In practice, there are two main strategies to deal with dynamics. The first is to select processors and facilities that enable easy design transformation, and to try to dynamically alter the design so as to always be as near to optimal as possible for the forthcoming operations. Figure 5.13 can be seen as an example of this strategy. The second is to develop a design that is as robust as possible, as immune to change as pos-sible, a design that requires minimal changes to accommodate in a satisfactory manner a wide spectrum of scenarios (Montreuil and Venkatadri 1991, Montreuil 2001, Benjaafar et al. 2002). Figure 5.14 provides an example of this strategy by simply expanding the robust design of Figure 5.11 to be able to deal with the estimated requirements for year 4. It is left as an exercise to assess how to subtract processors from Figure 5.10 to deal with the lower expected requirements for years 1 to 3.
In the above examples, a yearly periodicity has been used for illustrative purposes. In practice, the rhythm of dynamic design reassessment and transformation should be in line with the clock speed of the enterprise, in synchronization with the advent of additional knowledge about the future and the lead time required for processor and facility acquisitions and moves. Even decades ago, some companies were already reconfiguring their shop floor layouts on a monthly basis, for example, in light assembly factories dedicated to introducing new products on the market, assembling them until demand justified mass production.
In the illustrative example of Figure 5.13, the planning horizon has been set to four years. Again, this depends on the specific enterprise situation. It can range from a few days in highly flexible, easy-to-alter designs to decades in rigid designs in industries with low clock speeds.
location-allocation problems. The organizational design states, for example, that the logistic network is to comprise only distribution centers that are to be the sole source for their assigned market segments.
The set of market segments is defined geographically and in terms of demand. Depending on the actual location and sizing of distribution centers, the assignment of segments to centers can be performed, completing the organizational design.
Adapted from Montreuil et al. (1998), Table 5.14 provides a responsibility-based typology of centers and facilities. First, types of centers are segregated by their defining orientation. The options are product, process, project, market, and resource orientations. A product-oriented organization defines the respon-sibility of the center in terms of a set of products. In contrast, a process organization does not state responsi-bilities in terms of products; it is, rather, in terms of processes. The same logic holds for the three other orientations.
For each orientation, Table 5.14 provides a set of types of centers, stating for each its type of responsibility.
Product-oriented organizations are segregated into three types: product, group, and fractal. A product TABLE 5�14 Responsibility-Based Center Typology
Center
Orientation Center Type Responsibility Set Responsibilty in Terms of
Demand Satisfaction
Product Set of products All or a fraction
Product Single product All or a fraction
Group Specific group or family of products All or a fraction Product fractal Most products; generally multiple centers are
replicated to meet demand A fraction
Process Set of processes All or a fraction
Function A single function, elementary process or operations Generally all, yet can be a fraction
Process A composite process composed of linked elementary
processes All or a fraction
Holographic A set of elementary processes; generally multiple
centers are distributed to meet demand A fraction Process fractal Most processes; generally multiple centers are
replicated to meet demand A fraction
Project Set of projects All or a fraction
Order or
contract A specific order, contract or, in general, project Generally all, except for very large cases
Repetitive
project Projects of the same that repeatedly occur through
time All or a fraction
Program A long-term program involving a large number of
planned deliveries Generally all
Market Set of markets and/or clients Generally all
Client A specific client Generally all
Client type A set of clients sharing common characteristics and
requirements Generally all
Market A market or market segment, defined by geography
or any other means Generally all
Resource Set of resources to be best dealt with Generally all
Inbound
product Set of inbound products needing to be processed Generally all Supplier Set of suppliers whose input has to be processed Generally all Team Set of people whose capabilites have to
be best exploited and needs have to be best met
Generally as much as possible given their capacity, capabilites and preferences Processor Set of processors (equipment,
workstation, etc.) to be exploited as best as possible
Generally as much as possible given their capacity and capabilites
Source: Adapted from Montreuil et al. in Material Handling Institute, Braun-Brumfield Inc., Ann Arbor, Michigan, 1998, 353–379.
center is devoted to a single product. A group center is devoted to a group or family of products. Note that product is here a generic term which encompasses materials, components, parts, and assemblies as well as final products. Table 5.14 also indicates that a product or group center may be made responsible for only a fraction of the entire demand for that product or group. For example, it can be decided that there are to be two product centers mandated to manufacturing a star product. The former is to be responsible for the steady bulk of the demand while the latter is to deal with the more fluctuating portion of demand above the steady quantity assigned to the former. Similarly, instead of assigning the fluctuating portion to another product center, it can assign it to a group center embracing similar situations. The possibilities are endless.
A product- oriented fractal organization offers a different perspective. It aims to have a number N of highly agile centers, each capable of dealing with most products, assigning to each fractal center the responsibil-ity of 1/N of the demand of each product. This allows operations management to dynamically assign products to centers in function of the dynamic repartition of demand among the products (Venkatadri et al. 1997, Montreuil et al. 1999). Implementing a product organization has tremendous impact on flow through the network and the constitution of each center in the network. Product centers rarely have flow of products between them, except when one provides products that are input to the other. There is more complex flow within the center as one switches from a product center to a group center and then to a fractal center. Also, when only product or group centers are used, most of the specific customer–supplier relationships are predefined. Whenever fractal centers are used, then workflow assignments become dynamic operational decisions.
Process orientations are segregated into four types: function, process, fractal, and holographic.
Function, process, and fractal types are the process-oriented equivalent of the product-oriented product, group, and fractal types. For example, a process-oriented fractal center is responsible for being able to perform most elementary processes, with 1/N of the overall demand for these processes (Askin 1999).
