Lean control for make-to-order companies : integrating customer enquiry management and order release

Thurer, Matthias and Stevenson, Mark and Silva, Cristovao and Land, Martin and Fredendall, Lawrence and Melnyk, Steven A. (2014) Lean control for make-to-order companies : integrating customer enquiry management and order release. Production and Operations Management, 23 (3). pp. 463-476. ISSN 1059-1478

Abstract

A lead time that is short, predictable, and reliable is an increasingly important criterion in supplier selection. Although many companies may achieve this through lean implementation, high-variety manufacturers, for example, small and medium-sized make-to-order companies, have found that lean's planning and control techniques do not apply. This article outlines a planning and control concept known as workload control (WLC) that integrates customer enquiry management, including a due-date setting rule, with order release control. Simulation is then used to assess its impact on shop performance. Results demonstrate that an integrated WLC concept can reduce the percentage of tardy jobs—so short lead times can be realistically quoted—while also reducing and stabilizing workloads. WLC can level demand and production over time when work is not standardized and it is not possible to synchronize flows on the shop floor. Results are shown to be robust to changes in routing characteristics, the mix of orders with due dates specified by the customer and proposed internally, and the strike rate (or order-winning probability). Hence, an integrated approach to WLC represents an important step toward achieving lean in make-to-order companies.