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Variety and volume dynamic management for value creation in changeable manufacturing systems

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  • Ahmed M. Deif
  • Hoda A. ElMaraghy

Abstract

In today’s uncertain market and continuously evolving technology, managing manufacturing systems are more complex than ever. This paper studies the dynamics of managing variety and volume to enhance value creation in manufacturers implementing system-level advanced and automated manufacturing technology (AAMT). The demand is composed of heterogeneous customers who make purchasing decisions depending on the variety levels and lead times of the firm’s product offerings. The cost structure adopted calculates profit as the difference between customer value creation rate (VCR) and costs associated with the process of creating this value. Reported results contribute to the variety and volume management literature by offering analytical clarity of factors affecting product platforms and capacity scalability management for systems with AAMT. In addition, insightful answers to the trade-offs between profit maximising market coverage and investments, smoothing demand policies and system stability for this type of environment are presented. Furthermore, the value of market information in deciding the industrial technology investment and also the impact of product life cycle on the same investment is captured.

Suggested Citation

  • Ahmed M. Deif & Hoda A. ElMaraghy, 2017. "Variety and volume dynamic management for value creation in changeable manufacturing systems," International Journal of Production Research, Taylor & Francis Journals, vol. 55(5), pages 1516-1529, March.
    • Handle: RePEc:taf:tprsxx:v:55:y:2017:i:5:p:1516-1529
    DOI: 10.1080/00207543.2016.1222088
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    Cited by:

    1. Palmié, Maximilian & Parida, Vinit & Mader, Anna & Wincent, Joakim, 2023. "Clarifying the scaling concept: A review, definition, and measure of scaling performance and an elaborate agenda for future research," Journal of Business Research, Elsevier, vol. 158(C).
    2. Wong, David T.W. & Ngai, Eric W.T., 2023. "The impact of advanced manufacturing technology, sensing and analytics capabilities, and planning comprehensiveness on sustained competitive advantage: The moderating role of environmental uncertainty," International Journal of Production Economics, Elsevier, vol. 265(C).

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