IMPLEMENTATION OF THE HYBRID LEAN-AGILE MANUFACTURING SYSTEM STRATEGIC FACET IN AUTOMOTIVE SECTOR
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IMPLEMENTATION OF THE HYBRID LEAN-AGILE MANUFACTURING SYSTEM STRATEGIC FACET IN AUTOMOTIVE SECTOR

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Recently the hybrid lean-agile manufacturing system has been proposed in order to meet the current automotive market winning order criterion of a blend of cost and availability. This study shows how ...

Recently the hybrid lean-agile manufacturing system has been proposed in order to meet the current automotive market winning order criterion of a blend of cost and availability. This study shows how strategically a hybrid lean-agile manufacturing system can be implemented. It shows statistically that almost one third of the variation in successfully dealing with the sources of competitive advantage in automotive sector can be explained by adopting the strategic facet of the hybrid lean-agile manufacturing system. The cost demanded by the implementation of the hybrid lean-agile manufacturing system can be moderated by the gained benefits of reduced operational cost and reduced time to market.

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IMPLEMENTATION OF THE HYBRID LEAN-AGILE MANUFACTURING SYSTEM STRATEGIC FACET IN AUTOMOTIVE SECTOR Document Transcript

  • 1. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 IMPLEMENTATION OF THE HYBRID LEAN-AGILE MANUFACTURING SYSTEM STRATEGIC FACET IN AUTOMOTIVE SECTOR Salah A.M. Elmoselhy MBA Alumnus, Maastricht School of Management, Maastricht, The NetherlandsABSTRACTRecently the hybrid lean-agile manufacturing system has been proposed in order to meet the current automotivemarket winning order criterion of a blend of cost and availability. This study shows how strategically a hybridlean-agile manufacturing system can be implemented. It shows statistically that almost one third of the variationin successfully dealing with the sources of competitive advantage in automotive sector can be explained byadopting the strategic facet of the hybrid lean-agile manufacturing system. The cost demanded by theimplementation of the hybrid lean-agile manufacturing system can be moderated by the gained benefits ofreduced operational cost and reduced time to market.KEYWORDS: Lean Manufacturing; Agile Manufacturing; Manufacturing Strategy; Value Chain I. INTRODUCTIONGetting the right product, at the right price, at the right time, in the right place to the consumer is notonly the way to achieve competitive advantage, but is also the key to sustainable success in themanufacturing sector. According to Womack [1,2] significant interest has been shown in recent yearsin the idea of ‘lean manufacturing’ and the broader concept of the ‘lean enterprise’. Yet, the demandin the current automotive market is volatile and the customers requirements for variety are high whichtogether demand for a much higher level of agility. Hence it is not surprising that becomingcompetitive in terms of cost, a “lean” attribute, can cause the value chain to become threatened interms of availability, an “agile” attribute. A newer manufacturing approach than the leanmanufacturing to deal with the change in the manufacturing business environment is agilemanufacturing. The concept of agility comprises two main factors which are: (a) responding to changein proper ways and in good time and (b) exploiting changes and taking advantage of them asopportunities [3,4]. Yet, this agile manufacturing approach has exhibited a cost challenge.This research stems from the changes in the manufacturing business environment in the automotivesector that have led to customers requirements of both competitive cost and availability withoutcompromising quality [5]. The research method adopted in the present research starts with literaturereview of the manufacturing systems which traditionally exist in automotive industry. From thisliterature review research questions are derived. Answers to some of these research questions areproposed in a form of a research hypothesis. The rest of the research questions are answered from theliterature review. In an endeavour to validate the research hypothesis, both interview with executivesof and review of annual reports of ground vehicle manufacturing companies and Original EquipmentManufacturers (OEMs) have been conducted. Since case studies are useful in developing solutions tothe current manufacturing business problems, the General Motors Production System, as a leader in 241 Vol. 5, Issue 1, pp. 241-258
  • 2. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963automotive sector that has a global corporate strategy, is examined in light of the proposed HLAMS,in order to verify the relevance of the proposed manufacturing system to the real world of theautomotive business.This research paper investigates the implementation of the strategic aspects of the proposed HLAMS.The paper starts with literature review. Research questions are then derived from literature review.Risk management in product design and manufacturing is investigated after that and the presentresearch will identify how HLAMS addresses this aspect. This is followed by presenting the proposedimplementation method of the strategic aspects of the proposed HLAMS. Finally, verification,validation, and the limitations of the proposed manufacturing system will be presented. II. LITERATURE REVIEWIn order to balance the automotive product portfolio, the engineering resources have to be utilized byglobal vehicle platforms by shifting product development and manufacturing programs to low-costmanufacturing bases, such as China, India, Mexico, Brazil, and South Africa [6]. The challenge willbe in building a global engineering network to support vehicle product development andmanufacturing in such multiple regions [7-10]. Therefore, the concept of hybrid lean-agilemanufacturing system (HLAMS) has been proposed recently [11].The rules for competing and surviving in the automotive industry are changing rapidly. Time andknowledge are the essence of winning in the contemporary marketplace [12]. Thus, success in theglobal automotive market is increasingly linked to the enterprise’s ability to rapidly turninginformation into knowledge. The winners will be extended enterprises with the capability to integrate,optimize, and collaborate across their entire value chain faster, better, and more profitably thananyone else. The winning value-chains will be those that strike a balance between cost andavailability of products and related services in terms of low costs, short product development anddistribution cycles, and smart investments in value-chain business and technology practices. In otherwords, a blend of leanness and agility is expected be a necessity in meeting such contemporarysuccess criteria [11].Value engineering can be implemented in the development of any product, such as a car, to optimizeits value [13]. Some scientists called for what was called leagility or agilean, but what they proposedis to adopt leanness in the upstream of the value chain before the decoupling point and agility in thedownstream of the value chain after the decoupling point [14]. What the HLAMS proposes is amanufacturing system that hybridizes both leanness and agility together in one manufacturingframework to be implemented throughout the value chain [11]. The proposed HLAMS hybridizes thestrategic attributes of both the lean and agile manufacturing systems in order to realize both flexibilityof production equipment, of chaining plants, and of execution of a production order along withresponsiveness to varying customer needs.In the automotive sector, planners have a difficult balancing act. On the one hand, there are benefitsfrom using common vehicle parts. On the other hand, there are more niche demands in the globalmarket. The challenge that faces the entire automotive industry is to balance these two extremes cost-effectively and without compromising quality. This challenge is evident in light of recent and frequentsafety recalls of millions of vehicles in the automotive sector, even from the lean manufacturingpioneer, Toyota [15]. The current research aims to meet this balancing act by proposing animplementation method to implement the strategic facet of the HLAMS. The implementation of thestrategic facet of the HLAMS aims at striking a balance between the main six competitive dimensionsof manufacturing in the automotive sector, which are quality, delivery reliability, response time, lowcost, customization and product life cycle, in addition to revenue [16]. Research questions can now bederived from this literature review.III. RESEARCH QUESTIONS AND HYPOTHESISThe research questions have been derived from the literature review. Answers to some of theseresearch questions are proposed in a form of a research hypothesis.3.1. Research Questions 242 Vol. 5, Issue 1, pp. 241-258
