IJOPM

22,9
956
International Journal of Operations &
Production Management,
Vol. 22 No. 9, 2002, pp. 956-971.
# MCB UP Limited, 0144-3577
DOI 10.1108/01443570210446306
Extending product profiling
through simulation
Scott R. Swenseth
University of Nebraska, Lincoln, Nebraska, USA
John R. Olson
DePaul University, Chicago, Illinois, USA and
Peter B. Southard
The Pennsylvania State University, Erie, Pennsylvania, USA
Keywords Operations strategy, Product placement, Process planning, Manufacturing strategy,
Organizational behaviour
Abstract Manufacturing strategy literature continues to be split between process and content.
Content has continually evolved and more precise applications have been developed. Process has
lagged behind because of the difficulty in conducting research in this area. Little has been
developed since the introduction of the product profiling mechanism. This study presents a
methodology that extends the product profiling technique, resulting in more appropriate content
recommendations. Two case examples, one manufacturing operation and one service operation,
are provided to demonstrate the improved performance of the product profile when combined
with simulation. In both cases, problem symptoms caused the organization to seek help in
scheduling operations. Cursory study clearly indicated that neither organization had a scheduling
problem, but rather, an improper relationship between the marketing and operations functions of
the organizations. In both cases, it was possible to demonstrate, with product profiling, the lack of
coordination between the marketing and operating functions of the organizations. Product
profiling alone, however, was not sufficient to convince either organization to implement proper
solutions. When changes were supplemented with a graphical simulation analysis, both
organizations agreed with the recommendations and began implementing change.
1.0 Introduction
As the twenty-first century begins, competition in the global marketplace
continues to grow stronger. To stay competitive, companies are no longer able
to make poor decisions about resource deployment. One of the resource
decisions that many organizations have struggled with over the years is
effective process choice. As companies grow and evolve, management often
fails to realize that its company may need to change its internal processes to
better fit the demands of the marketplace.
Hayes and Wheelwright (1984) first introduced the idea that a top-down
alignment of business strategies and competitive capabilities drive firm
performance. This notion of positioning on the process choice continuum is
fundamental to the content of operations strategy. Product profiling (Hill, 2000)
provides a strategic mechanism or ``process'' to determine the best fit for an
organization along the process choice continuum. The development of a
product profile has proven extremely useful in highlighting discrepancies
within and between marketing, operations and their supporting
infrastructures. Having developed product profiles for several organizations,
The current issue and full text archive of this journal is available at
http://www.emeraldinsight.com/0144-3577.htm
Extending
product profiling
957
two key weaknesses were identified as common and are addressed throughout
this paper. These weaknesses included:
(1) failure of the organization to recognize and comprehend the mismatch
between the areas indicated in the profile; and
(2) a failure to determine or accept the best course of action once a mismatch
has been detected.
The purpose of the study is to demonstrate how simulation can be assimilated
into operations strategy analyses to eliminate or reduce the identified
weaknesses of product profiling. Two case examples are included, one in a
manufacturing organization and one in a service organization, demonstrating
both the effectiveness of the combined process and its applicability to both
manufacturing and services. The results of the study indicated that the newly
developed process worked equally well in either the manufacturing or service
operating environment.
Fundamental to this discussion was the premise that poor strategic fit (or
improper alignment of process choice) between marketing, operations and the
supporting infrastructure can lead to poor performance. Poor alignment on the
original product profiling mechanism would indicate a need to re-design one or
more processes, to eliminate the ``lack of fit'' with the process choice continuum.
The general belief is that eliminating this lack of fit can lead to improved
performance (Hayes and Wheelwright, 1984; Hill, 2000).
We identified two common problems when organizations attempted to
analyze the original product profiling results. First, many organizations did
not accept or agree with the assessment provided by the product profile.
Second, even when they did accept the results of the profile, they would not
accept or could not make the translation of the profiling results into a
recommended change in process choice. The consequences are that proper
strategic fit cannot be attained if no attempt is made to make changes to the
existing system. The long-term implications are that improper strategic fit
leads to poor company performance and productivity will suffer (Bozarth and
McDermott, 1998). In general, firms with poor strategic fit will be forced to
aggressively micro manage their processes in order to achieve production
quotas and goals.
