In times of globalization and increasing product complexity and variety due to sophisticated customer demand, new priorities for production planning must be set. The observable trend from supply-driven to demand-driven production will continue forcing more and more manufacturers to revise their production concept.
A possible approach to face this challenge is the pull-based Build-to-Order (BTO) system. In terms of production planning, it will be indispensable to integrate the entire process chain. Nervousness is largely caused by external parties such as the supplier and the customer. Therefore, integrated approaches with focus on the customer will gain in importance and become the dominant cross-industrial mode of production.
In this paper Build-to-Order is analyzed and evaluated as a specific solution approach by focusing on how it dampens nervousness within the production plan. Broadly speaking, nervousness within the production process can be caused by demand variability (downstream) and supply difficulties (upstream). In this seminar paper Dell serves as an example to illustrate BTO's effect on nervousness reduction.
Table of Contents
1. Abstract
2. Introduction
3. Build-to-Order Strategy
4. Dell's Implementation of Build-to-Order
5. Modularization and Supplier Management
6. Demand-Driven Production Adjustments
7. Summary and Conclusion
Objectives and Topics
The primary objective of this seminar paper is to analyze the Build-to-Order (BTO) production strategy as a mechanism to mitigate "nervousness" in production planning. The paper investigates how shifting from forecast-driven to demand-driven systems enhances operational agility and reduces waste caused by variability, using Dell Inc. as a primary case study.
- Analysis of pull-based production versus traditional push-based systems.
- Evaluation of how modularization and supplier integration reduce production bottlenecks.
- Investigation of demand-driven scheduling algorithms and their impact on system stability.
- Exploration of how BTO principles are applied across different industrial sectors.
- Examination of the role of human factors and workforce alignment in BTO environments.
Excerpt from the Book
Build-to-Order as a Competitive Strategy to Dampen Nervousness within the Production Plan Exemplified by the Assembly Process of Dell
Demand-driven production and supply chain operations are prevalent issues in today's manufacturing environment. As globalization proceeds, organizations face more complex and volatile planning scenarios than ever. Sourcing of material is now conducted on a global scale leading to complex supply chains with fragmentations and extensions worldwide. Product life cycles are shortening due to captivating technological innovations. The technological progress is also increasing product complexity and enabling a wide product variety with extensive customization available. Intense competition due to the reduction of trade barriers increases the consumer's bargaining power, leading to shorter customer tolerance time. These circumstances make it nearly impossible to improve demand forecast accuracy (cf. [Smi 2013], p.9f). Nevertheless, forecasts are often converted to planned orders committing capacity, material, space, time, etc. to wrong assumptions.
Accordingly, more and more analysts and industry experts commend a shift from forecast-driven to demand-driven manufacturing. Legacy push-based systems such as Material Requirement Planning (MRP) are cumbersome while meeting the demand-driven pull-based requirements of today's production environment. In order to drive velocity and on-time production, a transformation must be induced in both philosophy as well as in IT systems. To enhance competitiveness, companies increasingly focus on optimizing production and supply chain management. The continuously increased performance of deployed machinery and facility reduced the direct costs and shifted the emphasis of improvement towards operation and process organization (cf. [Bec 2008]). The advancement of information and communication technology pushes globalization by overcoming constraints in space and time. The customer’s bargaining power further increases by allowing him to compare prices, quality and services more easily and immediately. The customer demands a customized product.
Summary of Chapters
Abstract: Provides an overview of the challenges in modern production planning and introduces BTO as a solution to mitigate production nervousness.
Introduction: Outlines the shift from push-based to demand-driven manufacturing due to globalization and increased consumer demand for customization.
Build-to-Order Strategy: Defines BTO and contrasts it with Build-to-Stock (BTS) and Assembly-to-Order (ATO) frameworks.
Dell's Implementation of Build-to-Order: Discusses Dell's historical implementation of BTO and its goal to reduce shipping times and inventory costs.
Modularization and Supplier Management: Examines how standardizing components and integrating suppliers via "Supplier Logistic Centers" minimizes production disruptions.
Demand-Driven Production Adjustments: Explores how Dell aligns labor and production scheduling algorithms to match fluctuations in customer order behavior.
Summary and Conclusion: Summarizes the effectiveness of the BTO strategy and its broader applicability in industries like automotive and fashion.
Keywords
Nervousness, Build-to-Order, BTO, production planning, supply chain management, Dell, modularization, demand-driven, mass customization, supplier network, assembly process, inventory, forecast accuracy, production scheduling, operational agility.
Frequently Asked Questions
What is the core focus of this seminar paper?
The paper focuses on how the Build-to-Order (BTO) strategy acts as an effective competitive tool to minimize "nervousness"—or instability—within production planning systems caused by demand and supply fluctuations.
What are the main thematic fields?
The key themes include supply chain optimization, demand-driven manufacturing, modularization, vendor management, and the specific case study of Dell's assembly operations.
What is the primary research goal?
The goal is to demonstrate how BTO minimizes reliance on inaccurate forecasts by aligning production directly with real customer orders, thereby reducing resource waste and operational volatility.
Which methodology is applied?
The paper uses a descriptive case study methodology, analyzing the internal logistics, production strategies, and supplier relations of Dell to exemplify the theoretical benefits of BTO.
What is covered in the main part?
The main part covers the transition from push to pull systems, the strategic importance of modular components, the role of Supplier Logistic Centers (SLC), and the use of heuristic scheduling algorithms.
Which keywords define the work?
Central keywords include Nervousness, Build-to-Order (BTO), Mass Customization, Modularization, and Supplier Network.
How does Dell manage component availability issues?
Dell uses a combination of "Supplier Logistic Centers" (SLC) for proximity, strict supplier screening to ensure competence, and a "sell what you have" sales strategy to guide customers toward available components.
What role does modularization play in reducing nervousness?
Modularization reduces the complexity of the assembly process and allows for higher product variety using fewer standardized components, which in turn leads to higher quality and fewer production rejects.
How does Dell handle fluctuating demand cycles?
Dell adjusts its workforce hours (e.g., introducing weekend shifts) and employs advanced production-scheduling algorithms that minimize setup times for different product families on identical production lines.
- Citar trabajo
- Nina Schwenniger (Autor), 2014, Build-to-Order as a Competitive Strategy to Dampen Nervousness within the Production Plan, Múnich, GRIN Verlag, https://www.grin.com/document/300641
