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Institute
Volatile electricity prices caused by an increase of renewable energy sources push producing companies towards taking in an active role in balancing the electricity grid. Possible actions at the customer side to actively adapt to volatile energy prices are called demand response actions. In production logistics such actions can be the modification of production schedules motivated by possible economic benefits. So far, the focus in scheduling problems has been the optimization in the dimensions of quality, time and costs. This paper presents the results of a simulation study on the economic benefits of demand response actions for a generic production system.
Companies in the manufacturing industry are shifting towards a more service-oriented business model. One major challenge of this transformation is the information exchange between the different stages of the product-service-lifecycle.
We extend the existing body of knowledge by conducting an empirical study in the German manufacturing industry, addressing the cause-effect relationship between 1) information gathering over the product-service-lifecycle, 2) data analytics 3) interpretation and use of new information and 4) distribution of new product related information and the impact of these four aspects on performance.
The analysis reveals five different success factors with a significant impact on innovation and operation excellence. The implications from our research can help to develop new and more practical oriented Lifecycle-Product-Service-System approaches on the one hand. On the other hand it enables companies to focus on activities leading to higher service efficiency. Creating new stimuli will transform their existing business model to a more service-oriented one.
Increasing productivity in product-service systems is a vital success factor for industrialized economies and individual businesses. The service production is typically described as an integrated value chain setting, in which the provider and the customer are co-creators.
This paper embraces a characteristic curve model in order to illustrate the influence of the customer on the productivity of service production. The characteristic curves are derived from a system dynamics simulation model for a synchronized takt-based service production. In conclusion this research leads to designs recommendations for service production systems in order to reduce lead times and increase adherence to delivery dates.
Applying Game Theory in Procurement. An Approach for Coping with Dynamic Conditions in Supply Chains
(2014)
Producing companies are facing continually changing conditions accompanied by higher requirements with respect to the flexible configuration of their supply chain. The challenge resulting from this initial situation is to develop systems that have the availability of adjusting their planning procedures and aims depended on the situation and therefore accommodate the increasing demand for flexibility. To address this challenge game theory seems to be a new and promising approach. The aim and added-value of the research work described here is to develop a decision model for the area of procurement using solutions concepts of game theory. Especially in times of high volatility such a decision model can support material requirements planners better than today's common selective planning logics.
In this paper the model to be solved by game theoretic solution concepts is presented. A research study has been conducted which proved the need for combining existing methods of procurement quantity calculation by means of game theoretic solution concepts. Some of the results of this study are presented in this paper. In the last part of the paper a structure for classifying game theoretic models is presented. This structure should support in selecting the appropriate solution concept for real-life decision-situations and is able to support in any practical application-field finding out the most appropriate game theoretic solution concept.
The growth of installed wind capacities generated a market with a huge variety of service offers for operation & maintenance of wind turbines. Different parties like manufacturers, component suppliers as well as independent service providers compete for the attractive after sales market. An innovative service offer which seems to meet the customers’ requirements is the guarantee of availability for wind turbines. However, these service providers are facing new challenges regarding their performance potentials and their financial risks occurring from possible penalties. Service providers have to reconsider their preparedness of performance, their new occurring financials risks, their cooperation and qualification level as well as their localization of service bases. To be able to quantify these new challenges and risks a simulation model has been designed in the context of a German research project named “WinServ”.
Human behavior in supply chains is insufficiently explored. Wrong decisions by decision makers leads to insufficient behavior and lower performance not only for the decision maker, but also for other stakeholders along the supply chain. In order to study the complex decision situation, we developed a supply chain game in which we studied experimentally the decisions of different stakeholder within the chain. 121 participants took part in a web-based supply chain game. We investigated the effects of gender, personality and technical competency on the performance within the supply chain. Also, learnability and the effect of presence of point-of-sale data are investigated. Performance depended on the position within the chain and fluctuating stock levels were observed in form of the bullwhip effect. Furthermore, we found that risk taking had an impact on the performance and that the performance improved after the first round of the game. [https://link.springer.com/chapter/10.1007/978-3-642-39226-9_46]
The main challenge in all application areas of EV usage still is the energy storage within, as well as the energy transmission into an EV. However, this storage and transmission of energy also allows for synergies with a smart grid, if the information is adequately exchanged between roles in the energy and mobility sector. Since the energy transmission is a so called “fixed and intersection point” of E-Mobility, interoperability is required not only on an electrical (e.g. plugs), but also on an informational level. Standardization efforts are currently underway (e.g. IEC 15118), yet a comprehensive, consolidating view on the information system around energy transmission is missing. Therefore, this paper suggests a generic information system architecture for e-mobility (EM-ISA) derived from the Smart Grid Architecture Model (SGAM). EM-ISA shall be a base for companies to develop innovative services for their particular, ICT-enabled E-Mobility application area while at the same time stay at important points informational interoperable at the fixed and intersection point of energy transmission.
