Matching customer demand, offering portfolio and operations system in technology-intensive industries

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Doctoral thesis (monograph)
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Doctoral dissertation series / Helsinki University of Technology, Laboratory of Industrial Management, 2005/5
Speed, flexibility, product diversity and customisation have emerged as important sources of competitive advantage for companies, especially in technology-intensive industries. This thesis explores how to simultaneously fulfil divergent customer demands and achieve high operational efficiency through co-management of customer needs, offering portfolio, and operations. The research builds on and contributes to the areas of operations strategy, demand chain management, focused supply chains, and product design for supply chain. The research is carried out as a series of collaborative case/action research interventions in three organisations in electronics industry. The collected data includes about 100 interviews carried out in six European countries, data from operational ERP systems of the three case companies and observations from 14 plant visits. The material is used for identifying relationships between customer needs, offerings portfolios, operations systems and operational efficiency. Secondly, tactics for mitigating the negative effect of product variety are evaluated. Based on cross-case analysis, a model is constructed that formalises the trade-off between serving each customer with a tailored offering and achieving maximum operational efficiency. Research results suggest customer demand as the starting point for operations system design. When customers are buying a product for making it a part of a larger whole, unique offerings delivered via project-oriented operations are needed. When customers are buying the product for its own sake, generic offerings and efficient, process-oriented operations are appropriate. For a company targeting both types of demand, it may be beneficial to design several separate operations concepts. Secondly, the research evaluates pre-defined configurations, product configurability, form postponement and generic resources as tactics for managing the trade-off between a broad offering portfolio and high operational efficiency. For theory, the research provides a model for causal relationships between customer demand, offering portfolio, operations system and performance. Testing of the model testing is suggested as an issue for further research. For management, the thesis provides a structured way of thinking about the complex issues involved in design of offering portfolios and operations systems.
supply chain management, design for supply chain, operations strategy, electronics industry
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