The identified weak link in this process occurs between strategic analysis
and the process choice. When using the product profiling mechanism, firms
often struggle to identify alternatives that are available to address the
identified mismatch. Simulation provides multiple benefits to this process. In
particular, the simulation model acts as a tool to quantify and encourage the
acceptance of the product profile as representing the correct strategic fit for
each company. In addition, the simulation model then gives the organization
the ability to test alternatives that will help alleviate the identified
mismatches.
IJOPM
22,9
958
2.0 Review of literature
The purpose behind this literature review is to establish the paucity of
literature exploring the link between operations strategy content and process.
The use of simulation in operations strategy will also be examined.
2.1 Operations strategy process
While there has been considerable research on the operations strategy content,
very fewstudies address the issues related to operation strategy process. Leong
et al. (1990) indicate that operations strategy process has been researched far
less than the content of manufacturing strategy and therefore far less
consensus is reached as to the correct strategy process. However, in the past
decade, very little has evolved regarding the process surrounding operations
strategy.
Within the process of manufacturing strategy there are two primary issues:
conception and development, and the implementation of manufacturing
strategy. Most of the research in manufacturing strategy process literature is
related to the conception and development of manufacturing strategy. Skinner
(1969, 1974, 1978, 1985) emphasized the alignment of operations and corporate
strategy. Other authors have provided frameworks and guidelines for the
formulation of manufacturing strategy (Hayes and Wheelwright, 1984; Hayes
et al., 1988; Fine and Hax, 1985).
Very little research has been conducted regarding the implementation of
manufacturing strategy. The most complete model has been provided by Hill
(1983, 2000), in which a five-step model is provided guiding the development
and implementation of manufacturing strategy. The distinctive features of this
framework were its close ties to marketing and the identification of order-
qualifying and order-winning criteria for specific representative products.
Hill's approach to implementation was through the use of a product profile.
``Product profiling is a way to ascertain the level of fit between the choice of
processes that have been or are proposed to be made and the order-winning
criteria of the product(s) under review'' (Hill, 2000, pp. 146-7).
2.2 Linking operations strategy content and process
While Hill's (2000) model is fairly comprehensive, very little research has been
conducted on the link between content and process of manufacturing strategy
since its introduction. There appear to be continuing problems regarding the
implementation of product profiling, and appropriate alternatives, once a
mismatch has been identified. Although a mismatch was identified in one
instance (Hill et al., 1998), the company decided that instead of correcting the
mismatch, it would actually take steps in the opposite direction. More recently,
Schonberger (1999) has challenged this contradictory implementation but Hill
(2000) justified it on the basis of norms within the industry. This study
proposes to offer a method of reinforcing the presentation of the proper
selection.
Extending
product profiling
959
2.3 Strategy and simulation
In a previous study, the use of simulation was incorporated in business process
reengineering (BPR) to help with the analysis and implementation of
procedures. The simulation tool allows users to test a variety of ``what-if''
alternatives. These alternatives can lead to distinctive competitive advantages
for the organization (Greasley, 1998). Other authors suggest that simulation,
graphical simulation in particular, is appropriate to use in the analysis of all
business processes because it can incorporate a large degree of system
variability (Fowler, 1998; Hansen, 1997). This study builds on Hill's (2000)
profiling mechanism by introducing the use of simulation as a tool to identify
strategic mismatches and to study the impact of various choices of strategic
action.
3.0 Methodology
Two companies were examined in this study: the first firm was a metal
fabrication facility, and the second organization was a small marketing
research organization. The same process was followed for both of the
organizations. First, an initial product profile analysis was completed and a
narrative version presented to management outlining the current situation of
the firm. The analysis demonstrated mismatches that had developed between
organizational infrastructure, the production function, and marketing. Second,
a graphically based simulation model was developed and demonstrated to
management for verification purposes. After management understood the
identified mismatches and the degree to which the organization was
mismatched, as indicated by the simulation display and output reports,
potential solutions to fix the problem were identified. Finally, proposed
solutions were then simulated and the results of the experiments were
presented to management. The simulation enabled the organization to test and
visualize which of the proposed systems best alleviated the mismatches
between the marketing, production and infrastructure components of the
organization. Table I presents a detailed description of the strategic analysis
process used in this study. The following section will demonstrate the process
as it was applied in both manufacturing and service environments.