Producing companies are confronted with a growing number of product ramp-ups, since product life cycles are decreasing and product diversity is increasing. Production Planning and Control (PPC) of ramp-up products is particularly challenging, as there is a significant lack of reliable experienced data.
The information deficit is exceptionally high for the first step of PPC process, namely Production Program Planning (PPP). The paper in hand proposes an innovative approach of cybernetic PPP that enables companies with numerous ramp-ups to design reliable and fast PPP processes that can react highly adaptable on unpredictable environmental disturbances. The Viable System Model (VSM) is used as frame of reference for the design of PPP processes in line with principles from management cybernetics.
As industrial service portfolios grow, many companies overlook the implications of their business operations: rising complexity and resulting complexity costs. One reason are nonexistent tools that help service managers to decide in planning phases with an adequate effort about the implications that variety and complexity decisions have on the complexity costs of their portfolio. This paper depicts the challenges service companies have to face in this context and presents a concept of a heuristic approach to evaluate the complexity costs for industrial services. The concept is being developed in strong cooperation with industrial partners.
For a considerable time, European companies in the capital goods industry experience stagnating growth in material goods markets. Moreover, increasing international competition forces European companies to improve their market position. In order to stay successful, an increasing number of companies adapt their businesses from manufacturing to service provider. Unfortunately, the number of companies who manage to turn their portfolio change into a competitive advantage is comparatively low. Therefore, this paper focuses on the development of a framework for the positioning as industrial services provider. Besides, it provides support for management in shaping the changes that occur with the transformation.
This paper presents a simulation approach for service production processes on the basis of which an optimal operating point for service systems can be identified. The approach specifically takes into account the characteristics of human behavior. The simulation is based on a system theory approach to the service delivery process. A specific use case of the simulation approach is presented in detail to illustrate how characteristic curves are deduced and an optimal operating point is obtained.
Production systems are exposed to an increasing planning-related uncertainty and susceptibility. The inter-company coordination has not sufficiently been considered in contemporary concepts of supply chain management. Against this background, it is crucial to provide a suitable tool that increases the planning capability of the players and the robustness of the supply chain as a whole. Therefore, this article provides the relevant causes and effects of planning uncertainties within the production planning and presents based on that an inter-company supply chain planning concept.
A company can choose between three generic competitive strategies. Alongside the strategy of cost leadership are the strategy of differentiation and the strategy of focussing on niches, although we will not be discussing this latter any further here. The strategy of cost leadership is based on the achievement of “economies of scale”, so generating advantage from the benefits of cost reduction, learning curve effects and automation. In the strategy of differentiation the focus is on “economies of scope” which enable the customer-specific products to be offered, but this is generally achieved only with an increase in the complexity of products and processes. In the past it was assumed that these two strategies were mutually exclusive, as an increase in the economies of scale basically leads to a reduction in the economies of scope, and vice versa. But in order to survive in the international competitive arena companies in the high-wage countries need increasingly to offer individually tailored products at competitive prices. The target to be aimed at is therefore customer-specific products at the cost of mass production, so resolving the dilemma between economies of scale and economies of scope. For this it is necessary to optimise the alignment of all the structural elements in both the product and its production, because of the high level of their interdependence.
The areas on which we will focus our review and designs in the following will be what are known as product-production systems, or more briefly, production systems. This topic includes not only the resources and processes of the value creation systems, but also the products produced and offered on the market by a company as one connected entity. In order to tackle the challenges mentioned above, it is necessary to make it possible to measure and compare the current position of any given production system on the see-saw between economies of scale and economies of scope, and then be able to redesign specific facets of them as a second phase. A method of integrative evaluation and design of production systems is presented below for this purpose.
Industrial production in high-wage countries like Germany is still at risk. Yet, there are many counter-examples in which producing companies dominate their competitors by not only compensating for their specific disadvantages in terms of factor costs (e.g. wages, energy, duties and taxes) but rather by minimising waste using synchronising integrativity as well as by obtaining superior adaptivity on alternating conditions. In order to respond to the issue of economic sustainability of industrial production in high-wage countries, the leading production engineering and material research scientists of RWTH Aachen University together with renowned companies have established the Cluster of Excellence “Integrative Production Technology for High-Wage Countries”. This compendium comprises the cluster’s scientific results as well as a selection of business and technology cases, in which these results have been successfully implemented into industrial practice in close cooperation with more than 30 companies of the industrial production sector.
