IOM Flashcards
What is the difference between risk and uncertainty?
Risk
Present when managers know the possible outcomes of a particular course of action and can assign probabilities to them
Uncertainty
The future is unknown, and probabilities cannot be given for outcomes
What is the expected utility theory?
- Actual decisions made depend on the willingness to accept risk
- Expected utility theory allows for different attitudes towards risk-taking in decision making
- Managers are assumed to derive utility from earning profits
- Managers make risky decisions in a way that maximises expected utility of the profit outcomes
- Utility function measures utility associated with a particular level of profit
- Index to measure level of utility received for a given amount of earned profit
- Managers attitude toward risk
- Determined by the manager’s marginal utility of profit
- Marginal utility (slope of utility curve) determines attitude towards risk
How can you tell if someone is risk averse from the utility curve?
You are risk averse with respect to a gamble if you prefer the expected value of the gamble with certainty to the gamble itself.
You are risk averse if the expected value is greater than the certainty equivalent.
Explain the flaws in the utility model by comparing it with the prospect model
Explain how to carry out project planning and control
Project planning and control
Stage 1: Understand the project environment
- Geo-social environment
- Geography and national culture
- Econo-political environment
- Economy and government
- Business environment
- Customers, competitors and suppliers
- Internal environment
- Company strategy, resources and other projects
Stage 2: Project definition
- Aim, strategy and scope
Stage 3: Project planning
- Objectives: what is the goal and estimate of cost/ time
- Project scope: how to approach, feasibility, major tasks
- Contract requirements: reporting and performance, responsibilities
- Schedules: activities, tasks, timelines, milestones
- Resources: budget and budget control
- Personnel
- Control: monitoring and evaluating progress and performance
- Risk analysis
- Identify activities
- Estimate the times and resources for activities
- Identify relationship and dependencies between activities
- Identify time and resource schedule constraints
- Fix the schedule for time and resources
Stage 4: Technical execution
Stage 5: Project control
- Earned value analysis
- Probabilistic analysis: program evaluation and review technique
- Most likely time (m), optimistic time (a), pessimistic time (b)
- Mean = a + 4m + b / 6
- Variance = (b – a / 6) ^2
- Use expected times to identify critical path, and compute slack and project time
- Total project variance = Sum of variance of critical path activities
- Project variance is a measure of the risk involved in the project
- Crashing project networks
- Process of reducing time spans on activities so that the project is completed in less time.
- Focus must be on critical path activities
- In order to decide which activity to crash, the ‘crash cost slope’ of each is calculated (crash cost per time period).
- Crash the activity on the critical path which has the lowest crash cost slope.
Explain the components of a simple queuing system. Give examples
The calling population
- The population which customers/jobs originate
- The size can be finite or infinite (the latter is most common)
- Can be homogeneous (only one type of customer/job) or heterogeneous
The arrival process
- Determines how, when and where customer/jobs arrive to system
- The important characteristic is the customers/jobs inter arrival times
- Correct specification of the arrival process requires data collection of interarrival times and statistical analysis
The queue configuration
- Specifies the number of queues
- Their location
- Effect on customer behaviour (balking or reneging)
- The max size the queue can hold (infinite/finite capacity)
Service mechanism
- Can involve one or several service facilities with one or several parallel service channelsThe service provided by a server is characterised by its service time
- Typically involves data gathering and statistical analysis
- Most analytical queuing models are based on the assumption of exponentially distributed service times
The queue discipline
- Specifies the order by which jobs in the queue are served
- Most common principle is FIFO
- Other rules are: LIFO, SPIT, EDD
- Can entail prioritisation based on customer type
Examples of world queuing systems:
Commercial queuing systems
- Commercial organisations serving external customers
- E.g. dentist, bank, ATM, petrol stations, plumber, garage …
Transportation service systems
- Vehicles are customers or servers
- E.g. vehicles waiting at toll stations and traffic lights, trucks or ships waiting to be loaded, taxi cabs, fire engines, lifts and buses
Business – internal service systems
- Customers receiving service are internal to the organisation providing the service
- E.g. inspection stations, conveyor belts, computer support …
Social service systems
- E.g. ER at a hospital, waiting lists for organ transplants, waiting lists for primary school places
What are the advantages of multiple line queues vs single line queues
Multiple line vs single
Multiple:
- Service provided can be differentiated
- Labour specialisation possible
- Customer has more flexibility
- Balking behaviour may be deterred: several medium length queues are less intimidating
Single
- Guarantees fairness
- No customer anxiety regarding choice of queue
- Most efficient set up for minimising time in the queue
- Jockeying (queue switching) is avoided
Explain the importance of variability in queuing
If there were no variability, there would be no need for queues to occur
Statistically, the usual measure for indicating the spread of a distribution is its standard deviation sigma.
However, variation does not only depend on standard deviation.
To normalise standard deviation, it is divided by the mean of its distribution. The measure it called the variation of the distribution.
Describe the different between steady and transient state
Steady state condition
- Enough time has passed for the system state to be independent of the initial state as well as the elapsed time
- The probability distribution of the state of the system remains the same over time (is stationary).