4.0 Case applications
The two organizations used in the study were a traditional metal fabricating
facility, which primarily manufactured parts for the agricultural equipment
industry, and a survey research company, which operated primarily in the
health care industry.
4.1 Manufacturing case
Company overview. The manufacturing company studied was a family-owned
manufacturing organization that operated three machine shop facilities. The
organization produced over 100 different metal parts, primarily on a make to
order basis. Since the company was located in a rural area, a large portion of
IJOPM
22,9
960
their business came from the agricultural industry. They produced parts both
for local area customers and larger equipment manufacturers. The three
facilities were organized into process focused job shops with departments or
areas designated by the type of metalworking process performed. The three
facilities differed only in the size and modernization of equipment. All three
facilities could produce any of the products as needed.
As with most machine shop organizations a wide variety of processes were
used in production. Complexity ranged from a single-stage operation to
multiple stage processing where parts arrive and pass through several areas,
including retracing steps through the some stages multiple times, before
shipping. As the company grew, several operational problems within the
organization began to occur. Some of the difficulties that the company began to
experience included late deliveries, increasing work-in-process (WIP) levels,
and an increasing rate of employee turnover. It was the increase in late
deliveries and WIP levels that led to the presumption of scheduling problems.
This did not account for the increase in employee turnover. Since this was a
Table I.
Expanded product
profiling process
Step 1: Develop initial
product profile and analysis
In this step the analyst should create a product profile of
the current operations of the organization. The principal
component of marketing, production and supporting
infrastructure should be examined. As a basis for
comparison it is often helpful to examine the previous
marketing, production and infrastructure components of the
firm
Step 2: Verify product profile
through graphical
simulation
Using a graphical based simulation model the analyst
should construct a detailed picture of how the product
variety and lot sizing policies impact the production
processes. This does two things: first it conveys not only
the impact, but also the degree that the product variety and
lot sizing polices have on the production processes. This is
often the selling point that persuades management to
believe the identified mismatches in their system. Note it is
extremely crucial to develop metrics for a basis of
comparison at this time in the process. Metrics allow the
organization to baseline the current situation against
proposed changes
Step 3: Identify and analyze
feasible alternatives
At this time the analyst and management team should
decide on feasible alternatives to test and analyze. Once the
management team has been convinced of the current
mismatches in their existing system these alternatives
should be fairly easy to generate. The simulation model
should be modified to incorporate the proposed changes and
tested to analyze the various alternatives. The tested
alternatives can be used to accomplish two goals: realign
the components of marketing, production and infrastructure,
and prepare the organizations that are expected in the
future
Step 4: Select best course of
action
Choose the best course of action and begin development of
the appropriate implementation plan
Extending
product profiling
961
recent development and because the problems extended beyond the related
symptoms, it served as a signal that there could be larger problems.
Profile development and analysis. An initial product profile was developed to
identify any internal or external environment changes that might have
occurred. A ten-year block of time was determined appropriate to establish the
differences between the past and the present.
As expected in traditional machining environments, the original products
and markets of the past fit directly in line with job shop operations. The
majority of the business was small orders for fairly unique products. Products
were customized to fit the needs of the local area customer base. Over time,
however, the customer base had evolved considerably. The existing customers
were still in place, but their needs had changed. While each traditional
customer still required specialized products, the order size for many customers
had grown considerably larger than what would normally be appropriate for a
jobbing operation. Further, these orders were generally repeated on a more
regular basis indicating a more standardized product line. These products
primarily competed on the basis of price with quality and delivery reliability
becoming order losing sensitive qualifiers. Design capability had diminished in
importance with the more standardized products.