  • 3. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963Based on the research problem definition and research objective, the research questions in thisresearch paper are as follows: 1. Does the implementation of the hybrid lean-agile manufacturing system necessitate change in the enterprise organization? If so, how? 2. Can the implementation of the strategic facet of the hybrid lean-agile manufacturing system be valid?3.2. Research HypothesisThe research hypothesis that is derived from some of the research questions in this research paper isas follows:Ho: The implementation of the strategic facet of the hybrid lean-agile manufacturing system is notcorrelated with the manufacturing enterprises’ manufacturing business success in automotive sector.Ha: The implementation of the strategic facet of the hybrid lean-agile manufacturing system iscorrelated with the manufacturing enterprises’ manufacturing business success in automotive sector.In an endeavor to answer these research questions, let us first take a closer look at risk management inproduct design and manufacturing.IV. RISK MANAGEMENT IN PRODUCT DESIGN AND MANUFACTURINGAutomotive is a huge sector and it is yet expected to become bigger. The World Trade Organization2006 annual report predicted that the world trade in automotive products from 2005 to 2015 willincrease annually by 7 percent, corrected to inflation [17]. Managing risk in the design andmanufacturing processes concerns manufacturing business managers, particularly in the automotivesector. A successful manufacturing enterprise must meet the aggregated value chain metrics thatshould be met throughout the value chain which are lead time, quality, costs, and associated servicewith the product [14]. Quality and the associated services with the product have become prerequisitesto compete in automotive sector. Cost, a lean metric, and lead-time, an agile metric, are the metricsthat manufacturing enterprises compete on with each other in automotive sector. While endeavoringto meet these metrics the manufacturing enterprise may face some uncertainties. Risk exists onlywhen uncertainties exist. There can be some risks associated with realizing the manufacturingcompetitive dimensions through implementing the strategic facet of the proposed HLAMS.The lean dimension in the hybrid lean-agile risk management addresses and cures risk through theelimination of avoidable risk through eliminating the sources of uncertainty and eliminating theimpact of their uncertainty. The agile dimension in the hybrid lean-agile risk management addressesand cures risk through the reduction of unavoidable risk through reducing the impact of theunavoidable sources of uncertainty. Risk can be dealt with through dealing with the level ofuncertainty behind that risk and through dealing with the impact of that particular uncertainty. Souderand Moenart [18] found that there are four sources of uncertainty which are consumers, competitors,technology, and resources. Maull and Tranfield [19] found that the competitive pressures that themanufacturing companies, especially Small and Medium Enterprises (SMEs), are often faced with are(1) rapidly decreasing lead time, (2) increasing choices offered by competitors, (3) pricing, (4) newentries to markets, especially from the New Industrialized Countries (NICs).Tatikonda and Montoya-Weiss [20] proved that technological uncertainty moderates the relationshipbetween organizational process factors and operational outcomes, and market and environmentaluncertainty moderates the relationship between operational outcomes and market success. The mostsignificant risk because of the technological uncertainty is the risk of failed products [21]. This is anavoidable risk that can be avoided by taking the following measures: (1) killing-off products as soonas they fall short of the set target and seem unsuccessful based on marketing and sales early signals;(2) factoring the costs per unit of stock-outs or market-downs into the production planning process.By taking these measures the high technical uncertainty behind this risk will be mitigated throughlittle financial commitment, and consequently little influence of market uncertainty.There are a couple of most significant risks because of market and environmental uncertainty. Thefirst of these couple of risks is the uncertainty in demand predictions and this uncertainty is relateddirectly to the prediction period so that forecast accuracy degrades to ±20% for 2 months futureprediction, to ±50% for 3 months future prediction, and to ±100% for 4 months future prediction [14].This is also an avoidable risk that can be avoided by taking the following measures: (1) not to make 243 Vol. 5, Issue 1, pp. 241-258
  • 4. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963demand prediction for more than three months; (2) factoring multiple demand scenarios intoproduction planning; (3) decisions about the items of the most unpredictable demand should bepostponed until some market signals such as early sales data become available; (4) for seasonalproducts, making the items of predictable demand in advance in order to reserve greatermanufacturing capacity for making the items of unpredictable demand and shift the production ofthose items that their demand is relatively unpredictable closer to the selling season [22]. The secondof these couple of risks due to market and environmental uncertainty is unsatisfied customers. This isalso an avoidable risk that can be avoided by taking the following measures: (1) conducting customersatisfaction survey; (2) conducting Failure Modes and Effects Analysis (FMEA) [23]; (3) actingaccordingly on eliminating the causes behind this dissatisfaction.The unavoidable risks happen because of the existence of the four unavoidable uncertainties that areconsumers, competitors, technology, and resources. The consumer uncertainty is a sort of marketuncertainty that results in the risk of the ever increasing demand for short lead time. In order to reduceboth of the level of this uncertainty and its impact, the following measures should be taken: (1)manufacturing should be carried out in the countries in which the cost of manufacturing per unit soldis the cheapest and which are geographically the closest to the location of the market-places of sellingthe product; (2) machine capacity and type of vehicles to be manufactured, e.g. car, bus, or truck,should be determined based on a global aggregate forecast of demand based on the expected growthin population in the countries that are the market places of selling the product.The competitor uncertainty is another sort of market uncertainty that results in the risks of the demandfor variety of choices, low prices, and new entrants. The following measures should be taken toreduce both the level of this uncertainty and its impact: (1) implement the agile dimension of