Contract manufacturing networks structure and supply chain management

The usual objectives that companies have for subcontracting are studied in this thesis. The case company’s objectives for contract manufacturing now and in the future are identified. The main objective of the thesis is to create a focused model for the structure and supply chain management in the contract manufacturing network. This model is made for case company’s certain profit center. The different possibilities and their advantages and disadvantages for the structure and supply chain management are examined trough a theoretical review of literature. The possibilities found are then examined from the case company’s point of view. The case company point of view is established based on the opinions of the case company’s representatives. The outcome of the thesis is that the star shaped structure with supply chain management centralized to case company would be the best choice for the case company to manage the contract manufacture network.

Engendering Group Support Based Foresight for Capital Intensive Manufacturing Industries - Case Paper and Steel Industry Scenarios by 2018

In recent times of global turmoil, the need for uncertainty management has become ever momentous. The need for enhanced foresight especially concerns capital-intensive industries, which need to commit their resources and assets with long-term planning horizons. Scenario planning has been acknowledged to have many virtues - and limitations - concerning the mapping of the future and illustrating the alternative development paths. The present study has been initiated to address both the need of improved foresight in two capital-intensive industries, i.e. the paper and steel industries and the imperfections in the current scenario practice. The research problem has been approached by engendering a problem-solving vehicle, which combines, e.g. elements of generic scenario process, face-to-face group support methods, deductive scenario reasoning and causal mapping into a fully integrated scenario process. The process, called the SAGES scenario framework, has been empirically tested by creating alternative futures for two capital-intensive industries, i.e. the paper and steel industries. Three scenarios for each industry have been engendered together with the identification of the key megatrends, the most important foreign investment determinants, key future drivers and leading indicators for the materialisation of the scenarios. The empirical results revealed a two-fold outlook for the paper industry, while the steel industry future was seen as much more positive. The research found support for utilising group support systems in scenario and strategic planning context with some limitations. Key perceived benefits include high time-efficiency, productivity and lower resource-intensiveness. Group support also seems to enhance participant satisfaction, encourage innovative thinking and provide the users with personalised qualitative scenarios.

Defining the location factors of new manufacturing site in chemical industry

The objective of this thesis is to examine the factors that have an impact on the location decision of new manufacturing site and to create the relative order of importance of these factors by analytic hierarchy process (AHP). The decision making process especially related to the location selection and the measurement of the location factors are also examined. In theoretical part the character of decision making process and the relevant methods are introduced. Based on the previous studies of other researchers, the location factors are examined and the main research method, analytic hierarchy process, is also introduced. The empirical part of the study mainly follows the phases of decision making process and is emphasized on the main stages of analytic hierarchy process; building the hierarchy, defining the priorities and analyzing the results. The hierarchy is constructed from seven main criteria which all have several sub criteria. The evaluation of the hierarchy is implemented at the group decision making –laboratory and there can be seen significant differences between the importance of criteria. The final stage in the study is to create the appropriate measurement scales to the chosen criteria.

Reducing Manufacturing Costs of the Screen Dryer’s Hot Section by Design

In this thesis, the purpose was to find the cost distribution of the screen dryer and the largest cost factors. The hot section of the screen dryer was revealed as the biggest cost factor, so composing new cost efficient solutions were directed to it. DFMA (Design for Manufacture and Assembly) was chosen to help the design process. DFMA is a product design strategy developed for taking manufacturing and assembly costs into account at the early stages of the design process. In the theory part of the thesis, other methods of economical design and tools needed for estimating manufacturing costs are introduced. In the empirical part, the hot section of the screen dryer was divided into sub-assemblies and their manufacturing costs were estimated. The design propositions were directed to the self-manufactured assemblies and parts. The new manufacturing costs were calculated for the developed propositions. Lastly, the most cost efficient solutions were summarized. The savings on the self-manufactured assemblies were about 40 %, which was about 13 % of the combined total costs of the hot section.

