o Flexible Manufacturing and Moss Customization o Flexible manufacturing lean

O flexible manufacturing and moss customization o

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oFlexible Manufacturing and Moss CustomizationoFlexible manufacturing (lean production): Covers a range of manufacturing technologies designed to:Reduce setup time for complex equipment Increase the utilization of individual machines through better scheduling Improve quality control at all stages of the manufacturing processoMass customization: the ability of companies to use flexible manufacturing technology to reconcile two goals that were once thought to be incompatible (low cost and product customization)oFlexible machine cells: Grouping of various types of machinery, a common materials handler, and a centralized cell controller (computer).Helped improve capacity utilization and reductions in work in process and major waste efficiency are major benefits. Also enables companies to customize products to the demand of small consumer groupsProduct Factors o2 product factors impact location decisionsThe product’s value-to-weight ratio
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If the value-to-weight ratio is high, produce the product in a single location and export to other parts of the world If value-to-weight ratio is low, there is greater pressure to manufacture the product in multiple locations across the worldWhether the product serves universal needsWhen products serve universal needs the need forlocal responsiveness falls, and concentrating manufacturing in a central location makes sense Location Production Facilities o2 basic strategies for locating production facilities Concentrating them in a centralized location and serving the world market from thereDecentralizing them in various regional or national locations that are close to major markets oUse centralized production whenTrade barriers are lowImportant exchange rates are expected to be stableThe product’s value-to-weight ratio is highThe product serves universal needsoUse decentralized production whenTrade barriers are highLocation externalities are not important Volatility in important exchange rates is expectedThe product’s value-to-weight is lowThe product does not sure universal needsHidden Cost of Foreign LocationsoCan includeHigh employee turnoverShoddy workmanship Poor product qualityLow productivity
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°The Strategic Role of a Foreign Production SiteThe strategic role of foreign factories and the strategic advantage ofa particular location can change ove time oFactories established to take advantage of low cost labor can evolve into facilities with advanced design capabilities Upward migration in the strategic role of foreign production sites arises because many foreign sites upgrade their own capabilities oComes from2 sources Pressure from the center to improve a site’s cost structure and/or customize a product to the demands of consumers in a particular nation can start a chain of events that ultimately leads to development of
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