Production strategies for quick response

As the demand by all partners in the supply chain for a quick response increases, the greater will be the pressure placed upon manufacturing to meet the customer s needs for variety in shorter and shorter time-frames. 

The answer has to lie in flexibility. As we have already observed, if it were possible to reduce manufacturing and logistics lead times to zero then total flexibility could be achieved. In other words the organisation could respond to any request that was technologically feasible in any quantity. Whilst zero lead times are obviously not achievable, the new focus on flexible manufacturing systems (FMS) has highlighted the possibility of substantial progress in this direction. 

The key to flexibility in manufacturing is not just new technology, e.g. robotics, although this can contribute dramatically to its achievement. The main barrier to flexibility is the time taken to change to change from one level of volume to another and to change from making one variant to another. Typically we call this set-up time . It will be apparent that if set-up times can be driven as close as possible to zero then flexible response to customer requirements presents no problem. 

What in effect we are seeing is a fundamental shift away from the economies of scale model, which is volume based and hence implies long production runs with few change-overs, to the economies of scope model, which is based upon producing small quantities of a wider range, hence requiring more change-overs. 

A classic example is provided by Benetton, the Italian fashion goods manufacturer and distributor, which has created a worldwide business based upon responsiveness to fashion changes - with a particular emphasis upon colour. By developing an innovative process whereby entire knitted garments can be dyed in small batches, they reduced the need to carry inventory of multiple colours, and because of the small batch sizes for dying they greatly enhanced their flexibility. Benetton s speed of response is also assisted by the investment that they have made in high-speed distribution systems, which are themselves aided by rapid feedback of sales information from the marketplace. 

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