Chapter 9 Moving frontier analysis: An application of Data Envelopment Analysis for competitive analysis of a high-technology manufacturing plant

Competitive analysis of plants is fundamental to enhancing the competitiveness of manufacturing firms. Moving Frontier Analysis (MFA), proposed in this paper, is a new application of Data Envelopment Analysis (DEA) to conduct competitive analysis of a high-technology manufacturing plant. The development and application of MFA was done in collaboration with the management of a US merchant semiconductor manufacturing firm. A wafer fabrication plant of the firm served as the research site for this study. MFA provides a means to determine (i) the gap between a plant's best performance and the best of competition, and (ii) whether or not it will be possible to close this performance gap, and if so, the time it will take to do so. From an implementation standpoint, competitive analysis using MFA can be conducted even if (i) accurate and detailed data on comparable plants of competitor companies are not available, and (ii) the operations of competitors' plants are dynamically changing. An application of MFA for conducting competitive analysis of the wafer fabrication plant is presented. This application illustrates how MFA makes it possible to estimate (i) the unit cost of production for the best of competitors' plants using aggregate operational information on industry best practices, and (ii) the time it will take for the plant's unit cost of production to catch up with the best of competition using the technologies in operation.     

基于系统动力学的产业集群对企业绩效的影响机制分析

以系统动力学为基础,研究了产业集群对企业绩效的影响机制。分别建立了外部资源环境、发展规模及科研创新能力对企业绩效的影响系统因果图,在此基础上开展了产业集群对企业绩效影响的全过程动力分析。以上海市医药制造产业集群为例开展了实证研究,使用Vensim模拟软件进行了模拟仿真,详尽探讨了影响机制中正负反馈回路。结果表明,产业集群的外部资源环境、产业集群的发展规模和产业集群的科研创新能力对集群内企业的发展有着正向影响,政府和集群内企业可以通过加大对集群科研实力的投资力度、改善产业集群外部环境、扩大产业集群发展规模三个方面来提高产业集群内的企业绩效,促进产业集群内企业的可持续性发展。     

The relationship between quality management practices and their effects on quality outcomes

Recent research into quality management has examined the relationship between quality management and performance. The purpose of this study is to identify the relationships between quality management practices, and to examine the direct and indirect effects of these practices on quality outcomes by means of replication research. The paper uses a path analysis and a research model is tested using cross-section data collected from 106 certified firms in Spain. The findings support the relationships between quality management practices and the positive impact of these practices on quality outcomes. Evidence is also found confirming previous research showing that a firm could transfer the organizational forms and behaviours underlying quality management to other countries with similar cultures. However, as minor differences emerge, managers should consider the cultural issues. The contribution of the paper is that it provides empirical support for direct and indirect effects of quality management on performance in Spain compared to previous studies carried out in USA and Korea.     

Balancing assembly lines with tabu search

Balancing assembly lines is a crucial task for manufacturing companies in order to improve productivity and minimize production costs. Despite some progress in exact methods to solve large scale problems, softwares implementing simple heuristics are still the most commonly used tools in industry. Some metaheuristics have also been proposed and shown to improve on classical heuristics but, to our knowledge, no computational experiments have been performed on real industrial applications to clearly assess their performance as well as their flexibility. Here we present a new tabu search algorithm and discuss its differences with respect to those in the literature. We then evaluate its performance on the Type I assembly line balancing problem. Finally, we test our algorithm on a real industrial data set involving 162 tasks, 264 precedence constraints, and where the assembly is carried out on a sequential line with workstations located on both sides of the conveyor, with two possible conveyor heights and no re-positioning of the product. We discuss the flexibility of the metaheuristic and its ability to solve real industrial cases.     

Evaluation of Value Time Sequencing Rules in a Real World Job Shop

This paper reports a case study carried out in an Engineering industry manufacturing nineteen types of products against orders. The objective of this research was to select the sequencing rule that will optimise the combined performance of work-in-process inventory in monetary terms and delivery performance. Past studies in this area show that rules based on either the value of the orders or the value-processing time of the orders have not been investigated. This study evaluates the performance of the two sequencing rules based on the value and processing time of the orders: (i) Lowest Value Time rule (LVT) (ii) Highest Value Time rule (HVT). Incidental to this study, a few other sequencing rules were evaluated. To carry out the investigations, a simulator using GPSS (General Purpose Simulation System) was developed.     

