacturingprinciplesembeddedinevenmoreelevatedtheroleofcustomersatisfactionandmanufacturinglogisticswillbuildbaseonsatisfyingcustomerasorganisationmostimportantmissioninthefuture.
b.Logisticsperspective
Logisticsobjectivesareimprovecustomerserviceandreducesupplychaincosts.Theintensificationofcompetitionraisesconsiderablechallengesforbothstrategyandoperationsinmanufacturingbusinesses.Underthecriticalsituationintheenginemanufacturingindustry,theexcellentmanufacturinglogisticssystemsarerequiredforbusinesstosurviveinthisrecessiontime.
From2008,thesituationbecamecriticalbecausetheglobalfinancialcrisisandtherelatedcreditcrunchplacedpressureonthepricesofrawmaterialsinEurope.ThemetalandsteelpriceisvariableinfinancialcrisesthataffectthecostofrawmaterialforUKmanufacturingfirms.Ifthepriceisrise,thecompanywillsuffer.Andalso,devaluationofthepoundshouldtheoreticallymakethebusinessimportsmoreexpensive,whichdefinitelyincreaseUKmanufacturerexpenses.So,UKmanufacturerhastoestablishunlessmorethanonestableandreliablesuppliertokeepitselfinthesafesituation,because,ifsomesuppliersmayclosedownorincreasetheirprice,thefirmcanhaveotherchoice.Andthatcanhelpthemanufacturertogainthecomparisonbenefitonprice.
Thebadeconomicconditionisincreasinglydifficultformanufacturerstoearnreasonableprofitsiftheydonotaddvalueinthemanufacturingprocess.Movingupthevaluechainrequiresaclearstrategy,anunderstandingofthecustomersandtheiraspirationsandaworkforceandfacilitieswhicharesufficientlyskilledandflexible.Theeffectivesupplychainmanagementwillbemorecrucialtomanufacturingcompaniesinthisrecession.Byworkingwithcustomersandsupplierstoplansupplyanddemand,identifyandqualifyimprovementopportunitiesandimplementprocessandtechnologicalimprovements,organisationscansignificantlyreducecostsandimprovereliabilityofmaterialssupply,stockholdinganddistribution,whileimprovingcustomerserviceandcashflow.Everysinglelogisticsdepartmentisveryimportant,andbusinessfallonelinkwillfailtowholechainofdevelopment.
B.Manufacturingcompetenciesandlogisticsoperation
Inordertosurviveinthisrecession,businessneedtoenhanceitsmanufacturingcompetenciesandlogisticsoperationinthecompetitivemarketthatrelatedtoknowledge,technology,processandstrategy.
Themanufacturingcompetenciesarebasedon:
brandpower,volume,variety,constraintsandlead-time.UnderthebadeconomicsconditioninUK,therearemorerequirementsinthemanufacturer’scompetenceandallleveloforganisation’slogisticsoperations.Themanufacturingfirmhastobecomemoreflexibleandcosteffective,workatreducemanufacturingleadtime,inventoriesandthenumberofsuppliers,andapplythemselvestoincreasesupplyreliabilityandthequalityoftheproduct,distributionsystem,andcustomerservice,andalsorequiremorecapabilitytobringnewproductstomarketsquicker.
Businesshastoleveragesitsstrongbrandimagetoincreaseitsbrandingpower,themoreleveragethefirmwillhaveindeterminingtherangeofvalue-addedservices,physicalproductmovementrequirements,timing,supplychainstructureandstrategy.Thestrongbrandimagederiveslogisticalsupporting,forexample,goodqualityofproduct,andgoodcustomer’sservice.(MingKLim,2009)Theincreasingofnewcompetitiveenvironmentrequiresallthemanufacturersgoingtoincreasetheirproductquality.Thequalityofmanufacturedproductsacross-the-boardhasimprovedoverthisrecessiontime.Inmanufacturingindustries,theminimumthresholdforqualityoftheproductisveryhigh.Thosemanufacturers,whocannotmeetorexceedthisminimumthreshold,cannotsurvive.Statisticalqualitycontrol,JITmanufacturing,andtotalqualitymanagementprincipleshavebeenadoptedbymanufacturersfromavarietyofindustriestoproduceconsistentlyhigherqualityproducts.Improvedandconsistentqualityismadepossibleby:
wastereduction,mistake-proofing,doingthingsrightthefirsttime,improvedcontrolofmanufacturingprocessesinsteadofinspectionoftheoutput,reductioninreworkandrejection,improvedandfrequentoperatortraining,andimmediate,collectivequalityproblemsolvinginqualitycirclesorsimilarteams.(Swamidass,2002)
Manufacturingprocessescanbeclassifiedintermsoftherelationshipofcostperunittovolumeofoutput,thecostofproducingaproductdeclinesasitsmanufacturingvolumeincreases.Businessthathasbiggervolumewillhavemorecompetitiveadvantage.
EffectivetechnologydevelopmentintheEuropemanufacturingindustryisthekeytosucceedinginacompetitivemarket.Businessneedstokeeponestepaheadofthecompetitionthroughnicheproductstocustomers.Innovation,whetheritisthroughinvestinginR&Dtodevelopnewproductsorprocesstechnologies,improvingbackofficeorsalesandmarketingoperations,mustbeinlinewithcompanystrategyandensurebusinessneedsaremet.Highmanufacturingvarietydirectlyimpactsthetypeoflogisticaltransportationandwarehousingservicesrequiredtosupportflexiblemanufacturing.Productiontechnologiesfeatureflexibilitythatfrequentproductrunsandhighrepetitionofsmalllotsizes.Ascontrastedtoeconomyofscale,varietyisreferredtothemanufacturingprocessesthatfeaturevarietyrapidlyswitchesproductionfromoneproducttoanotherwhileretainingefficiency.(MingKLim,2009)
Thethreeprimaryconstraintsthatinfluencemanufacturingoperationsarecapacity,equipment,andchangeover.Manufacturersareseekingtoimproveproductivityandcompetitivenessinthemarketplacethroughperformanceimprovement,investinginaskilledworkforce,effectivesupplychainmanagement,andoutsourcingoperationswhereappropriate.Forexample,goodhumanresourcedevelopmentandmanagem
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