Transient condition
- Prevalent when a queuing system has recently begun operations
- The state of the system is greatly affected by the initial state and by the time elapsed since operations startedas
Explain Little’s Law
What is the probability that there is n jobs in the system in a queue in the M/M/1 model.
In the M/M/1 model what is:
Expected number of customers in the system
Expected time a job spends in the system
Expected number of customers in queue
Expected time a job spends in the queue
What are the different shortage costs in queuing and how do you analyse design costs trade offs?
- External customers arrive to the system
- Profit organizations
- The shortage cost is primarily related to lost revenues “Bad Will”
- Non profit
- The shortage cost is related to a societal cost
- Internal customers arrive to the system
* The shortage cost is related to productivity loss and associated profit loss
Usually it is easier to estimate the shortage costs in situation 2 than in situation 1.
What is Operations Research? Give examples of the different types
OR professionals aim to provide a rational basis for decision making by seeking to understand and structure complex situations and to use this understanding to predict system behaviour and improve system performance.
Done using analytic and numeric techniques to develop and manipulate models of organisational systems.
Types of OR models
- Linear programming: objective function and constraints are all linear functions of the decision variables
- Network flow programming: special case of linear program where situation can be modelled as a network
- Integer programming: variables are required to take integer values
- Non-linear
- Dynamic programming: process described in terms of states, decisions, transitions and returns. Problem is to find sequence that maximises total return.
- Stochastic programming: Uses random variables for some aspects of the problem. Expression can be written for the expected value of the objective.
What is the common terminology for linear programming?
What are the assumptions in linear programming?
- Proportionality
- contribution of each activity Xj to the value of the objective function Z is proportional to the level of the activity Xj as represented by the CjXj term in the objective function. Similarly, the contribution of each activity to the left-hand side of each functional constraint is proportional to the level of the activity Xj, as represented by the AijXj term in the constraint.
- Additivity
- Every function in a linear programming model (whether the objective function or the function on the left-hand side of a functional constraint) is the sum of the individual contributions of the respective activities.
- Divisibility
- Decision variables in a linear programming model are allowed to take any values, including non-integer values, that satisfy the functional and non-negativity constraints.
- Since each decision variable represents the level of some activity, it is assumed that the activities can be run at fractional levels.
- Certainty
- The value assigned to each parameter of a linear programming model is assumed to be a known constant.
Describe the algorithm for shortest path problem
Objective of the nth iteration:
- Find the nth nearest node to the origin
Input to the nth iteration:
- n-1 nearest nodes to the origin, including their shortest path and distance from the origin. (These nodes, plus the origin, will be called solved nodes)
Candidates for the nth nearest node:
- Each solved node that is directly connected by a link to one or more unsolved nodes provides one candidate – the unsolved node with the shortest connecting link to this solved node. (Ties provide additional candidates).
Calculation of the nth nearest node
- For each such solved node and its candidate, add the distance between them and the distance of the shortest path from the origin to this solved node. The candidate with the smallest such total distance is the nth nearest node (ties provide additional solved nodes), and its shortest path is the one generating this distance.
Applications
- Minimising the distance travelled
- Minimising the total cost of a sequence of activities
- Minimising the total time of a sequence of activities
Describe the mimimum spanning tree algorithm and its applications in the real world
Algorithm to solve the MST problem
- Select any node arbitrarily, and then connect it to the nearest distinct node
- Identify the unconnected node that is closest to a connected node, and the connect these two nodes. Repeat this step until all nodes have been connected.
- Tie breaking: Ties for the nearest distinct node (step 1) or the closest unconnected node (step 2) may be broken arbitrarily, and the algorithm must still yield an optimal solution. However, such ties are a signal that there may be (but need not be) multiple optimal solutions. All such optimal solutions can be identified by pursuing all ways of breaking ties to their conclusion.
Applications of the MST problem
- Design of telecommunication networks
- Design of a lightly used transportation network to minimise the total cost of providing the links
- Design of a network of high voltage electrical power transmission lines
- Design of a network of wiring on electrical equipment
- Design of a network of pipelines to connect a number of locations
Explain the augmenting path algorithm
An augmenting path is a directed path from the source to the sink in the residual network such that every arc on this path has strictly positive residual capacity. The minimum of these residual capacities is called the residual capacity of the augmenting path because it represents the amount of flow that can feasibly be added to the entire path.
- Identify an augmenting path by finding some directed path from source to sink in the residual network such that every arc on this path has strictly positive residual capacity. (if no augmenting path exists, the net flows already assigned constitute an optimal flow pattern)
- Identify the residual capacity c* of this augmenting path by finding the minimum of the residual capacities of the arcs on this path. Increase the flow in this path by c*.
- Decrease by c* the residual capacity of each arc on this augmenting path. Increase by c* the residual capacity of each arc in the opposite direction on this augmenting path. Return to step 1.
