Research On Functions Of Flexibility And Its Investment Strategies In Distributed Manufacturing Systems

In operations management, flexibility is viewed as a hedging tool against uncertainty from the market demand and production capacity, is an important means to improve competitiveness and has a significant role in strategic market decision. Nowadays, world move towards a global economy, with markets demanding for products with high quality at lower costs, highly customized and with short life cycles, imposing new requirements on manufacturing enterprises, namely in terms of flexibility,quality, agility and response, that are crucial for an enterprise. The shape of global competition is changing from company-based competition to supply chain competition. In this world wide market competition environment, the companies can no longer be seen acting alone, being forced to reconsider the way they are organized to increase their competitiveness and tend to share skills and knowledge, networking together to achieve global production. This situation provides the opportunity for small and medium-sized enterprises in the industrial districts which are participating in supply chains or forming virtual enterprises and cooperating to satisfy the diverse and uncertain demands. And these chain or network structures of the distributed manufacturing systems are lack of a central decision-making unit and lack of coordinated decision-making ability and capacity configuration capability,the flexibility investment rules in a company are not applied to these distributed manufacturing systems completely. Therefore, research on the functions of flexibility and its investment strategies in distributed flexible manufacturing systems has both theoretical significance and strong application value.The acquisition of flexibility in the single manufacturing organization with the operational aspects is studied in many literatures, but the literature about the flexibility investment decisions problem in the distributed manufacturing system in which there exist many independent and autonomous entities is rare. The exchange of information, material and cash flow exist in the enterprises and their upstream and downstream because of the interactions among them. Enterprise's performance depends not only on the adoption of the flexible manufacturing technology and internal operation management, but also on the flexible manufacturing technology investment, cooperation or competition modes of the upstream, downstream even competitors. Therefore, flexibility decision can is influenced by the internal operation management and external environment of organization. In this paper, from the perspectives of the internal and external environmental factors, flexible technology investments, internal operation and marketing strategies, the relationship between flexibility and lead time reduction, the impact of flexibility on inventory management performance, the role of flexibility in response to demand and capacity uncertainty, the relationship between flexibility and subcontracting, flexibility investment rule in the distributed manufacturing system, and the role of flexibility to market strategy are analyzed. The whole performance of the distributed manufacturing system can be enhanced by reasonable flexibility investment in individual enterprise, and this flexible system has more advantages and competitiveness.The organization of the thesis is as follows:In Chapter 1, we outline the background of this thesis, and review the literature on flexibility and flexibility decision in the distributed manufacturing system. The flexibility types of the traditional flexible manufacturing system and the role coping with uncertainty of the external and internal environment is summed up. Finally the content and significance of the thesis are addressed.In Chapter 2, the role of flexibility for inventory management in the supply chain, and the relationship between flexibility and lead time are analyzed. Lead time reduction can make supply chain more flexible, the inventory cost decreased, and profit increased. The game model under the coordination mechanism based on revenue sharing in a two-stage supply chain is developed. The extra benefits of the retailer because of the lead time reduction which is achieved from the flexible equipment investment by the manufacturer are shared between upstream and downstream enterprises in the supply chain. Under this environment, the problem about the lead time reduction and retailer inventory management decision is solved. In Chapter 3, the role of flexibility coping with the production capacity uncertainty and the relationship between flexibility and bullwhip effect are analyzed. Bullwhip effect is the phenomenon that the demand variability increases as one moves up a supply chain. The source of Bullwhip effect is the uncertainties which exist in the supply chain. Under AR(1) demand, the influence of variability of a plant's production capacity on the bullwhip effect is analyzed in different scenarios,i.e.,production capacity with normal, exponential and beta distributions.In chapter 4, our focus is the flexibility decision problem for the distributed flexible manufacturing systems such as supply networks and industrial districts under both central and distributed control. We compute solutions for the central control problem using an integer linear program while we obtain solutions for the distributed case by implementing the plants in the manufacturing network as agents that exchange messages based on contract net protocol in order to the success of subcontracting.Chapter 5 analyses the relationship between flexibility and market strategy, and the role of flexibility investment on market entry and entry deterrence in the distributed manufacturing system. In a competitive environment, the impact of market structure (market size and product substitutability), flexible technology investment costs, investment sequence and the flexible technology investment of the competitors on the equilibrium of flexibility investment is analyzed. For the complex distributed flexible manufacturing system, the multi-agent simulation model is developed to solve the flexibility decision making problem with the joint utilization of complex adaptive system theory and evolutionary game mechanism. From the perspectives of market strategy and operations management, flexibility investment rules in the distributed flexible manufacturing system are summarized.Chapter 6 concludes the thesis, summarizes the main innovations, and gives some directions for further research.The main innovations and contributions of this thesis are briefly summarized as follows:(1) For the lead time reduction problem in the two-stage flexible supply chain, the Stackelberg game model based on revenue sharing coordination mechanism is developed to study the relationship among the order batch quantity, lead time reduction ratio and revenue sharing ratio. The benefit which comes from the lead time reduction is shared in upstream and downstream member enterprise. The lead time reduction in upstream is stimulated by the revenue sharing, so the stock cost of downstream is reduced. From the model mentioned above, the problem of lead time reduction coordination and inventory management is solved. (2) From the perspective of industrial district of small and medium enterprises, enterprises which invest flexibility to expand production capacity to effectively deal with demand uncertainty through the collaborative subcontracting. The relationship between the competitiveness of industrial district and flexibility is analyzed from the perspective of the operations management. And from the perspective of market strategy and operations management, the flexibility investment decision rules in the distributed flexible manufacturing system are analyzed.