In addition, new customers had been added to the mix. They were primarily
original equipment manufacturers (OEMs) for the agricultural industry. The
organization had built a solid reputation for building quality parts, increasing
their stronghold among agricultural equipment manufacturers. These
companies wished to purchase high volume, low cost products from the
company. Not willing to turn down the opportunity to greatly increase their
profits, the company began to produce for the OEM companies as well. As with
many OEM contracts, order winners were cost and delivery reliability with
penalties for late delivery.
While the nature of the products and markets had changed through this ten-
year period, the manufacturing processes had remained unaltered. Investments
in new equipment had been made in terms of improving existing processes, not
in changing the way in which the processes were incorporated into the
manufacturing structure. As a result, the nature of the process technology and
process flexibility remained on the jobbing side of the product profile. The
complete product profile is shown in Figure 1.
4.2 Service case
Company overview. The service company studied was involved in market
research and information processing and analysis. The markets served by the
company were divided into three main focus areas within the health care
industry:
(1) corporate facilities such as public and private hospitals;
(2) corporate health care insurers like HMOs; and
(3) health care professionals such as individual doctors and practices.
IJOPM
22,9
962
As the company grew, it initiated a new market research product
necessitating new investment in additional equipment, resources, and
processes. The new product grew at a much faster rate than the previously
existing products and quickly became the largest product line in the
company. The rapid development of this portion of the organization created
difficulties in the operations of the organization which management identified
as scheduling problems. The symptoms included late deliveries or missed due
dates, increased WIP, and quality problems. These quality problems required
major rework creating additional interruptions in the information process
flow.
Profile development and analysis. As with the manufacturing case, the
project team worked with the company's management team to construct a
product profile. The purpose of this profile was to compare and evaluate the
Figure 1.
Machine shop company
product profile
Extending
product profiling
963
current position of the organization to the operating environment that had
existed before these symptoms had become apparent.
The primary products of the company included the analysis and
presentation of both mail and telephone surveys. These products could be
further categorized as falling into one of three areas:
(1) semi-standardized projects offered to all customers,
(2) an industry-wide database (specific queries to this database provided a
benchmarking base for organizations seeking improvements), and
(3) customized special-purpose projects.
These accounted for roughly 75 percent, 10 percent, and 15 percent,
respectively, of total revenue. Initially, the firm provided only customized,
special-purpose projects, classified in area 3 above. As its markets matured and
it introduced new high-growth products, these products became more
standardized. This indicated a shift in the primary production process fromlow
volume, specialized products towards higher volume, standardized products.
While the markets had clearly shifted toward a more standardized product,
the production process had not evolved to incorporate a corresponding
infrastructure for batch or line processing. Projects were passed from
functional area to functional area where specialists completed their task before
passing it on to the next functional area. Like the manufacturing case, a project
often passed though a single functional area several times before its ultimate
completion. Fitzsimmons and Fitzsimmons (1998) and Murdick et al. (1990)
have associated similar characteristics with a process layout, comparing it to a
hospital or law office. Further, the order winner for the products had moved
from flexibility and quality to that of price. Flexibility and quality had since
transitioned fromorder winners to qualifiers.
A product profile was constructed that compared the present situation to the
situation that existed before the current problems developed. This product
profile is presented in Figure 2.
5.0 Analysis and results
The analysis of both companies, based on Hill's (2000) manufacturing strategy
framework, identified apparent mismatches between the existing system and
the current needs of the market. The profile served as a tool to indicate that the
process choice, which had been in place for decades, appeared to have been
appropriate for the markets at the time of its development. As the market had
developed, enlarged, and matured, the processes had remained essentially the
same. The companies now had another process choice decision to make and,
along with it, choices on the appropriate infrastructure. The implications were
that an operations strategy framework had now identified price as the primary
order winner. The framework also indicated that the processes used to produce
their products were not appropriate for this criterion. The firms now needed to
make a choice among several alternatives.
IJOPM
22,9
964
5.1 Identification of alternatives
Based on the analysis, four alternatives were identified. The first alternative
was that of accepting the incongruities as they were and not attempting to
change them. The second alternative was to alter the marketing strategy to
more closely match the existing processes. The third alternative was to change
the processes, and corresponding infrastructure, to reflect the changes that had
occurred in the organization and in its markets. The final alternative would
involve some mixture of alternatives two and three. It would necessitate
changes addressed by both the second and third alternatives.
