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Two papers in supply chain design : supply chain configuration and part selection in multigeneration products

IP.com Disclosure Number: IPCOM000128055D
Original Publication Date: 1999-Dec-31
Included in the Prior Art Database: 2005-Sep-14
Document File: 5 page(s) / 20K

Publishing Venue

Software Patent Institute

Related People

Willems, Sean Peter: AUTHOR [+3]

Related Documents

http://theses.mit.edu:80/Dienst/UI/2.0/Describe/0018.mit.theses/1999-112: URL

Abstract

Increasing competitive pressures are forcing companies to increase their rates of innovation. The increasing rate of innovation shortens each product's duration in the market, thereby compressing each product's life cycle. Without proper management, increasing product turnover will increase design and manufacturing costs. More frequent product development cycles require additional product development resources. Shorter production runs inhibit a company's ability to achieve manufacturing cost reductions by exploiting the learning curve and scale economies. Unless companies can efficiently manage multiple generations of the product, there is a substantial risk that costs will spiral out of control. Focusing on supply chain design is one way companies can combat the problems caused by increased competition and shorter product life cycles. Supply chain design attempts to create the appropriate supply chain for the company's operating environment. This dissertation addresses two problems that are relevant to supply chain design, The first problem addresses how to configure a new product's supply chain. In this problem, the product's design has already been fixed. The central question is determining what parts and processes to select. For example, various vendors can supply a certain raw material, multiple machines or processes can manufacture the assembly, and multiple shipping options can deliver the completed product to the final customer. Each of these different options is differentiated by its production time and direct cost added. Given these various choices along the supply chain, the problem is to select the options that minimize the total supply chain cost. The second problem addresses part selection for multigeneration products. When product life cycles are short, the company could opt to overengineer certain components car subsystems in the current generation. This would increase the current period's costs but allow the company to forgo a development cycle in the next period and gain cost efficiencies by exploiting the higher volume from two generations of demand. This research considers development costs, manufacturing costs and part functionality requirements in order to determine the optimal upgrade path for components across multiple product generations. Thesis Supervisor: Stephen C. Graves Title: Professor of Management Science

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TWO PAPERS IN SUPPLY CHAIN DESIGN: SUPPLY CHAIN CONFIGURATION AND PART SELECTION IN MULTIGENERATION PRODUCTS

by

Sean Peter Willems
B.S.E. Economics Wharton School, University of Pennsylvania, 1993 S.M. Operations Research Massachusetts Institute of Technology, 1996
Submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Management
Alfred P. Sloan School of Management

at the Massachusetts Institute of Technology

February 1999
SIGNATURE OF author: [[signature omitted]]

Alfred P. Sloan School of Management January 25, 1999
CERTIFIED BY: [[SIGNATURE OMITTED]]

Stephen C. Graves Abraham J. Siegel Professor of Management Co-director, Leaders for Manufacturing Program ACCEPTED BY: [[SIGNATURE OMITTED]]

Birger Wernerfelt

Professor of Management Science Chair, Doctoral Program

ARCHIVES MASSACHUSETTS INSTITUTE OF TECHNOLOGY LIBRARIES FEB 24 1999

Massachusetts Institute of Technology Page 1 Dec 31, 1999

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Two papers in supply chain design : supply chain configuration and part selection in multigeneration products

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TWO PAPERS IN SUPPLY CHAIN DESIGN: SUPPLY CHAIN CONFIGURATION AND PART SELECTION IN MULTIGENERA'I'ION PRODUCTS

by

Sean Peter Willems

Submitted to the Alfred P. Sloan School of Management on January 26, 1999 in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy in Management

Abstract

Increasing competitive pressures are forcing companies to increase their rates of innovation. The increasing rate of innovation shortens each product's duration in the market, thereby compressing each product's life cycle. Without proper management, increasing product turnover will increase design and manufacturing costs. More frequent product development cycles require additional product development resources. Shorter production runs inhibit a company's ability to achieve manufacturing cost reductions by exploiting the learning curve and scale economies. Unless companies can efficiently manage multiple generations of the product, there is a substantial risk that costs will spiral out of control.

Focusing on supply chain design is one way companies can combat the problems caused by increased competition and shorter product life cycles. Supply chain design attempts to create the appropriate supply chain for the company's operating environment. This dissertation addresses two problems that are relevant to supply chain design,

The first problem addresses how to configure a new product's supply chain. In this problem, the product's design has already been fixed. The central question is determining what parts and processes to select. For example, various vendors can supply a certain raw materia...