theHLAMS in order to deal with the risks of the demand for variety of choices and new entrants; (2)implement the lean dimension of the HLAMS in order to deal with the risk of the demand for lowprices.The third unavoidable uncertainty is the technology uncertainty which is a sort of the technologicaluncertainty. This uncertainty can result in the risk of obsolescence and lack of efficiency and can bedealt with by adopting scalable and upgradeable technology. The fourth unavoidable uncertainty is theresources uncertainty which is a sort of the technological uncertainty. This uncertainty can result inthe risk of incomplete tasks and consequently long lead time. The following measures should be takenin order to reduce both the level of this uncertainty and its impact: (1) sharing resources throughoutthe entire value chain so that loading gets leveled; (2) having resources of flexible attribute in itsoperating method and in its construction/architecture so that bottlenecks get resolved.The present research proposes a risk management action plan to minimize risk in the product designand manufacturing processes. The proposed risk management action plan consists of the followingthree phases which are (1) before the beginning of the product design process, (2) during the productdesign process, (3) before the beginning of and during the manufacturing process. 1. Before the beginning of the product design process phase: Conducting Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis for themanufacturing enterprise; Establishing strategic partnership with key suppliers, technology providers, and retailers. 2. During the product design process phase: 2.1. Proving value of design concept to customers at the end of each design phase throughmarket research and close-contact with key customers. 3. Before the beginning of and during the manufacturing process phase: 3.1. Conducting FMEA.Having investigated this, let us now explore the proposed implementation method of the strategicaspects of the proposed HLAMS. V. IMPLEMENTATION OF THE PROPOSED HYBRID LEAN-AGILE MANUFACTURING SYSTEMThe implementation of the strategic facet of the HLAMS consists of a short-term phase and long-termphase. In the short term, the assessment of the current state of the manufacturing system with respectto the HLAMS is implemented, a change plan towards the HLAMS is set, and the Five-S method is 244 Vol. 5, Issue 1, pp. 241-258
  • 5. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963applied throughout the entire value chain. In the long term, the change plan towards the HLAMS iscarried out and the HLAMS should be fully implemented. A proposed implementation plan of theHLAMS is illustrated in Table 1, and is proposed for each of the cases of either a firm has alreadyestablished its manufacturing business or is going to establish its manufacturing business.For the already established manufacturing firm, the change program is four-fold. At the systemengineering level, requirements are reviewed with the marketing team and key customers in order toeliminate those requirements which are unnecessary and costly. In addition, a product design reviewchecklist is developed and reviewed since most costs are assigned when a product is designed andoften design engineers specify what they are familiar with rather than what is most efficient [24].Since a manufacturing strategy refers to an approach that starts with corporate, business, andmarketing strategies and then establishes a designs of manufacturing system to support them [25-26],the following change program is proposed for the manufacturing strategy [27] : (1) gain topmanagement commitment in both time and resources; (2) evaluate the strategic position of thecompany; (3) review in a discussion group the existing primary and secondary requirements of themanufacturing strategy in light of the corporate strategy; (4) brainstorm issues surrounding theserequirements; (5) categorize these issues in terms of people, machine, process, and plan; (6) carry outa cause-and-effect analysis; (7) prioritize the identified causes; (8) set initiatives to address prioritizedissues; (9) form teams of inspired people and implement these initiatives; (10) measure the newprocesses and compare the results against the expected results to spot and make up for anydifferences; (11) analyze the differences to determine their cause; (12) evaluate the strategic positionof the company. For the manufacturing activities improvement, the following change program isproposed [28]: (1) for each manufacturing activity the following questions are asked: 1.1. What isvalue added? 1.2. What activities can be joined? 1.3. What activities can be discarded? 1.4. Whatactivities can be done in parallel? (2) remove the non-value added manufacturing activities; (3) jointthe possibly joined activities; (4) have the activities that can be done in parallel done in parallel if theavailable resources permit. Table 1. Proposed implementation plan of the hybrid lean-agile manufacturing system A firm already has established its manufacturing A firm is going to establish its manufacturing business business 1. Assess the enterprise’s lean capabilities against 1. Set business values and business objectives to the lean capabilities mentioned in the table of realize the hybrid lean-agile manufacturing the leanness assessment, Appendix A [29, 30]; attributes; the lean capabilities are assessed in terms of 2. Establish and build the lean capabilities and agile eleven capabilities that are inventory, team capabilities mentioned in the tables of the lean approach, processes, automation, maintenance, assessment and agile assessment; layout & handling, suppliers, set-ups, quality, 3. Establish and build the hybrid lean-agile retailers, and scheduling & control; manufacturing attributes; 2. Assess the enterprise’s agile capabilities against 4. Prioritize the process implementation initiatives the agile capabilities mentioned in the section of based on their effectiveness according to the the agility assessment, Appendix B [31]; the (80/20) Pareto rule; value chain agility is assessed in terms of goals, 5. Use posters and signs as a way of engaging design, and managerial measurements with employees and maintaining standards [32]; respect to organization, process, technology, and 6. Empower enthusiastic workforce for this people jobs; implementation; 3. Address the emerging points of drawbacks and 7. Motivate neutral workforce for this bridge the gap, if any, through setting a change implementation. management plan towards the hybrid lean-agile 8. Assess the enterprise’s performance; manufacturing attributes mentioned in section 9. Amend the enterprise’s objectives and strategies 8.3., based on incremental change that has the based on the feedback of actual results. following four pillars: a. Revising and changing incrementally the business values and business objectives of the firm to address the points of drawbacks; b. Prioritizing the process improvement initiatives based on their effectiveness according to the 245 Vol. 5, Issue 1, pp. 241-258