5.2 Presentation of product profile
In both cases, the product profile and suggested alternatives were presented to
the management teams in a narrative report. There was general failure on their
part to accept the findings in this form. The primary disconnect was the lack of
agreement between the marketing and manufacturing functions. While
marketing acknowledged the changing environment, manufacturing had
always been a job shop and, based on past success, did not comprehend any
need for change. Even though changes had occurred in their markets, neither
Figure 2.
Service company
product profile
Extending
product profiling
965
manufacturing nor marketing could accept that these changes had made as
significant an impact as the product profile indicated. They felt that they still
did the same thing they had always done. They began, and were originally
successful, as a traditional job shop and, just because some evolution had
occurred in the markets/marketing of the organization, there was no need to
make any changes in the operations. This is similar to the Hill et al. (1998)
situation where the company made the decision to go in the opposite direction
to the product profile recommendation.
5.3 Use of simulation
The simulation model and tool was then introduced into this analysis for
multiple purposes. Initially the tool was used to verify to the management team
of the mismatches identified in the product profile. In addition, the simulation
model was used to test feasible alternatives that would help to realign the
production processes, infrastructure and marketing. Convincing the managers
was made easier with the graphical nature of the simulation program as they
could visually observe the results of the analysis.
The initial simulation was presented to the management team whose
response was dramatically different from their initial response to the profile
alone. After the presentation, various members of the management teamagreed
to the identified mismatches in the product profile. In addition, the statistical
analysis provided by the simulation conveyed the extent of the mismatches.
5.4 Manufacturing case
Manufacturing alternatives. Simulation was used to test several alternatives
that would help realign the various functions of the manufacturing
organization. The alternatives tested were the original control model, plant
within a plant approach (PWP), and a cellular manufacturing approach. An
even more obvious solution, based on the focused manufacturing approach,
would have been to convert one entire facility into a product focused facility
while maintaining the existing process structure in the other facilities. For
political reasons within the organization, this alternative was not presented.
Froma corporate perspective the firmhad made a commitment to pursue larger
clients. For this reason, the manufacturing process alternatives were
considered for this model rather than marketing alternatives. The alternatives
tested were those agreed on by management as reasonable approaches to help
re-align the product profile.
Development of the simulation model. The simulation contrasted the
differences between the PWP approach, manufacturing cell approach and the
control model (original model). Model development was accomplished using
ProModel simulation software. The model uses an entity-attribute based design
to identify characteristics such as part type and processing times for various
activities. These activities included batch setup, part loading, processing,
unloading, inspection, and part movement between stations. As an entity
passes through the manufacturing cell, the time associated with each action is
IJOPM
22,9
966
recorded as an attribute. After the part processing sequence is complete, all
information is accumulated in a set of ProModel variables by part type and
machine. All part arrival and process times were based on historical
distributions. All distributions were created using an empirical distribution-
fitting program.
Each replication of the model simulated 52 weeks of operation for the
hypothetical manufacturing cell. A total of 100 replications were run for each
model. The primary outputs were total batches of output per week and batches
of select SKUs per week (output of JITorders for high volume customers).
Simulation results. Three models were built, including the base model, the
PWP approach, and the cellular manufacturing approach. The results for the
PWP and cellular approach were nearly identical, but were very different from
the base model. Because the cellular approach could be implemented with the
least disruption to current processes, it was the recommended alternative. The
results demonstrating the comparison of the base and the cellular approach are
included in Table II.
These results demonstrate that the total output per week increases by
approximately 85 batches when switching to the cellular approach, and equally
important to the client, the gain was accomplished in the important JIT product
lines without sacrificing output from the other lines. The improvement was
tested and found to be significant beyond the 0.01 level of significance.