工程供应链内涵与关键要素分析

工程供应链管理对于提高工程绩效具有十分重要的意义,已经成为工程管理的重要议题之一。工程的系统复杂性使得制造型供应链的一些相关理论可能并不适用于工程的实践过程。基于此,首先识别与分析工程实践过程中所包含的供应链理论元素;界定与分析工程供应链的概念与内涵;梳理并总结工程供应链与传统制造型供应链的异同;在此基础上,厘清工程供应链管理过程中应关注的系统要素,旨在为提高工程供应链管理绩效提供理论依据。     

Demand uncertainty in construction supply chains: a discrete event simulation study

The delivery of construction projects is typically an assembly operation involving a high number of subassemblies and materials brought on site by the supply chain. However, although supply chain management in construction has attracted significant attention, paradoxically little focus has been placed on construction supply networks and operations. This paper places emphasis on supply chain operations by looking at the logistics function of construction material suppliers. Specifically, the paper examines the impact of demand uncertainty on supply chain performance in order to assess the capacity of material distribution companies to provide a timely and cost-efficient service to the construction industry. The study adopts a discrete event simulation approach to assess the impact of demand fluctuations on two crucial logistics performance measures; lead time and cost efficiency. The results show that lead times are particularly sensitive to fluctuations under conditions of low demand. The findings also reveal that, although transport is a significant cost element for lower demand levels, higher inventory costs result in a negative exponential relationship between increasing demand and cost efficiency.     

The practice of operational research in Taiwan

This paper presents the results of a questionnaire survey of operational research/management science (OR/MS) practices in Taiwanese companies. The survey was addressed to the current status and future perspectives of OR/MS in Taiwan. During the spring of 2001, 2000 questionnaires were mailed to the top 1000 domestic manufacturing firms and top 1000 domestic service organizations. These asked questions concerning specific OR/MS techniques being used, application areas of OR/MS, reasons for using OR/MS, reasons for not using OR/MS, difficulties encountered practically, and future perspectives. Results from 262 valid respondents provided several informative findings. Compared with the 1995 survey of Kao et al, it found that the percentage of companies that have used OR/MS techniques increased from 62.7% in 1995 to 76.7% in 2001. Also, the percentage of companies that have never heard of OR/MS decreased from 16.1% in 1995 to 11.1% in 2001. Because of the Taiwan government recently developing educational and training programs in OR/MS, it found that the importance of OR/MS has been recognized by Taiwan companies as an efficient management tool for economic development, and the usage of OR/MS will continuously increase.     

Strategic capacity planning for light emitting diode (LED) supply chains across Taiwan and China

This paper describes a mixed-integer programming (MIP) model formulated for strategic capacity planning for light emitting diode (LED) makers of Taiwan, major companies in the global LED market. These firms have complex supply chains across Taiwan and China, and the region’s unique political and economic environment has created not only competitive advantages but also challenges in supply chain management: government regulations require that customer orders be accepted from Taiwan or China according to customer attributes; when conducting manufacturing, Taiwanese firms may need to transfer orders across national borders for reasons such as manufacturing technology (the required technology is available only at certain manufacturing facilities) or more efficient capacity utilization; and there are operations to be performed with specific processing requirements to follow, posing substantial challenges for planners. Motivated by the significance of these firms in the global market, we develop a MIP model with novel features to support their strategic capacity planning, covering demand and manufacturing-related decisions, including order acceptance and transfer, manufacturing starts, capacity expansion, and logistics. We illustrate the model’s performance using modified industry data in a numerical example; we also describe the potential impacts the model may create in industry applications.     

Knowledge supply network

This paper introduces the idea of knowledge supply network (KSN). Being an extension of the conception of supply chain management familiar to operations managers, knowledge supply network provides a most natural framework for operations management to contribute to the issues of knowledge management and intellectual capital, while retaining its tradition of practicality. This paper has three parts: (i) set up the idea of KSN, and clarify the focus of the paper; (ii) through case examples, illustrate the nature and structure of KSN; and (iii) point out the connection of KSN to business strategy, operations, information systems, and knowledge management.     

Impact of information technology on the performance of logistics industry: the case of Hong Kong and Pearl Delta region

Over the last decade, a number of research studies have advocated the use of information technology (IT) in different aspects of logistics and distribution operations. This study examines the current state of the use of IT and its impact on logistics service performance through a survey of 210 logistics companies in Hong Kong and the Pearl River Delta region. A hypothetical model is also proposed in which the theories of the market-based view and the resource-based view are applied to link up the implications of IT capabilities with logistic performance. The model was tested using structural equation modelling. The findings suggested that (i) IT implementation directly enhances the service quality of the logistics companies; (ii) the impact of IT implementation improves service quality thereby creating competitiveness.     

Predicting performance measures for Markovian type of manufacturing systems with product failures

Optoelectronic products are typically assembled and tested in a flow shop environment with multiple processors at each stage. The first few stages are dedicated for assembly and the later stages are dedicated for calibration and testing. Whenever a product (or job) fails at a stage, it is routed back to one of the downstream stages or to the same stage (depending upon the nature of the failure). Consequently, the product could circulate several times between the current stage and the preceding stage(s) before moving to the next stage. Estimating the performance measures (such as WIP and flow time) of such manufacturing systems is not trivial. This paper presents analytical approximations to estimate the performance measures of a manufacturing system with multiple product classes, job circulations due to failures, and some resources being shared among different product classes. The analytical approximations were verified using simulation on several problem instances. The experimental study indicates that these approximations can be used by operations managers to estimate the performance measures of a manufacturing system with product failures.     