Maximising economies of scale in individualised production is a vital issue for producing companies in high wage countries. A decisive enabler for this is the management of product and process complexity by systematic standardisation. Due to the strong and far-reaching impact of complexity on the value added chain, its management requires an integrative consideration of the entire product and production system.
The following paper introduces a methodology facing this challenge. The core element of this methodology is an integrative and complexity-focused assessment model. This assessment model has been validated experimentally by analysing key company data from more than 50 German toolmaking firms. Findings of this empirical investigation are presented in this paper.
Manufacturing companies of the machinery and equipment industry find themselves more than ever exposed to a rapidly changing competitive environment. In particular, the resulting diversity of planning and control processes confronts organisations and information systems with a significant coordination effort. To this day, planning and execution of order processing – from offer processing to the final shipment of the product – is still a part of the production planning and control (PPC), which is almost entirely integrated into information systems. Though, in order to manage dynamic influences on processes within order processing, there can be found a deficiency in the processing of decision-relevant and real-time information. Partly, the reason for this is a missing or incorrect feedback of process relevant data, so that the planning results, gained by the use of information systems, differ to the current process situation.
The concept of Manufacturing Resource Planning (MRP II) still represents the central logic of production planning and control. However, the centralised and push-oriented MRP II planning logic is not able to plan and measure dynamic processes adequately, which, due to diverse disturbances, often occur in production environments. Furthermore, specific weaknesses of MRP II-based systems are the lack of support for order releases, the planning principle based on average values and the successive planning method as well as the use of limited partial models. As a result a successive planning method leads to a dissection of PPC-tasks into smaller work packages and so strides away from a holistic approach and the achievement of an optimal solution. Similarly, a planning, focusing on a general business objective system, using a partial planning approach due to isolated considerations is not possible. Insufficient consideration of the current load horizon and the current capacity utilization, non-existing or delayed feedback on order progress as well as faults and poor availability and transparency of information can be named as further weaknesses of MRP II-based systems.
Remote services are services enabled by information and communication components and therefore do not require the physical presence of a service technician at the service object to provide a task. The impact of remote service on the capital goods industry has been increasingly significant over the recent yeas. Still many companies struggle with developing and implemenling successful business model, for remote service. This leads to a lot of unaccomplished benefits for the customer as well as for the companies themselves. A survey throughout companies in Ihe industrial machine and plant production sector was conducted in order to determine what successful companies do differently from those that cannot efficiently implement remote service business models.
The study presented in this chapter identifies key suceess factors of companies that effectively implemented remote services for their products. In order to identify the successful companies a scale for measuring remote service success was developed. Only by the use of this scale further findings regarding the success factors were possible. Key findings include the fact that successful companies actively market their remotle service to their customers. Generally they try to approach their remote service business from the operating company's perspective.
One of the central success factors for production in high-wage countries is the solution of the conflict that can be described with the term “planning efficiency”. Planning efficiency describes the relationship between the expenditure of planning and the profit generated by these expenditures. From the viewpoint of a successful business management, the challenge is to dynamically find the optimum between detailed planning and the immediate arrangement of the value stream. Planning-oriented approaches try to model the production system with as many of its characteristics and parameters as possible in order to avoid uncertainties and to allow rational decisions based on these models. The success of a planning-oriented approach depends on the transparency of business and production processes and on the quality of the applied models. Even though planning-oriented approaches are supported by a multitude of systems in industrial practice, an effective realisation is very intricate, so these models with their inherent structures tend to be matched to a current stationary condition of an enterprise. Every change within this enterprise, whether inherently structural or driven by altered input parameters, thus requires continuous updating and adjustment. This process is very cost-intensive and time-consuming; a direct transfer onto other enterprises or even other processes within the same enterprise is often impossible. This is also a result of the fact that planning usually occurs a priori and not in real-time. Therefore it is hard for completely planning-oriented systems to react to spontaneous deviations because the knowledge about those naturally only comes a posteriori.
Companies in high wage countries are increasingly confronted with the challenge of optimizing economies of scope and economies of scale simultaneously to succeed on a global market place. An integrated assessment of production systems facing this challenge is essential to evaluate the actual state of a company and to provide a basis for drawing the right conclusions to reconfigure production systems successfully.
In this paper an integrated model for measuring economies of scope as well as economies of scale is introduced, defining the fundamental domains of a production system. The major objectives resulting from the overall scale-scope dilemma are broken down for each domain and the main dimensions for an assessment of each domain are defined. A new measure named Degree of Efficiency is defined, quantifying the fulfillment of the opposing objectives in each domain and hence, the contribution to an overall resolution of the scale-scope dilemma.