Production planning development in global manufacturing company

Larox Corporation is a provider of full service filtration in solid and liquid separation. Larox develops, designs, manufactures and supplies industrial filters. By Larox’s continuous development principle, a project for more efficient production was started. At the same time production planning was taken under review. Aim for this Master’s thesis was to find software designed for production planning purposes replacement for old Microsoft Excel based method. In this Master’s thesis current way of production planning was thoroughly analyzed and improvement targets were specified and also requirements for new software were assigned. Primary requirements for new software were possibility to production scheduling, planning, follow-up and also for long-time capacity planning and tracking. Also one demand was that new software should have data link to Larox’s current ERP-system. Result of this Master’s thesis was to start using Larox’s ERP-system also for production planning purposes. New mode of operation fulfils all requirements which were placed to new system. By using new method of production planning, production planners can get more easier and reliable data than from current system.

On Doing Successful ICT Business with Russian Manufacturing Enterprises

This Master’s thesis addresses different approaches using which a foreign IT company could enter Russian manufacturing industry with its enterprise information systems and IT services. In order to define the most suitable market entry approach, several aspects related to Russian manufacturing enterprises are studied. These aspects include challenges of doing ICT business with the previously mentioned enterprises, their perception of ICT role and their ICT preferences, as well as their buying behavior related to acquisition of information systems (IS). The study results show that there are several challenges that can be faced by a foreign IT vendor when starting conducting ICT business with Russian manufacturing enterprises. The results also show that Russian manufacturing industry is still rather immature in sense of business process automation, and its IT buying behavior is rather specific and complicated. The results suggest that an efficient way to approach these enterprises is through a network of trusted partners that consists of reliable Russian IS integrators and business consultants having established connections to Russian manufacturing companies and possessing the needed competence.

Success of service-intensive manufacturing firms - resource-based view

The main objective of this study is to examine the relationships between resources, competitive advantage and firm success. The study focuses, on one hand, on the financial performance of service-intensive manufac-turing firms against competitors with a lower service intensity and, on the other hand, on the resources as drivers for competitive advantage and success. The purpose of the theoretical part is to link the study in the field of the strategy research. The empirical part of the study is based on the quantitative analyses of the survey data collected from 50 major suppliers of industrial machinery and transportation equipment in Europe and North America. Results indicate that service-intensive manufacturing firms have performed better and their performance has been more stable vis-à-vis their peers. The main resources that differentiate service-intensive manufacturing firms from their non-service intensive competitors are service strategy and service-oriented top management. The analyses on the VRIO resources produced only a limited amount of information and solely service-centred culture appeared to be a rent generating resource.

Researching Manufacturing Planning and Control system and Master Scheduling in a manufacturing firm.

The objective of this thesis is to research Manufacturing Planning and Control (MPC) system and Master Scheduling (MS) in a manufacturing firm. The study is conducted at Ensto Finland Corporation, which operates on a field of electrical systems and supplies. The paper consists of theoretical and empirical parts. The empirical part is based on weekly operating at Ensto and includes inter-firm material analysis, learning and meetings. Master Scheduling is an important module of an MPC system, since it is beneficial on transforming strategic production plans based on demand forecasting into operational schedules. Furthermore, capacity planning tools can remarkably contribute to production planning: by Rough-Cut Capacity Planning (RCCP) tool, a MS plan can be critically analyzed in terms of available key resources in real manufacturing environment. Currently, there are remarkable inefficiencies when it comes to Ensto’s practices: the system is not able to take into consideration seasonal demand and react on market changes on time; This can cause significant lost sales. However, these inefficiencies could be eliminated through the appropriate utilization of MS and RCCP tools. To utilize MS and RCCP tools in Ensto’s production environment, further testing in real production environment is required. Moreover, data accuracy, appropriate commitment to adapting and learning the new tools, and continuous developing of functions closely related to MS, such as sales forecasting, need to be ensured.

Algorithmic Solutions for Combinatorial Problems in Resource Management of Manufacturing Environments

