A New World Class Manufacturing Model for Small and Medium Sized Make-to-Order Companies.

Muda, Mohd Shaladdin (2001) A New World Class Manufacturing Model for Small and Medium Sized Make-to-Order Companies. PhD thesis, Lancaster University.

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Abstract

There have been many attempts to build comprehensive models for performance improvement, coming under a number of banners including Total Quality Management (TQM), Business Process Re-engineering (BPR) and World Class Manufacturing (WCM). Comprehensive models of this type are important because they bring together many aspects of Operations Management, and in so doing aid companies to not only identify, but also prioritise the improvements needed. However, although the diversity of the manufacturing sector is widely acknowledged, most of these models pay little attention to company type. Instead, generic, universalistic models are built, which are aimed at all manufacturing companies. This has tended to result in models that assume the manufacture of fairly standard products on a repeat basis, as is found in the more common Make-to-stock (MTS) sector of industry. Thus the models suggest that performance improvements will include a simplified shop floor cellular layout; a fairly constant customer base with easily identifiable product or customer families; a JIT style control of inventory; and so on. Where the assumption regarding repeat production does not apply, large parts of the universalistic models can be irrelevant. This is true for the Make-to-order (MTO) sector that makes highly customised products in low volumes on receipt of customer orders. More importantly, the universalistic approach omits issues that are pertinent to MTO companies. These include the flexibility of process that often requires a job shop layout; methods to control workloads/queues in that environment; systems for determining the price and delivery to quote during the competitive bidding process in which most MTO firms are engaged; and effective means of producing designs for new products. This thesis describes a research project which aims to fill this gap in the literature by developing a comprehensive WCM performance improvement model for the MTO SME sector. The new model, which has been named the "SHEN" model, is therefore contingent on company type. This thesis describes the research process followed to develop this model. This included deductive research whereby the initial model was developed using literature evidence and past experience of the authors, followed by inductive research in which case study data was collected from six MTO SMEs in order to develop the model further. The model aims to help companies determine which performance improvements are needed and how to prioritise them in the race to be world class. The case study research was exploratory in nature and aimed to gain further insights into the issues and solutions that are pertinent to MTO SMEs. The results suggested that some of our initial assumptions needed to be modified. For example, it was initially assumed that MTO companies should aim for a high level of worker flexibility, higher even than is achieved in the MTS sector, given the high variety of customised products. However, it was concluded that training is expensive in this highly skilled sector and that it is often only necessary to have a few workers trained for particular processes. Therefore, a training needs matrix should be devised which establishes the number of people that need to be trained in each skill. Any further training is unnecessary and will soon be wasted as, without the experience of using the new skill, it is likely to be quickly forgotten. The case study evidence also suggested that the need for simple, movable equipment is less important because these companies often need specialised machinery and maintain a flexibility of process through a traditional functional layout. As well as being important aspects of the new model, conclusions of this type are important insights into best practice in MTO companies in their own right.