An interesting anecdotal outcome of these models was the discovery that the
forklifts in the original facility were at full capacity. Because they had not
considered forklifts moving to pick-up locations as being in use, they had not
realized the effect of these resources serving as a bottleneck in the system. The
average time in use for forklifts decreased in the cellular approach, lessening
the bottleneck problem created by this resource. The development of the
alternative models not only alleviated problems due to forklift travel, but also
demonstrated a substantial decrease in congestion throughout the facility.
Management considered the cellular approach feasible at this juncture and the
Table II.
A comparison of
manufacturing
alternatives
Traditional job
shop model
Cellular
manufacturing
model Difference
Total output Average 908.89 995.04 86.05
SD 14.34 20.45 27.07
99% confidence
interval 904.93 912.84 989.40 1000.68 78.58 93.51
JIT customer output Average 445.68 530.32 84.64
SD 8.97 14.55 18.61
99% confidence
interval 443.20 448.15 526.30 534.33 79.50 89.77
Note: All values are significant at the p < 0.01 level
Extending
product profiling
967
previous notion that the facility should be organized in the traditional structure
became far less important.
The change in the attitude of management reinforced previous findings
indicating the power of animation and simulation as a presentation tool. The
benefits were obviously evident to the management teams as it encouraged
them to continue the performance of self-evaluation. That, in and of itself, is
evidence that the graphical presentation properties of computer-aided analysis
have a place in business strategy.
5.5 Service case
Service alternatives. As indicated, the service firm had four basic alternatives.
The first, doing nothing and living with the mismatch, was not a viable
solution. Due to the increasing problems, this would clearly have negative
ramifications on the firm. The likely result would either be to expend
substantial funds increasing capacity of poorly operating processes or to lose
their market share. The second alternative, changing marketing, would result
in a reversal of the overall direction of the firm and eliminate their largest and
fastest growing market segment. The third alternative, altering the process
choice decision, was viable because of the many inefficiencies created when the
service had become more standardized. The fourth alternative, altering both
the process choice and the marketing strategy, was possible if the organization
were willing to forgo their initial customer base and operate strictly in the high
volume standard service market. This would require a complete change in the
process choice, even beyond that necessary for the third alternative. While the
management team was not convinced at this point that a change was
necessary, they were willing to allow further study into the third alternative,
altering the process choice.
Development of the simulation model. The product profile and subsequent
simulation analyses using ProcessModel simulation software indicated several
possible improvement scenarios. These ranged from streamlining several
repetitive steps with many extra non-value added activities to a restructuring
of the organization into a product focused PWP structure. Several processes
were identified with the process-mapping step in the simulation development
that indicated inefficiencies in the process. The four scenarios selected for
further consideration included a streamlining of the quality assurance by
incorporating many quality checks into the software; the incorporation of
computer-aided telephone interviewing, or CATI; standardizing statistical
software tools and programming conventions; and, forming teams based on the
PWP approach with standardized operations for each team/market
combination.
The focus of these analyses was on the reduction of time each project spent
in the system. While cycle time varies according to project type, the average
time taken to complete a project was about 80 days. Of these 80 days, between
45 and 50 were spent, on average, waiting either for customers to respond to
preliminary reports, or for survey responses to be returned from the individual
IJOPM
22,9
968
respondents. As a result, only about 30 days of the 80 days taken to complete a
project are within the control of the organization.
Simulation results. The first alternative was the elimination of various
quality assurance activities, accomplished by incorporating them into the
product development software. In addition, by standardizing the various forms
and setting strict parameters into data entry fields, quality control would occur
as the data was entered instead of post hoc. The second alternative was the
incorporation of a computer-aided telephone interviewing system (CATI). This
would eliminate the need to code and reenter data. Based on simulation results,
the first and second alternatives, incorporated individually, offered no
appreciable reduction in total cycle time (the average time that projects were in
the system). These alternatives reduced time within these work processes
considerably, but because of bottlenecks in other functional areas, removing
this time reduced cost but not total cycle time. These first two alternatives also
reduced the need for rework considerably and, even though the reduction of
cycle time was not significant, the improved quality and simplification of the
process were important results.