  • 6. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 (80/20) Pareto rule; c. Using posters and signs as a way of engaging employees and maintaining standards [32]; d. Empowering enthusiastic workforce for this change; e. Motivating neutral workforce for this change. 4. Assess the enterprise’s performance; 5. Amend the enterprise’s objectives and strategies based on the feedback of actual results.Manufacturing team leaders should be the focus of training efforts since they are the change agents tolead improvements in performance as the implementation of the proposed HLAMS should be pushimplementation by the manufacturing team leaders rather than pull implementation by the teamthemselves. The implementation of the HLAMS necessitates building culture, structure, and systems.Building culture requires the following: (1) culture development requires leadership with a continuouspassion for perfection to create attitudes in all employees so that their behavior positively influencesproduct and service quality; (2) culture development also requires the empowerment of all employeesin the pursuit of quality; (3) team work implies that there is an organized, engaged, and self-disciplined team; (4) it is instilled in all staff that poor quality is a major waste and must be improvedto "near perfect", by continuous improvement with employees who are enabled to solve problemsusing tools such as Five Why’s.Building organizational structure comprises the following: (1) low and high level ownership ofquality; (2) technical and management support to resolve problems; (3) removal of indirect workers,adopting narrow job classifications, and adopting cross training; (4) short feedback loops based on aflat organization structure; (5) mechanisms for continuous improvement with routine daily stand-upteam meetings to flush out problems; (6) managers act as facilitators and provide mentoring.There are two types of quality systems: problem preventive system and problem corrective system.While the problem preventive quality system prevents problems from happening in the first place, theproblem corrective quality system deals with problems only when they arise. The HLAMS adoptshybridization of these two quality systems in terms of (1) instilling flexibility into the design andmanufacturing processes for embracing change; (2) adopting robust design of product using QualityFunction Deployment (QFD) to satisfy customers and stakeholders and using Design for Manufacturein order to provide the manufacturing and transportation processes with what these processes need;(3) adopting robust design of processes using Five S’s and Poka Yoke; (4) adopting systematicprocedures of doing things using ISO and QS standards; (5) detecting problems that can arise as earlyas possible using Statistical Process Control, Management By Walking Around, customer satisfactionsurveys, staff surveys, quality standards audits, Kaizen continuous improvement events, product stripdown, and inspection and testing; (6) analyzing the root causes of those problems and removing thoseroot causes using Pareto analysis, Ishikawa/fishbone diagrams, Five Why’s, value stream mapping,and FMEA. The pragmatic reader might now well ask: “How valid is the strategic facet of theproposed HLAMS?” The next section will answer this question.VI. VERIFICATION AND VALIDATION OF THE IMPLEMENTATION OF THE STRATEGIC FACET OF THE PROPOSED HYBRID LEAN-AGILE MANUFACTURING SYSTEM The implementation of the strategic facet of the proposed HLAMS is verified in this section bytesting the research hypothesis. In an endeavor to verify and validate the implementation of thestrategic facet of proposed HLAMS, product and service managers of three Ground vehiclemanufacturing companies and OEMs were interviewed and their annual reports were reviewed withregards to the strategic facet of the proposed HLAMS. In addition, the annual reports of additionaltwenty seven Ground vehicle manufacturing companies and OEMs were reviewed in this regard.Historically, Taiichi Ohno and Shigeo Shingo developed the Toyota Production System from which 246 Vol. 5, Issue 1, pp. 241-258
  • 7. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963the lean manufacturing principles were derived over a period of 20-30 years [33]. Thus, in anendeavor to double check the relevance of the implementation of the strategic facet of the proposedHLAMS to the real world of the automotive business, the General Motors Production System as anautomotive sector leader, is reviewed in this section as a typical case study on the proposed HLAMS.6.1. Verification of the Implementation of the Strategic Facet of the Proposed HybridLean-Agile Manufacturing SystemThe sources of competitive advantage in automotive sector are: (1) market position; (2) competitiveresources in terms of brand equity, systems, skills, market share, and patents; (3) learningorganization [34-35, 16]. Assuming equal weight of each of these sources of competitive advantage inautomotive sector, the proposed manufacturing system thus can improve on 39% of them since itimproves on systems (6% of the sources of competitive advantages) as well as on learningorganization (33% of the sources of competitive advantages). Therefore, almost one third of thevariation in successfully dealing with the sources of competitive advantage in automotive industry canbe explained by adopting the technical facet of the HLAMS. Therefore, the alternate hypothesis is trueand the implementation of the strategic facet of the HLAMS is positively correlated with firms’manufacturing business success in automotive sector.Causality in this study is determined according to the percentage of variation in manufacturingbusiness success in automotive sector due to a variable (r2) of a correlation coefficient (r). For whetheror not correlation does not necessarily mean causality, the following measure were taken: (1) thepercentage of variation in manufacturing business success due to the variable (r 2) has been calculated;(2) reliability (Cronbachs Alpha) analysis of the data collected has been performed with a result thatsatisfies the minimum acceptable value of Cronbachs Alpha which is 0.7; (3) both sampling designand the sample size are important to establish the representativeness of the sample for limitedgeneralizability; in the sample design, thus, probability sampling design of simple random samplingwas used for its cost-effective and fair statistical results with more than 50% of the ground vehiclemanufacturing companies included in the statistical sample; in addition, those included automotiveOEMs and manufacturing companies hold collectively more than 50% of the global market share inthe automotive market sector; (4) in order to further establish the representativeness of the sample forlimited generalizability, sample size of 30 is adopted since it is the minimum statisticallyrepresentative sample size [36, 37]. This leads us to elaborate on the case studies investigated in thisresearch.6.2. Validation of the Implementation of the Strategic Facet of the Proposed HybridLean-Agile Manufacturing System and Case StudiesThe validity of the research results has been tested in terms of four key validity types; firstly, in termsof statistical conclusion validity, since the resulted relationships are meaningful and reasonable;secondly, in terms of internal validity, since the results are causal rather than being just descriptive;thirdly, in terms of construct validity, since the results represent what is theoreticallyintended; fourthly, in terms of external validity, since the results can be limitedly generalized to thepopulation of automotive manufacturers since the statistical sample was representative. An importantand study-worthy practical example of agility combined with leanness in the global arena is China.China’s biggest threat to world manufacturing is not only low cost but also quick-to-market. Almostevery plant in China boasts that it could design, develop and manufacture products in China fasterthan it could overseas. Sometimes this occurs because the intense competition for the growing internalChinese consumer market forces companies to be more nimble and innovative than their competitors.For instance, due to the booming Chinese auto industry, one-third of all growth in annual global autosales has been almost taking place in China [38]. This is why all of the major auto makers in the worldhave established a manufacturing presence in China, mostly partnered with one of the state-ownedChinese automotive enterprises that have had strong-enough management to survive the transition to amarket economy.A hybrid lean-agile production system should be designed to flow, and automation should be selectedafter deciding how best to improve flow and boost flow [39-40]. In order to compete in the Chinesemarket, which was almost doubled recently, many global automakers, such as the General Motors 247 Vol. 5, Issue 1, pp. 241-258