A dispatching rule-based approach to production scheduling in a printed circuit board manufacturing system

This paper focuses on a production-scheduling problem in a printed circuit board (PCB) manufacturing system that produces multiple product types with different due dates and different manufacturing processes. In the PCB manufacturing system, there is a number of serial workstations, and there are multiple parallel machines at each workstation. Also, setup operations are required at certain workstations or machines, and some product types have re-entrant flows. We develop new dispatching rules for scheduling at each workstation, considering the special features of PCB manufacturing. With the dispatching rules, we determine not only the start time of each lot at a machine but also the batch size of each product at each machine. Simulation experiments are carried out to test the performance of the production-scheduling method and dispatching rules devised in this study. Results show that the production-scheduling method suggested in this study performs better than methods with well-known dispatching rules and heuristic algorithms for lot sizing in terms of the total tardiness of orders.     

Comparative performance measurement in regulation: the case of English and Welsh sewerage services

This paper discusses the use of comparative performance measurement by means of Data Envelopment Analysis in the context of the regulation of English and Welsh water companies. Specifically, the use of Data Envelopment Analysis to estimate potential cost savings in sewerage is discussed as it fed into the price review of water companies carried out by the regulator of water companies in 1994. The application is used as a vehicle for highlighting generic issues in terms of assessing the impact of factors on the ranking of units on performance, the insights gained from using alternative methods to assess comparative performance, and the issue of assessing comparative performance when few in number but highly complex entities are involved. The paper should prove of interest to those interested in regulation and, more generally, in the use of methods of comparative performance measurement.     

Statistical process control for monitoring scheduling performance—addressing the problem of correlated data

In both manufacturing and service operations effective scheduling plays an important role in achieving delivery performance and in utilizing resources economically. Classical scheduling theory takes a narrow, static view of performance. In reality the assessment of scheduling performance is a particularly difficult task. Typically scheduling is an activity that takes place repeatedly over time in the context of an overall planning and control architecture. Scheduling may be viewed as an activity within a process. Statistical Process Control (SPC) provides an attractive option for monitoring performance. In this paper we investigate the potential of applying SPC control charts in this context. The feasibility of monitoring flow time in a single processor model using control charts is studied using simulation. The application of control charts to monitor time-related measures in operational systems raises fundamental statistical problems. The need for approaches that are robust with respect to data correlation and lack of normality is shown to be an essential requirement. Residual-based approaches and the Exponentially Weighted Moving Average (EWMA) chart are shown to be reasonably effective in avoiding false alarms and in detecting process shifts. The applicability of the single processor model to more complex operational systems is discussed. The implications of the work for the design of performance monitoring and continuous improvement systems for time-related measures in manufacturing and service operations are considered. A number of areas are highlighted for further theoretical and practical studies.     

A single-stage supply chain system controlled by kanban under just-in-time philosophy

The production system using kanban was pioneered by Toyota Motor Company in Japan and subsequently it was adopted by numerous other Japanese and US companies for applying the just-in-time manufacturing principles. This research studies a single-stage supply chain system that is controlled by kanban mechanism. The supply chain system is modelled as a mixed-integer nonlinear programming (MINLP) problem. It is solved optimally by branch-and-bound method to determine the number of kanbans, batch size, number of batches, and the total quantity over one period. Meanwhile, the kanban operation between two adjacent plants is worked out considering the factors of loading and unloading time, and transport time. Coupled with plant-wide efforts for cost control and management commitment to enhance other measures of performance, a logistics system for controlling the production as well as the supply chain system is developed, which results in minimizing the total cost of the supply chain system. The results show that the improvements in reduction of inventory, wasted labour, and customer service in a supply chain are accomplished through the kanban mechanism.     

Environmental integrated production and recycling management

Environmental integrated production and recycling planning is of great importance for the competitive position of production enterprises. Due to increasing disposal costs for industrial byproducts and waste as well as stronger emission standards, companies will be required to set up and control advanced, environmental friendly production technologies, so that emissions and byproducts will be reduced drastically. Nonavoidable byproducts and used products at the end of their lifetime have to be recycled by the producers. The complexity of the resulting decision problems requires adequate operations research methods. The following paper deals with the development of sophisticated operations research models for two selected planning problems: recycling of industrial byproducts and dismantling and recycling of products at the end of their lifetime. The models have been applied successfully to large industrial problems in practice in the fields of recycling of demolition waste in a German-French region and byproduct management in the steel industry. The presentations of these two applications follow a case study point of view.     

基于ECM模型的跨国公司主导型产业集聚发展研究

本文对跨国公司在苏州工业园区的投资与技术现状,以及制造业产业集聚现状进行描述,进一步阐述了跨国公司对园区产业集聚影响的机理及程度。研究发现:苏州工业园区中跨国公司投资、跨国公司技术对园区制造业产业集聚程度起到一定的强化作用,并且跨国公司投资的作用在两年后显现,短期影响比长期影响更强。跨国公司对产业集聚的影响正在由投资拉动逐渐向技术推动转变。