17Standardization:Traditional Manufacturing•Set schedules as early as possible•Use large lot sizes to make efficient use of equipment and minimize costs•Large centralized facilities take advantage of economies of scale•However, aggregate demand information is more accurate than disaggregate data
18Standardization:Modularity in Product and Process•Modular Product:–Can be made by appropriately combining the different modules–Entails providing customers a number of options for each module•Modular Process:–Each product undergo a discrete set of operations making it possible to store inventory in semi-finished form–Products differ from each other in terms of the subset of operations that are performed on them
19Standardization:Modularity in Process•Semiconductor wafer fabrication is modular since the type of chip produced depends on the unique set of operations performed•Oil refining is not modular since it is continuous and inventory storage of semi-finished product is difficult
20Standardization:Modularity in Product and Process•Are modular products always made from modular processes?
21Standardization:Modularity in Product and Process•Modular products are not alwaysmade from modular processes–Bio-tech and pharmaceutical industries make modular products but use non-modular processes–Many products are made by varying the mix of a small number of ingredients
22Types of Standardization•Part Standardization–Common parts across many products–Risk pooling; Economies of scale•Process Standardization–Postponement(Delayed Differentiation): Make a generic/family product that is later differentiated into a specific end-product–Re-sequencing: Modify the order of manufacturing step
23Postponement: Key Concepts•Delay differentiation of products in the same family as late as possible•Enables the use of aggregate forecasts•Enables the delay of detailed forecasts•Reduces scrapped or obsolete inventory, increases customer service•May require new processes or product design with associated costs
24Postponement Considerations•Tradeoff: –Increased product cost–decreased inventory•Need to decide where to postpone - the push-pull boundary•Position in product lifecycle is factor in postponement strategies•Consider tariffs and duties
26Process Standardization:Example•Hewlett-Packard LaserJets–LaserJets are manufactured in Japan–Previously, the printers had two different power supplies (110, 220 volts)–An improved design enables a single power supply to work for both voltages.