  • 8. International Journal of Advances in Engineering & Technology, Nov. 2012. ©IJAET ISSN: 2231-1963 Corporation, have established their own China-based design studios and tooling facilities in order to speed up their development of auto products customized to the Chinese consumer’s tastes. Some of these ideas and products can also be used worldwide. This can foster a recent perception that in China nothing is different, but that it happens cost-effectively and five times faster. Such increased speed-to- market could be because cheap technical labor in China can enable enterprises to put more minds at work on a design problem than they could economically justify in dozens of other countries. For instance, in China an automaker is able to employ an army of highly-skilled sculptors who can quickly design and hand-make prototypes for consumer testing, and a legion of highly skilled machinists who can turn the best designs into injection-mold dies within a few months. As a result, such an automaker can go from concept to production in almost 9 months; a period of time short enough to enable such an automaker to have a comparative advantage in automotive sector. Consequently, strategically integrating comparative advantages can be a sustainable competitive advantage for the enterprise in the marketplace. Apparently, being lean only can harm the availability attributes of products and related services to customers. Meanwhile, being agile only can prevent performance on the reasonable cost attribute of products and related services to customers. The Chinese manufacturing approach in this context gives extra credibility to the validity of the proposed HLAMS in striking such a balance effectively. The General Motors Production System, as an automotive sector’s leader, is reviewed as a typical case study of the proposed HLAMS, in order to double check the relevance of the proposed system to the real world of the automotive business. By reviewing The General Motors Production System in light of the leanness assessment table and agility assessment method, Appendix A and Appendix B, respectively, it has been found that General Motors Production System had two shortcomings. The first of these two shortcomings, which is related to leanness, was its deficiency in managing the change towards lean manufacturing. The other shortcoming, which is related to agility, was the lack of strong relationships with suppliers in the General Motors Corporation supply chain. The Corporation has recently recognized these shortcomings and has recently acted to resolve them. In an endeavor to resolve the deficiency in managing change towards lean manufacturing, General Motors Corporation has established in 2003 its first ever lean and flexible plant. This plant is situated in Michigan, USA. Also, the Corporation has recently revisited and reestablished its entire value chain, with great emphasis placed on strong relationships with its suppliers and dealers. For instance, General Motors Corporation has acquired 10% of Mansours Automotive Company share equity, the exclusive distributor of General Motors vehicles in Egypt, in 2001, as a means of moving forward vertical integration in the General Motors value chain. These findings uphold the proposed hybridization of leanness and agility as a way towards sustainable competitiveness in automotive manufacturing business.VII. DISCUSSION AND CONCLUSION The challenge that faces automakers is to strike a balance between the current order-winning criterion of both cost and availability of products and related services without compromising quality. This research has aimed to help automakers to overcome this challenge through proposing a method to implement the manufacturing system that hybridizes the strategic attributes of both the lean and agile manufacturing systems together in one manufacturing framework that meets the three levels of flexibility and responsiveness in automotive sector. The study has identified the sources of uncertainty in product design and manufacturing which are the root causes of risk in product design and manufacturing and has presented a method to deal with them. In addition, the study has proposed a risk management action plan that consists of three phases: (1) before the beginning of the product design process, (2) during the product design process, (3) before the beginning of and during the manufacturing process. The implementation of the strategic facet of the HLAMS is divided into short-term and long-term strategies. In the short term, the assessment of the current state of the manufacturing system with respect to the HLAMS is carried out, a change plan towards the HLAMS is set, and the Five-S method is applied throughout the entire value chain. In the long term, the change plan towards the HLAMS is carried out and the HLAMS should be fully implemented. In order to facilitate the implementation of the strategic facet of the proposed HLAMS, the study has proposed 248 Vol. 5, Issue 1, pp. 241-258
  • 9. International Journal of Advances in Engineering & Technology, Nov. 2012. ©IJAET ISSN: 2231-1963 implementation plan of the proposed manufacturing system for both the enterprises which have already established their manufacturing business and for the enterprises which are going to establish their manufacturing business. The study has suggested assessing the lean capabilities of a manufacturing enterprise in terms of eleven capabilities which are inventory, team approach, processes, automation, maintenance, layout & handling, suppliers, set-ups, quality, retailers, and scheduling & control. The agile aspect of the strategic facet of the proposed manufacturing system consists of delivery reliability and agility assessment. The enterprise’s agile capabilities are suggested to be assessed against the agile capabilities which are organization, process, technology, and people. Each of these four capabilities is assessed based on three aspects: goals, design, and managerial measures. There have been some limitations of this research which are: (1) due to the fierce competition in the automotive market, some information is considered confidential and hence is unavailable; (2) the interviews were conducted using open-ended questions; these interviews were structured and face-to- face interviews since the interviewees preferred to be interviewed with open-ended questions; (3) the scope of the study covers only the automotive sector. The study has shown that implementing the hybridization of the lean and agile manufacturing systems together can be strategically and industrially valid. The study has presented that the implementation of the strategic facet of the HLAMS is correlated with the manufacturing enterprises’ manufacturing business success in automotive sector. It has been found that almost one third of the variation in the manufacturing business success can be explained by adopting the HLAMS. The cost demanded by the implementation of the HLAMS can be moderated by the following benefits: (1) reduced operational cost; (2) reduced time to market.VIII. FUTURE RESEARCH The HLAMS presented in this study exhibits further research. The future research proposed in the present study includes: (1) conducting industrial experiments for further validating the implementation of the strategic facet of the HLAMS, (2) reviewing further relevant industrial case studies for further validation. ACKNOWLEDGEMENT Professor Arthur Sybrandy from Maastricht School of Management, The Netherlands, is acknowledged for his insightful contribution to this research work. The people of Maastricht School of Management, The Netherlands, and the people of The Regional IT Institute, Egypt, are acknowledged