The third improvement scenario was to standardize the programming
languages used. The company was using at least three different coding
software packages including FoxPro, SPSS, and P-Stat. Taking the raw data
and transforming it into information for the client reports consumed a major
amount of processing time. Simulation of this third scenario did produce more
significant results. WIP was reduced considerably and the reduction of the
approximately 6 percent of total cycle time required to process each project
allowed for much improved delivery reliability. This reduction in cycle time
was statistically significant as depicted in Table III.
The fourth improvement scenario, based on the plant-within-a-plant
concept, was the use of teams. Formed on the basis of the type of project needed
(e.g. mail, renewal, medium sized), product focused teams would eliminate
much of the ``throwing it over the wall'' activities and the problems created by
Table III.
A comparison of
service alternatives
Original service
shop model
Standardizing
tools and
programs model Difference
Average cycle time per
project (days)
Average 79.5 77.7 1.8*
(%) 6***
Original service
shop model
Work teams
model Difference
Average cycle time per
project (days)
Average 79.5 74.9 4.6**
(%) 15***
Notes: *Significant at the p < 0.05 level (p-value = 0.03984); **Significant at the p < 0.01
level (p-value = 0.000659); ***Percentages are approximate and based on time within the
control of the organization. Of the times indicated, approximately 45-50 days are consumed
by times associated with waiting for survey responses or waiting for customer approval
Extending
product profiling
969
having ``functional silos.'' By forming the teams on the basis of project type,
each team would handle similar projects requiring similar tasks and resources.
Doing so would decrease the amount of ``set-up'' time that ``changing gears''
from project to project normally requires. The simulation results for the fourth
scenario also showed a reduction of cycle time (approximately 15 percent). As
would be expected, WIP was also reduced by the fourth alternative. As
depicted in Table III, these results are statistically significant.
The cycle time reductions from the third and fourth scenarios could be
measured in days instead of hours and made a significant impression on the
management team. The next logical step would have been to combine all four
alternatives into a single simulation model. Doing so would likely have
demonstrated that the time savings from the first two scenarios would have
had an additional effect on the cycle time since some downstream bottlenecks
would have been removed from other functional areas by the third and fourth
scenarios. However, because of the associated cost reductions, quality
improvements and decrease in duplication, the organization proceeded with the
implementation process for all four scenarios without seeing the synergistic
effects of a combined model. They simultaneously began an internal
investigation of other potential improvements to incorporate during this
transition.
6.0 Discussion
Developed separately, it is interesting to note the similarities between these two
very different manufacturing and service cases. These similarities highlight the
fact that in many, if not most, situations manufacturing strategy and
implementation procedures may be applied with equal effectiveness to both
manufacturing and service organizations. In realigning the processes to their
respective markets, both organizations described in this study incorporated a
more focused process choice approach, including the standardization of
products and dedicated processes.
Product profiling provided an adequate analysis tool for identifying the
mismatches that existed in both organizations. However, despite the fact that
the product profiles had been developed according to a well-established and
documented framework, when these findings were presented for
implementation to the companies, they were, in both cases, rejected. It was
evident that the product profiling results, by themselves, were insufficient to
create a change force within the companies. A moderating tool was required.
This study found that simulation could be that tool. It served as graphic and
visual proof of the proposition originally developed: strategic analysis,
completed through product profiling, would lead to a better strategic fit of
processes to products. This realignment of the strategic fit would lead to
improved company performance based on simulated studies. In addition,
graphical simulation allowed for the investigation of specific implementation
alternatives that can only be suggested by the product profile.
IJOPM
22,9
970
While one organization was a traditional manufacturing organization and
the other was a service provider, the internal attitudes and the development of
the original production processes, namely a job shop, were the same and the
results of the process were identical. In both cases, the management team was
committed to their existing processes and would not accept the fact that it was
their process choice decision, and not micro-operational problems, that had
resulted in the difficulties that the organization had encountered. In addition,
the proposed alternatives for both cases incorporated similar philosophies on
standardization and focus.
