Human Systems Management

Production is the foundation of value addition in industry. Technical developments in the economic centres of the world and above all within the Triad, the economic territories of Europe, the United States and Japan, have brought about prosperity and freedom of movement. On closer inspection of these economic territories, we state that there are considerable changes regarding their position in competition, the reasons for which are not to be found in the different cultural and basic conditions, but are due to the methods of industrial production and newer methods of organization. Far Eastern enterprises have clearly better positions in competition, particularly compared to European enterprises. Changes in production engineering due to new technologies also always effect our work. At the moment, electronics has a structure-changing influence. Never before have we been able to process information and accelerate production handling so fast as is possible today. The computer-controlled production releases new potentials and opens up new paths for the design of flexible and autonomous production concepts which in joint condition can be applied European-wide. If a linkage of these production concepts with the methodical approaches of an optimized production can be realized successfully, high efficiency reserves will be activated. Computer-controlled production also demands an adaptation to the different requirements of people. As it was possible in the past to achieve compatibility of labour and technology, there have to be possibilities in the future to harmonize production with environment.

ESPRIT II CIM for multi supplier operations (CMSO) identified the need for companies to manage beyond their own boundary and beyond their immediate supplier and customer relationships. The importance of satisfying end customers needs was highlighted. No methods or approaches to help companies manage their chains were found, so a supply chain methodology was designed and developed. Its application in the automotive aftermarket in the UK and Spain highlighted reasons, previously not observed, for ineffectiveness and inefficiency of the supply chains studied. The results of the work are a guidebook, detailing the methodology, a case study book describing its application in detail, and a shell of a decision support system to support the future use of the methodology.

Much has already been written and spoken on the concepts of total quality, and how they might be applied to a particular business. This paper will focus on the development of these concepts and their application to the improvement of the performance of total supply and distribution chains. The paper will emphasise the practical aspects of total quality in order to make rapid change happen – and then to make it stick.

A logistics chain simulator tool to evaluate logistics operations at strategic and tactical levels in multi-organizational environments is presented. An overview of the basic architecture concepts and main features of this simulator is given and some simulation scenarios are discussed.

EDI is the automated exchange of business information. It simplifies the trade procedures and makes the data more reliable. In the chemical industry EDI is considered as a strategic tool for their international business. Paper elimination is only a minor advantage of EDI, the substantial benefits are achieved through an increased internal efficiency, more efficient business practices and long term partnerships. EDI is therefore not something that can be left to the IT department. EDI applications can only be successful if it is driven by business considerations and management is committed to it.

In this paper the CMSO approach of analysing, modelling and supporting interorganisational manufacturer/supplier operations in the automotive industry is presented. Starting from a global point of view the CMSO model of logistics chains is defined, and the requirements for intelligent and open communications between organisations are discussed. The CMSO-Box concept, a powerful means for implementing open EDI, is introduced by presenting two significant open business communication scenarios. Finally the CMSO EDI reference model and a brief outline of the general system architecture on which the CMSO-Boxes are technically based are presented.

The European and North American automotive industries are facing a strong challenge posed by the Japanese automotive industry. Recent investigations predict the loss of hundreds of thousands of jobs when the import restrictions on the European automotive market are completely lifted. What is the basis for these prognoses?

The success of Japanese companies on the world market and their significant growth rates over the last few years are often explained by references to Far Eastern entrepreneurialism, based on an autonomous cultural identity. In addition, new manufacturing technologies and organisational innovations such as KANBAN and JIT are said to be involved.

An MIT study covering the last five years concluded that Japanese companies produce two or three times as many cars per worker as European or American factories. This also applies to so-called transplants, assembly plants in Europe or North America under Japanese management. The advantages of this high productivity have been summarized in the expression ‘lean production’, which describes an integrated approach to the manufacturing process. This comprehensive approach is based on a simultaneous engineering process which combines product and manufacturing tool design and development, material requirement planning, close ties with suppliers and not least, continuous improvements to the quality of the manufacturing process.

This paper deals with three alternative reactions to this challenge. The means of combatting this challenge are presented using concrete examples. Individual stages in the supply chain will be examined in greater detail, and opportunities for improvement proposed.

The automotive market does not show a great variability of the demand for a certain model of car over a period of a year; at the same time the car manufacturer minimizes the effects of a reduced demand by offering a large number of optionals. The production system of a car manufacturer is almost inflexible, for the quantities and the daily production for a given model are usually stable. For an automotive components supplier the variations on the mix are actually variations on production volumes.

A logistics department, when solving this production problem, looks mainly for a feasible solution – the stock and production capacities are checked. The global cost evaluation is roughly made while planning; two main things are controlled: the man-power allocation and the stock cost. A modification of the planning solutions based on the real total production cost for the company is unfeasible because a total cost-based methodology and tool are not available. Another problem that Magneti Marelli faces is that the finished product for the car manufacturer is more and more often a complete functional ‘system’. This requires a planning which involves different plants from different production divisions inside the company.

A full integration inside the company and with the external suppliers is necessary to increase the service to the customer, minimizing the costs. The increasing of the level of service to the customer implies lead-time reduction and cost minimisation. Where many sub-suppliers must be interfaced, the lead-time reduction can be obtained with a stock as large as the flexibility of the customer demands. However, this strategy cannot satisfy the second objective, which is the reduction of costs. These constraints bring the car component supplier to look for an integrated production system where he and his supplier act like a single company.