Using Product-Mix Flexibility to Implement a Make-To-Order Assembly Line

Using Product-Mix Flexibility to Implement a Make-To-Order Assembly Line
James R. Bradley, The Johnson School, Cornell University A. P. Blossom, Kyvia Inc.

The era of mass production was ushered in by the assembly line, which is traditionally managed with the goals of minimizing cost and attaining high labor efficiency. Seeking high levels of efficiency, however, renders the assembly line inflexible to producing a fluctuating product mix, and incapable of supporting popular strategies such as quickly manufacturing and delivering products on a make-to-order basis. We propose a method to increase product mix flexibility on the assembly line so that the current demands of the marketplace can be satisfied. We describe the tradeoff among capacity, lead time, product complexity, and percentage of made-to-order production, which yields a methodology for determining an appropriate combination of buffer capacity, schedule length, and lead time. Additionally, we find that the cost of make-to-order production is small when buffer capacity is added strategically.