Global Demand Pipeline Management of Box Build Manufacturing at an Electronics Manufacturing Services Company

Abstract

This thesis contributes with a new production control model, which enables production according to actual consumption instead of forecasts, and shortens lead times dramatically due to turnaround process improvement.

The model is developed through first studying the underlying theories in the field, assessing the current production control practices at the case company, and studying practices at companies successful in production control. Based on these and an empirical research project on the concept, carried through on-site at the studied factory, the final framework for the demand pipeline solution is formed.

The results show the new model's success; the lead time between detecting a need and product completion decreased with roughly 90%, total throughput time of the entire order-delivery process was reduced with 15%, order processing became significantly simpler, the order-delivery process became much more agile and responsive to changes, and demand-accurate production was enabled. Using the developed model, production control of products of relatively high volume and low mix moves to a new dimension where concerns about high inventory levels, product shortages and overproduction become dramatically less, as production is controlled to produce quantities in order to replenish actual consumption. These advantages are especially superior when compared to current practices at manufacturers in the Far East. Although the benefits are significant, the model is quite simple and not that complicated to implement. The system basically needs some requirements to be fulfilled and an ability to maintain constant exchange of consumption data. When these are met, the implementation effort required is considered relatively minor. The key recommendation given to the case company is to start implementing the actual demand pipeline solution and work through the specified IT arrangements.