Empirical evidence from the simulations was used to confirm the final link,
along with anecdotal evidence from the service company. When the options
offered had been implemented, performance improved. Reports from the main
contact people at the organizations have been very encouraging. The
manufacturing organization immediately took steps to make changes on the
shop floor and developed a plan for separating out those products that were
likely candidates for alternative manufacturing processes. The potential for
success led to this organization being acquired by a much larger machining
organization. On the other hand, the service organization has continued to grow
and expand, purchasing one of its main competitors and is currently in the
process of purchasing and moving to a larger facility. The team approach has
been adopted, providing for a more product-focused operation for large scale
and consistent products, and software has been proposed for streamlining
many other aspects of their operation.
This study has extended product profiling by providing a mechanism to
effectively link managerial decision making to inconsistencies identified in
operations strategy content and process. The mechanism incorporated into this
process is the use of graphically based simulation. Visual simulation reinforces
the identified mismatches in both a physically identifiable and statistical form.
In addition, the use of simulation in this process may prevent an organization
frommaking an inappropriate change based on simple product profile analysis.
In either case, the modified product profiling analysis presented, if
implemented correctly, will improve an organization's ability to make
decisions. These cases illustrate the power of simulation and its effect on
operations strategy analyses and quite possibly could be used to evaluate the
effectiveness of product profiling.
References
Bozarth, C. and McDermott, C. (1998), ``Configurations in manufacturing strategy: a review and
directions for further research'', Journal of Operations Management, Vol. 16, pp. 427-39.
Fine, C.H. and Hax, A.C. (1985), ``Manufacturing strategy: a methodology and an illustration'',
Interfaces, Vol. 15, pp. 28-46.
Fitzsimmons, J.A. and Fitzsimmons, M.J. (1998), Service Management: Operations, Strategy, and
Information Technology, Irwin McGraw-Hill, Boston, MA.
Fowler, A. (1998), ``Operations management and systematic modeling as frameworks for BPR'',
International Journal of Operations & Production Management, Vol. 18 No. 9/10,
pp. 1028-57.
Extending
product profiling
971
Greasley, A. (1998), ``Using simulation modeling for BPR and resource allocation in a police
custody process'', International Journal of Operations & Production Management, Vol. 18
No. 9/10, pp. 978-89.
Hansen, G.A. (1997), Automating Business Process Reengineering; Using the Power of Virtual
Simulation to Improve Performance and Profit, Prentice Hall, Englewood Cliffs, NJ.
Hayes, R.H. and Wheelwright, S.C. (1984), Restoring Our Competitive Edge: Competing through
Manufacturing, John Wiley, NewYork, NY.
Hayes, R.H., Wheelwright, S.C. and Clark, K. (1988), Dynamic Manufacturing, Free Press, New
York, NY.
Hill, T.J. (1983), ``Manufacturing's strategic role'', Journal of the Operational Research Society,
Vol. 34 No. 9, pp. 853-60.
Hill, T.J. (2000), Manufacturing Strategy: Text and Cases, Irwin McGraw-Hill, Boston, MA.
Hill, T.J., Menda, R. and Dilts, D.M. (1998), ``Using product profiling to illustrate manufacturing-
marketing misalignment'', Interfaces, Vol. 28 No. 4, pp. 47-63.
Leong, G.K., Snyder, D.L. and Ward, P.T. (1990), ``Research in the process and content of
manufacturing strategy'', Omega: International Journal of Management Science, Vol. 18
No. 2, pp. 109-22.
Murdick, R.G., Render, B. and Russell, R.S. (1990), Service Operations Management, Allyn and
Bacon, Boston, MA.
Schonberger, R. (1999), ``Comment: using product profiling to illustrate manufacturing-marketing
misalignment'', Interfaces, Vol. 29 No. 6, pp. 127-32.
Skinner, W. (1969), ``Manufacturing: missing link in corporate strategy'', Harvard Business
Review, May-June, pp. 136-45.
Skinner, W. (1974), ``The focused factory'', Harvard Business Review, May-June, pp. 112-21.
Skinner, W. (1978), Manufacturing in the Business Strategy, Wiley, NewYork, NY.
Skinner, W. (1985), Manufacturing: The Formidable Competitive Weapon, Wiley, NewYork, NY.