for their support for accomplishing this research. REFERENCES [1]. Womack, J., Jones, D., Roos, D., (1990) The machine that changed the world, Macmillan , New York. [2]. Womack, J.P., Jones, D.T., (1996) Lean thinking, Simon and Schuster, NY. [3]. Davis, E., (April 1995) “What is on American minds?” Management Review, pp. 14-20. [4]. Davis, T., (July 1993) “Effective supply chain management,” Sloan Management Review. [5]. Harber, J.E., (2005) “Building an auto company on common,” Manufacturing Engineering, Society of Manufacturing Engineers, vol. 135, no. 3. [6]. Czinkota, M.R., Ronkainen, I.A., Moffett, M.H., (2004) Fundamentals of international business, South- Western: a division of Thomson Learning, Inc. [7]. Brooke, L., (May 2008) “Creating a global footprint,” Automotive Engineering, pp. 48-49. [8]. Daniels, J.D., Radebaugh, L.H., Sullivan, D.P., International business environments and operations, Pearson Prentice Hall, 2004. [9]. Byrd, J.B., (2008) “Manufacturings next great leap,” Manufacturing Engineering, Society of Manufacturing Engineers, vol. 141, no. 2. [10]. Hansen, R. C., (2005) Overall equipment effectiveness (OEE), Industrial Press. [11]. Elmoselhy, S.A.M., (September 2007) Hybrid lean-agile manufacturing business model in the automotive sector, MBA thesis, Maastricht School of Management, The Netherlands. [12]. Deming, W.E., (2000) The new economics for industry, government, education, The MIT Press. [13]. Annappa, C.M., Panditrao, K.S., (2012) “Application of value engineering for cost reduction – a case study of universal testing machine,” International Journal of Advances in Engineering & Technology, vol. 4, no. 1, 249 Vol. 5, Issue 1, pp. 241-258
  • 10. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 pp. 618-629.[14]. Naylor, J.B., Naim, M.M., Berry, D., (1999) “Leagility: integrating the lean and agile manufacturing paradigms in the total supply chain,” International Journal of Production Economics, vol. 62, pp. 107-118.[15]. Toyota Motor Corporation Head Office, (2006) Toyota corporation annual report 2005, Toyota Motor Corporation Head Office, Aichi, Japan.[16]. Kotha, S., (1995) “Mass customization: implementing the emerging paradigm for competitive advantage,” Strategic Management Journal, vol. 16, pp. 21-42.[17]. World Trade Organization, (2007) International trade statistics annual report 2006, World Trade Organization.[18]. Souder, W.E., Moenart, K.R., (1992) “Integrating marketing and R&D projects: An information uncertainty model,” Journal of Management Studies, vol. 29, no. 4, pp. 485-512.[19]. Maul, R., Tranfield, D., (1992) “Methodological approaches to the regeneration of competitiveness in manufacturing,” 3rd International Conference on Factory 2000, IEE, UK, pp. 12-17.[20]. Tatikonda, M.V., Montoya-Weiss, M.M., (2001) “Integrating operations and marketing perspectives of product innovation: the influence of organizational process factors and capabilities on development performance,” Management Science, vol. 47, no. 1, pp. 151-172.[21]. Baxter, M.R., (1995) Product design: practical methods for the systematic development of new products, Chapman and Hall.[22]. Fisher, M.L., Hammond, J.H., (May-June 1994) “Making supply meet demand,” Harvard Business Review.[23]. Aravinth, P., Muthu Kumar, T., Dakshinamoorthy, A., Arun Kumar, N., (2012) “A criticality study by design failure mode and effect analysis (FMEA) procedure in LINCOLN V350 PRO welding machine,” International Journal of Advances in Engineering & Technology, vol. 4, no. 1, pp. 611-617.[24]. Taguchi, G., Chowdhury, S., Taguchi, S., (2000) Robust engineering, McGraw-Hill Professional.[25]. Wheelen, T.L., Hunger, J.D., (2002) Strategic management and business policy, Pearson Education International.[26]. Stevenson, W.J., (2002) Operations management, McGraw-Hill.[27]. Brassard, M., (1989) The memory jogger plus+ featuring the seven management and planning tools, Goal/QPC, Methuen, MA.[28]. Hayes, R.H., Pisano, G.P., (January 1994) “Beyond world-class: the new manufacturing strategy,” Harvard Business Review.[29]. Wrennall, W., Lee, Q., (1994) Handbook of commercial and industrial facilities management, McGraw Hill.[30]. Epely, T., Lee, Q., (2007) Value stream and process mapping: the Strategos guide to, Enna Inc.[31]. Bolstorff, P., Rosenbaum, R., (2003) Supply chain excellence: a handbook for dramatic improvement using the SCOR model, Amacom.[32]. Imai, M., (1997) Gemba kaizen: a commonsense low-cost approach to management, McGraw-Hill Professional, New York.[33]. Dennis, P., Shook, J., (2002) “Lean production simplified: a plain-language guide to the worlds most powerful production system,” Journal of Manufacturing Systems, vol. 21, no. 4.[34]. Sharifi, H., Zhang, Z., (1999) “A methodology for achieving agility in manufacturing organizations: An introduction,” International Journal of Production Economics, vol. 62, pp. 7-22.[35]. Skinner, W., (1978) Manufacturing in the corporate strategy, John Wiley & Sons, New York.[36]. Alder, H.L., Roessler, E.B., (1962) Introduction to probability and statistics, W.H. Freeman and Company.[37]. Wackerly, D.D., Mendenhall, W., Scheaffer, R.L., (1996) Mathematical statistics with applications, Duxbury Press.[38]. Cooney, S., (March 2006) China’s impact on the U.S. automotive industry, Federal Reserve Bank of Chicago.[39]. Harris, R., Harris, C., (2008) “Can automation be a lean tool?” Manufacturing Engineering, Society of Manufacturing Engineers, vol. 141, no. 2.[40]. Morey, B., (2008) “Automating lean tools,” Manufacturing Engineering, Society of Manufacturing Engineers, vol. 141, no. 1.APPENDIX A Leanness Assessment Tool 1.0 Inventory Response X For the categories of Finished Goods, Work- 0%-20% In-Process (WIP) and Purchased/Raw 21%-40% 1.1 Materials, what portion of middle and upper 41%-60% managers can state from memory the current 61%-80% 250 Vol. 5, Issue 1, pp. 241-258
  • 11. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 turnover and the purpose of each type? 81%-100% 0-3 What is the overall inventory turnover, 4-7 1.2 including Finished Goods, WIP and 8-12 Purchased/Raw material? 13-24 25+ <=1.0 1.1-2.0 What is the ratio of Inventory Turnover to the 1.3 2.1-4.0 industry average? 4.1-8.0 8.1+ 2.0 Team Approach Response X Exploitive Bureaucratic 2.1 What is the organization type? Consultative Participative Highly Participative Individual Incentive Hourly Wage How are workers on the factory floor 2.2 Group Incentive compensated? Salary Salary +Annual Bonus Layoffs Every Year 2.3 To what extent do people have job security? Transfers & Retraining Reduce Layoffs Layoffs Are Rare 31%+ 14%-30% 2.4 What is the annual personnel turnover 7%-11% 3%-6% 0%-2% <5% 6%-10% What percentage of personnel has received at 2.5 11%-30% least eight hours of teambuilding training? 31%-90% 91%-100% <5% What percentage of personnel are active 6%-10% 2.6 members of formal work teams, quality 11%-30% teams, or problem-solving teams? 31%-90% 91%-100% 3.0 Processes Response X 9+ How many large-scale machines or single- 7-8 3.1 process areas are in the plant through which 5-6 50% or more of different products must pass? 3-4 0-2 Large Scale How would you rate the overall scale of the 3.2 Medium/Mixed plants processes? Small Scale How easy is it to shift output when the Very Difficult 3.3 product mix changes? Moderately Difficult 251 Vol. 5, Issue 1, pp. 241-258