Again, adopting a process orientation has significant impact on workflow patterns. For example, func-tion centers have minimal flow between the processors constituting them and have significant flows with other centers. Illustratively, an injection center has minimal flow between the injection molding machines, except for the sharing of molds, tools, and operators. In fact, when a network is composed only of func-tion centers, a product with P processing steps will have to travel between P distinct funcfunc-tion centers. In such cases the relative layout of centers becomes capital in order to contain the impact on inter-center material handling/transport. Holographic organization generates a number of small centers responsible for a limited set of related processes. Most centers are replicated and strategically distributed throughout the network or facility. In fact, the robust flexible layouts of Figures 5.11 and 5.14 are exploiting a holo-graphic organization where each processor is conceived as a small center, instead of a function organiza-tion as in the layout of Figure 5.5.
Project-oriented organizations lead to center types that are defined in terms of orders, contracts, proj-ects, or programs. A manufacturer bids for and then wins the bid for a major contract involving a set of products and processes to be performed in given quantities according to a negotiated delivery schedule.
When its managers decide to implement a facility strictly devoted to delivering this contract, the resulting facility is of the contract type. Similarly, when a factory within an automotive network is awarded a multi-year program to manufacture all engine heads of a certain type for the European market and when it devotes a center to this production, its organization now has a program center. Repetitive project centers are centers well conceived and implemented to realize specific types of projects that come up repetitively.
This is common in the aeronautical industry where, for example, large centers are well equipped to per-form a variety of overhauls, maintenance or assembly of airplanes depending on the flow of projects signed by the enterprise.
Resource-oriented organizations can be segregated into four types of centers. Inbound product centers and supplier centers are respectively specialized to perform operations on certain types or groups of inbound products or on all products incoming from a set of suppliers. Processor and team centers are similar conceptually, designed to exploit the capabilities and capacity of a set of processors and humans, respectively. A center grouping all the CNC machines in a factory is an example of processor center.
Table 5.14 opens a wealth of organizational design options. First, each network can be composed of any combination of centers from the various types. Second, the types provided have to be perceived as building blocks which allow the design of composite or hybrid types of centers, such as a center devoted to performing a set of processes on a group of products. Third, it can be used recursively. Higher-level facilities or centers have to be organized according to a pure or hybrid type. These can be composed of a network of internal lower level centers. Each of these has to be organized, not restricted to the same type as its parent.
To illustrate the impact of network organization, for the illustrative case leading to the layouts starting in Figure 5.5, there has been the implicit assumption that the organizational design states that all the prod-ucts and processes have to be performed within the same centralized facility. When this constraint is removed and further market information is provided, a network organization such as depicted in Figure 5.15 is quite possible. In the network of Figure 5.15, a global factory is proposed to manufacture products P1, P2, as well as P4 to P9. Another global factory is specialized to manufacture product P3. Three market-specific product group facilities are to be implemented. These will all make products P10 to P18. Each will be dedicated to serving a specific market: America, Europe, or Asia. Each market is to be assigned a num-ber of regional distribution centers fed by the global P3 factory and the three P10-to-P18 factories. Now, instead of having to locate and lay out a single global facility, the design task involves locating interacting factories and distribution centers, and to organize, size and lay out each of these.
Here the organizational emphasis has been put on the centers, stressing the importance of their specific responsibilities and their customer–supplier relationships. Figure 5.16 depicts clearly another important network organi zation facet: the type of organization structure of the network. Figure 5.16 provides a sample of seven types of structures resulting from organizational design of the network.
The first is termed a fixed product structure. Here the idea is that the product is brought to one location and does not move until departing the system. The processors and humans are the ones moving to, into, and away from the stationary product. The second structure type is a parallel network, where all flow is leading inbound products into one of the centers and then out of the system. The third is a flow line where each center is fed by a supplier and itself feeds a client center, this being repeated until the product gets out of the system. Centers store and/or perform operations on the product.
The fourth structure is a serial-parallel network, typical of a flow shop. This structure combines the flow line and the parallel network. It is conceived as a series of stages. At each stage, there are parallel centers
Global P3 factory
Europe DC
Americas DC
Asia DC European
P10 to p18 factory
American P10 to p18 factory
Asian P10 to p18 factory Global
P1, P2, P4 to P9 factory
Asia DC Asia DC Americas DC
Americas DC Europe DC
Europe DC
FIGuRE 5�15 A multi-facility product oriented organization of the illustrative case.
jointly responsible for delivering the stage responsibility. The fifth structure is a job shop network charac-terized by a profusion of inter-center flows that have no dominant serial or parallel pattern.
Whereas structures one to five can be mainly mono-echelon, the sixth and seventh example structures are multi-echelon in nature. Indeed, they explicitly deal with the fact that products are needed constituents of other higher-level products and organize the network around these bill-of-materials relationships among products. The sixth structure is an assembly tree. Here each center feeds a single center which later per-forms operations on the delivered products and/or assembles the delivered products into higher-level products. The seventh structure is a disassembly network. Instead of assembling products, it disassembles them. Instead of being restricted to a directed tree, it is conceived as a more flexible directed network.
Here the main difference is that a center may have more than one client center, while maintaining the no backtracking constraint of the tree structure. One can easily think of a disassembly tree structure or an assembly network structure.
Network structures have direct influence on flow patterns and therefore on layout and location deci-sions. In fact, it can be said that the organizational combination of responsibility assignment and network structure sets the stage for layout and location studies. However, more important in a highly competitive economy is the fact that integrating the organizational, location, and layout design processes offers the potential for designing networks with higher overall performance potential.