This thesis studies the use of heuristic algorithms in a number of combinatorial problems that occur in various resource constrained environments. Such problems occur, for example, in manufacturing, where a restricted number of resources (tools, machines, feeder slots) are needed to perform some operations. Many of these problems turn out to be computationally intractable, and heuristic algorithms are used to provide efficient, yet sub-optimal solutions. The main goal of the present study is to build upon existing methods to create new heuristics that provide improved solutions for some of these problems. All of these problems occur in practice, and one of the motivations of our study was the request for improvements from industrial sources. We approach three different resource constrained problems. The first is the tool switching and loading problem, and occurs especially in the assembly of printed circuit boards. This problem has to be solved when an efficient, yet small primary storage is used to access resources (tools) from a less efficient (but unlimited) secondary storage area. We study various forms of the problem and provide improved heuristics for its solution. Second, the nozzle assignment problem is concerned with selecting a suitable set of vacuum nozzles for the arms of a robotic assembly machine. It turns out that this is a specialized formulation of the MINMAX resource allocation formulation of the apportionment problem and it can be solved efficiently and optimally. We construct an exact algorithm specialized for the nozzle selection and provide a proof of its optimality. Third, the problem of feeder assignment and component tape construction occurs when electronic components are inserted and certain component types cause tape movement delays that can significantly impact the efficiency of printed circuit board assembly. Here, careful selection of component slots in the feeder improves the tape movement speed. We provide a formal proof that this problem is of the same complexity as the turnpike problem (a well studied geometric optimization problem), and provide a heuristic algorithm for this problem.

Intellectual Property Protection in China in the Cases of Outsourcing and own Manufacturing

The intellectual property (IP) environment in China is still very immature. There are several problems in legal, political, economic, social-cultural, competitive and labor environment which have hindered IP legal enforcement. Under such circumstances, IP misappropriation is a major concern especially for foreign small and medium-sized enterprises (SMEs) doing business in China. These circumstances require foreign companies, no matter whether they are multinational corporations (MNCs) or SMEs and have own manufacturing in China or not, to take strong IP actions. Therefore, the purpose of this study is to discuss how IP can be protected in China in the case of outsourcing and in the case of own manufacturing. The comparison will consider the process of outsourcing and own manufacturing consisting two stages: preparation stage and operation stage. In order to clarify the conceptual arguments, two illustrative case studies were studied. The case data bases on two semi-structured interviews of the managing directors, field notes and archival data. The findings propose that attention in IP protection should be given to following issues: integrating IP strategy into the company’s business strategy, protecting the most critical knowledge, regarding IP steps as a whole in the protection mechanism and making IP strategy as proactive as possible. The major difference between outsourcing and own manufacturing in IP protection is in the operation stage. Besides, the findings also provide managerial advice on IP protection, e.g. foreign managers should be prepared for IP risks in China, they should establish an own IP protection mechanism which matches the company’s situation and they should consider IP protection as an on-going process.

Improving Product Information Management in Global Project Based Manufacturing

The transition of project based manufacturing business, even more into global networks, sets up challenges for companies to manage their business in this new operating environment. One way to tackle these challenges is the successful management of product information through an extended product’s lifecycle. Thus, one objective of this research is to find ways how product information management in global project based manufacturing can be improved. Another objective is to find a solution how the target company can improve its product information management in the offer-to-procurement business process. Due to the nature of the topic, the study follows constructive research methodology with qualitative methods. By combining literature related to this topic a framework is created to improve product information management in global project based manufacturing. The improvement process in this framework is based on a systematic approach from the current state towards target state. A general aim for improvements should be the integrated product and project lifecycle information management through Lean approach. This introduced framework is applied to the target company through two case projects. Data for building view of current state and analysis is collected mostly by theme interviews and also utilizing other material from the target company. Used tools help to analyzing was the BPMN and the Trace matrix for business chains. Results of the improvement process are collected in a solution proposal which contain the strategic target state as well as long and short term objectives. The strategic target state is defined as controlled customization. Also during the improvement process are created the Information requirements chart in the offer-to-procurement business process, and the Project related initial information questionnaire to customer.

Service Productization and Product Servitization in The Contract Manufacturing Company

The role of contract manufacturing and subcontracting has been seen in black and white in product and service point of view. It used to be seen either as a product or a service. In the thesis product-service system, offering combining products and services, was discussed. Theory was created from two perspectives; Service productization via Business Model generation and product servitization via New Service Development process. Target for the case study was to point out new ways of service thinking and ways for changing business environment in contract manufacturing, especially in customer satisfaction and profitability point of view. The case study is following the New Service Development process phases. First ideas were collected from literature and via sales management interviews. Service offering and tool for service requirement evaluation was created. Last financial results of example service scenarios were calculated. It is recommended to take service offering into internal use and further develop it into modular service model. It is also recommended to take created customer service requirement evaluation tool into use for capturing customer service needs but also for communicating those internally.