  • 12. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 Easy Very Difficult How easy is it to alter the total production 3.4 Moderately Difficult rate by +/-15%? Easy 96%-100% What is managements target operating 91%-95% 3.5 capacity for individual departments or 86%-90% machines? 76%-85% 50%-75% Complex Technologies How would you rate the overall technology 3.6 Moderate/Mixed level of the plants processes? Simple Technologies 4.0 Automation Response X Nothing Cycle What must be automated to meet customer 4.1 Cycle and Unload demand? (e.g. Load, Cycle, Unload, Transfer) Load, Cycle, and Unload Load, Cycle, Unload, and Transfer 1-2 3-4 How many functions the machine has to 5-6 4.2 perform? 7-8 9-10 10+ The automation has to be in one machine Does the automation have to be in one 4.3 machine or can it be spread over multiple The automation can be spread over multiple machines? machines 5.0 Maintenance Response X Describe equipment records and data. Include Non-Existent 5.1 records of uptime, repair history, and spare Substantially Complete parts. Include repair and parts manuals. Complete & Accurate 71%-90% Excluding new installations and construction 51%-70% projects, what percentage of maintenance 5.2 26%-50% hours is unplanned, unexpected, or emergency? 11%-25% 0%-10% No Preventive Maintenance 1%-10% Coverage Does maintenance have and follow a defined 5.3 11%-30% Coverage preventive schedule? 31%-90% Coverage 91%+ Coverage Often Do equipment breakdowns limit or interrupt 5.4 Occasionally production? Frequently 5.5 What is the overall average availability of Unknown 252 Vol. 5, Issue 1, pp. 241-258
  • 13. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 plant equipment? 0%-75% 76%-90% 91%-95% 96%-100% 6.0 Layout & Handling Response X 71%-100% 46%70% What portion of total space is used for storage 6.1 30%-45% and material handling? 16%-30% 0%-15% 71%-100% 46%70% What portion of the plant space is organized 6.2 30%-45% by function or process layout? 16%-30% 0%-15% Pallet-size (or larger) loads, long distances (>100),complex flow patterns, confusion, & lost material How would you characterize material 6.3 Moderate loads, bus-route transport, & movement? intermediate distances Small loads, short distances (<25), simple & direct flow pattern Messy, Filthy, Confused How would you rate overall housekeeping 6.4 Some dirt, Occasional Mess and appearance of the plant? Spotless , Neat, & Tidy Impossible to see any logic or flow sequence. Most processes are apparent with some study. Most sequences are visible. Processes and their sequences are immediately How well could a stranger walking through visible. 6.5 your plant identify the processes and their sequence? 7.0 Suppliers Response X 5.1+ 4.1-5.0 What is the average number of suppliers for 7.1 3.1-4.0 each raw material or purchased item? 2.1-3.0 1.0-2.0 1-5 6-10 On average, how often are items put up for re- 7.2 11-15 sourcing? 16-20 21+ 0%-20% What portion of raw material & purchased 21%-40% 7.3 parts comes from qualified suppliers? 41%-60% 61%-80% 253 Vol. 5, Issue 1, pp. 241-258
  • 14. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 81%-100% 0%-20% What portion of raw material and purchased 21%-40% 7.4 items is delivered directly to the point of use 41%-60% without incoming inspection or storage? 61%-80% 81%-100% 0%-20% 21%-40% What portion of raw materials and purchased 7.5 41%-60% parts is delivered more than once per week? 61%-80% 81%-100% 8.0 Setups Response X 61+ 29-60 What is the average overall setup time (in 8.1 16-30 minutes) for major equipment? 10-15 0-9 0% 1%-15% What portion of machine operators have had 8.2 16%-30% formal training in Rapid Setup techniques? 31%-45% 46%-100% Not at All To what extent are workers measured and Informal Tracking & Review 8.3 judged on setup performance? Setups Performance Tracked 9.0 Quality Response X 0% 1%-10% What portion of total employees has had basic 9.1 11%-30% Statistical Process Control (SPC) training? 31%-70% 71%-100% 0% 1%-10% What portion of operations is controlled by 9.2 11%-30% Statistical Process Control (SPC)? 31%-70% 71%-100% 0% What portion of the SPC that is done is 1%-10% 9.3 accomplished by operators rather than Quality 11%-30% or Engineering specialists? 31%-70% 71%-100% 0% 1%-10% 9.4 What is the overall defect rate? 11%-30% 31%-70% 71%-100% 254 Vol. 5, Issue 1, pp. 241-258
  • 15. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963 10.0 Retailers Response X 1-5 6-10 What is the average number of retailers for 10.1 11-15 each product category? 16-20 21+ 1-5 6-10 10.2 What is the number of products categories? 11-15 16-20 21+ 0%-20% 21%-40% 10.3 What is the percentage of qualified retailers? 41%-60% 61%-80% 81%-100% Fragile Moderate 10.4 How strong is the relationship with retailers? Above-Moderate Strong Very Strong 11.0 Scheduling/Control Response X 0% What portion of work-in-process flows 1%-10% 11.1 directly from one operation to the next 11%-30% without intermediate storage? 31%-70% 71%-100% 0% 1%-10% What portion of work-in-process is under Pull 11.2 11%-30% Kanban control? 31%-70% 71%-100% 0%-50% 51%-70% 11.3 What is the on-time delivery performance? 71%-80% 81%-95% 95%-100%APPENDIX B Value Chain Agility Assessment ToolFor all the questions in the following four assessment sections of organization, process, technology,and people, the following rubric should be used: 2 Yes – 1 Partially – 0 Unsure or No. The higher thescore your enterprise gets, the better it is on the value chain agility scale.1. Organization1.1. Organization Goals:The organization goals are the facet of value chain strategy that prioritizes organizational performancerequirements of delivery reliability, responsiveness, and flexibility with the internal needs of costreduction, profitability and asset utilization.1.1.1. Have you defined your value chains in terms of products and customers?1.1.2. Are your senior managers measured and remunerated on a set of value chain measures?1.1.3. Do you know where your value chain performance rates against competition? 255 Vol. 5, Issue 1, pp. 241-258
  • 16. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-19631.1.4. Have you prioritized your competitive requirements in light of the comparison with thecompeting value chains?1.1.5. Are your performance goals aligned with your suppliers, retailers, and customers’ contracts?1.1.6. Are your performance goals aligned with your suppliers and retailers’ goals?1.2. Organization Design:The organization design is the facet of value chain strategy that has to do with mapping the mostefficient and effective value stream. It attempts to balance centralization versus decentralization,globalization versus regionalization, and process versus functional focus.1.2.1. Does your organization structure address the centralization, globalization, and functionalaspects?1.2.2. Are all relevant functions in place?1.2.3. Are all the functions necessary?1.2.4. Is the current flow of inputs and outputs between functions the optimum flow?1.2.5. Does your organization structure support your suppliers and retailers’ organization structure?1.3. Organization Managerial Measures:The organization managerial measures are the facet of value chain strategy that defines your overallvalue chain metric scheme including definition, data collection, data segmentation, reporting, anddefect analysis.1.3.1. Are you regularly measuring and managing metrics for delivery reliability, responsiveness, andflexibility?1.3.2. Are you regularly measuring and managing metrics for value chain cost reduction and assetutilization?1.3.3. Are you regularly measuring and managing shareholder metrics for profitability and return?1.3.4. Do you have the data analytics capability to support analyzing value chain performance data?1.3.5. Are your scorecard and metric definition aligned with your suppliers and customers’ metricsand contractual requirements?1.3.6. How responsive is the enterprise to changes in its business environment?1.3.7. How able is the enterprise to make use of unpredicted opportunities in the marketplace?2. Process2.1. Process Goals:The process goals are the facet of value chain strategy that cascades organization goals to your valuechain network and processes. The value chain network refers to the physical movement of goods fromyour suppliers’ suppliers to your company to ultimately your customers’ customer. The value chainprocess refers to the plan, outsource, make, and deliver processes. Factors considered in settingnetwork goals include service level, order fulfillment cycle time, flexibility, Cost of Goods Sold(COGS), and inventory turnover. Factors considered in setting process goals include transactionalproductivity for sales orders, purchase orders, work orders, and forecasts.2.1.1. Do your organizational goals cascade to network goals for service level, order fulfillment cycletime, flexibility, COGS, and inventory turnover?2.1.2. Do your organizational goals cascade to transactional productivity goals for sales orders,purchase orders, work orders, and forecasts?2.1.3. Have you segmented your network and transactional “cost to serve” for each of your suppliers?2.1.4. Are your middle managers measured and remunerated on a network and transactionalproductivity measures?2.1.5. Are your network and transactional productivity goals aligned with your suppliers and retailers’goals and contractual obligations?2.2. Process Design: 256 Vol. 5, Issue 1, pp. 241-258
  • 17. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-1963The process design is the facet of value chain strategy that has to do with defining your material flow,work flow, and information flow using the assemble-to-order strategy. Process design factors includegeographic location of each supplier, industry best practice assessment, and transactional analysis.2.2.1. Do you have an integrated plan, outsource, make, and deliver processes?2.2.2. Have you designed or reviewed your material flow network in the past three years?2.2.3. Does each of your business units adopt the assemble-to-order strategy?2.2.4. Have your supply chain processes incorporated the industry best practices?2.2.5. Are your processes aligned with customer requirements and supplier capability?2.3. Process Managerial Measures:The process managerial measures are the facet of value chain strategy that defines your site,functional area, and process metric scheme including definition, data collection, data segmentation,reporting, and defect analysis. It cascades from the organization measures.2.3.1. Are you regularly measuring and managing site and function metrics for delivery reliability,planned lead-time, and flexibility?2.3.2. Are you regularly measuring and managing site or function metrics for supply chain cost, i.e.order management cost, raw material and goods delivery cost, inventory carrying cost, informationtechnology cost, and planning cost?2.3.3. Are you regularly measuring and managing transactional productivity, i.e. process efficiencyand transactional yield, for purchase orders, work orders, and sales orders?2.3.4. Do you have site or functional area data analytics capability to support analyzing value chainperformance data?2.3.5. Does your organization scorecard and metric definition cascade to your site and functionalareas?2.3.6. Are your site and functional area metrics aligned with your suppliers and retailers’ goals andcontractual requirements?3. Technology3.1. Technology goals:The technology goals are the facet of value chain strategy that defines value chain systemrequirements to enable planning and execution of your value chain processes. The factors involved indefining technology requirements include process flows and definitions, transactional productivitytargets, data warehouse and archiving needs, master data requirements, and system architectureconstraints.3.1.1. Do you have appropriate technology, i.e. functionality, which supports how you plan,outsource, make, and deliver?3.1.2. Did you define your To Be processes based on striking a balance between system functionalityand industry best practice?3.1.3. Do you have goals set for master data integrity?3.1.4. Are your technology managers measured and promoted on transactional productivity measures?3.1.5. Do you have a collaboration technology plan with suppliers and retailers?3.2. Technology Design:The technology design is the facet of value chain strategy that has to do with defining yourtechnological architecture and requirements. Also, it has to do with setting specific configurations foryour business based on your process flows defined above.3.2.1. Did you configure your system based on a To Be process Blue Print?3.2.2. Are you using all of the functionality that you bought?3.2.3. Have you realized all the technological benefits that were aimed to be realized?3.2.4. Do you have appropriate data warehouse and analytical tools to support value chain analysis?3.2.5. Did you implement your system with less than 10 software code customizations? 257 Vol. 5, Issue 1, pp. 241-258
  • 18. International Journal of Advances in Engineering & Technology, Nov. 2012.©IJAET ISSN: 2231-19633.3. Technology Managerial Measures:The technology managerial measures are the facet of value chain strategy that defines your technologyperformance metric scheme including definition, data collection, data segmentation, reporting, anddefect analysis. It cascades from the process measures.3.3.1. Have appropriate technology sub-goals been set?3.3.2. Is your technology performance assessed?3.3.3. Are sufficient resources allocated to support effective use of technology?3.3.4. Are the interfaces between technologies being managed?3.3.5. Is your technology performance metrics aligned with your suppliers and retailers’ performance metrics and contractual requirements, i.e. outward facing Enterprise Resource Planning (ERP) based on Private Trading Exchange (PTX) performance?4. People4.1. People – Job Goals:The job goals are the facet of value chain strategy that defines the type of job requirements and goalsnecessary to execute value chain processes and to manage value chain technology.4.1.1. Have appropriate job sub goals been set linked to the plan, outsource, make, and deliverprocesses?4.1.2. Are job goals cascaded from the organization and process levels?4.2. Job Design and People:The job design is the facet of value chain strategy that defines the type of job requirements and goalsnecessary to execute value chain processes and to manage technology.4.2.1. Are sufficient resources allocated to support effective use of technology?4.2.2. Are the interfaces between technologies being managed?4.2.3. Are the plan, outsource, make, and deliver processes requirements reflected in the relevantjobs?4.2.4. Are job steps in a logical sequence?4.2.5. Have supportive policies and procedures been developed?4.2.6. Is the job environment enabling?4.3. People – Job Managerial Measures:The job managerial measures are the facet of value chain strategy that defines metrics to measurewhether people performance and job requirements and goals meet the goals of executing the valuechain processes and of managing technology.4.3.1. Do the performers understand the job goals and standards they are expected to meet?4.3.2. Do the performers have sufficient resources, clear signals and priorities, and logical job design?4.3.3. Are the performers rewarded for achieving job goals?4.3.4. Do the performers know if they are meeting job goals?4.3.5. Do the performers have the necessary knowledge, skill, and physical capability to achieve thejob goals?AUTHOR’S BIOGRAPHYSalah A.M. Elmoselhy holds MS in mechanical design and production engineering that hereceived from Cairo University. He holds as well MBA in international manufacturing businessthat he received from Maastricht School of Management (MSM). He has ten years of industrialexperience in CAD/CAM and robotised manufacturing systems. He has been recently aresearcher at the Engineering Department and Fitzwilliam College of Cambridge Universityfrom which he received a Diploma of postgraduate studies in engineering design. He iscurrently a PhD Candidate in mechanical engineering working with the International IslamicUniversity Malaysia (IIUM) and the Center for Sustainable Mobility at Virginia PolytechnicInstitute and State University (Virginia Tech). 258 Vol. 5, Issue 1, pp. 241-258