Some applications of the maximum flow problem
- Maximise the flow through a company’s distribution network from its factory to its customers
- Maximise the flow through a company’s supply network from its vendors to its factories
- Maximise the flow of oil through a system of pipelines
- Maximise the flow of water through a system of aqueducts
- Maximise the flow of vehicles through a transportation network
Explain the max-flow min-cut theorem
Max-flow min-cut theorem
The theorem states that, for any network with a single source and sink, the maximum feasible flow from the source to the sink equals the minimum cut value over all cuts of the network.
Equivalently, optimality has been attained whenever there exists a cut in the residual network whose value is zero.
What are the examples of some logical constraints?
What is a supply network?
Supply Network: A set of connected but geographically dispersed firms involved in making and delivery of product/service to end customers
What are the different supply network decisions?
Strategic
- investment in plants: numbers, locations
- introduction of new products: BOMs used
- manufacturing technology
- creation of logistics network
- make vs buy, supplier selection
Tactical
- manufacturing system
- inventory policy
- procurement policy
- IT system and information flow
- customer strategies, demand planning, forecasting
Scheduling of resources (labour, machine, vehicles)
Routing of raw materials and finished products
Solicitations of bids/quotations, order processing
What is procurement, explain the difference between direct and indirect procurement
Means purchasing inputs used in the firm’s value chain
- Raw material
- Supplies
- Consumable items
- Assets such as machinery, lab equipment, office equipment, buildings
Direct purchasing: buying for primary activities
Indirect purchasing: providing supplies and services for support activities
What are the different procurement strategies?
Performance based partnership
- High dependence on one supplier
- Used for strategic products
Competitive bidding
- In general, no long-term supply contract, rather multiple sourcing
- Used for interchangeable products
Securing continuity of supply
- Securing supply of bottleneck products, if necessary, at additional cost
- Reducing dependence on supplier by developing alternative products and looking for alternative suppliers
Category management and e-procurement solutions
- MRO (maintenance, repair, operating supplies) products require a purchasing strategy which is aimed at reducing administrative and logistic complexity
- Electronic catalogues
- Article catalogue (standardisation of product assortment)
Plot purchasing’s impact on financial results vs supply risk
How do you choose a sourcing strategy?
Single vs. multiple sourcing
- Assessment with regards to dependence, supply risk and transaction costs
Global vs. local sourcing
- Local sourcing preferred when product is a high-tech product for which specification often changes; high flexibility and precision required in terms of delivery
Partnership or competitive relationship
- Competitive relationship mostly used when commodities are purchased, when the products are purchased in in large volumes and when many suppliers are available
Buying on contract or buying on spot basis
- Contract buying preferred when prices are expected to rise
- Advisable to choose a mix between contract and spot buying
Price agreement vs. performance agreement
- Performance agreement often used when services are purchased (Service level agreement)
- Price agreements might be sufficient if standard quality products are purchased (for example certain types of fabric)
What is the objective of locations strategy? What factors impact how it is picked?
Objective of location strategy: to maximise the benefits of location to the firm
Location decisions can be determined by:
- Marketing strategy
- Compete on cost: find low cost location
- Compete on level of responsiveness: close to transportation networks/market
- Cost of doing business
- Growth
- Potential access to more customers
- Expanding product portfolio
- Depletion of resources
- Industries where resources determine key success
Factors influencing location decisions
- Economic
- Tariffs, taxes, trade concession, capital subsidies
- Temporal
- Competition, demand patterns, industry dynamics, presence of related industries (clustering), skilled employees’ engagement
- Physical location
- Labour cost, developed infrastructure, proximity to market, cost of inputs, competitors locations, specialised inputs
- Organisational factors
- Strategic role of a factory amongst multiple plants
Why do companies go abroad? What should they consider?
- M&A
- Business growth
- Faster lead times/cost reduction
- Increase of offshoring
Aspects countries should consider:
- Country level
- Political risks, legislation, economic issues (currency), location, labour, availability of suppliers
- Region level
- Labour, cost, regulations, proximity to resources, land cost
- Site level
- Site size/cost, distribution systems, proximity to suppliers, environmental impact, clustering
Why are location decisions so important?
Irreversible allocation of the firm’s capital – long term/strategic decision
Business continuity
Impact on supply chain performance
- Lead times
- Inventory
- Responsiveness to demand
- Flexibility
- Quality
Explain the centre of gravity approach
What are the benefits of supplier collaboration and government?
Organisation benefits
Increased performance:
- Access to innovation
- Improved customer satisfaction
- Better quality
- Improved on time delivery
- Increased responsiveness
Lower risk:
- Less SC disruption
- Less reputational damage
- Less product scarcity
- Fewer delayed responses to crises
Supplier benefits
- Lower operational cost
- Motivation to innovate
- Increased efficiency
- Better planning
Mutual benefits
- Product development time shortening
- Quality improvements
- Cost reduction
- Smooth release of new product
- Value co creation
What are the different types of supplier relationships?
What are the different collaboration techniques?
Just in time
- When products are delivered when they are needed.
Vendor managed inventory
- When suppliers take responsibility for a range of contracts to manage the buyer’s inventory. A method introduced to cope with bull-whip effects.
Collaborative planning, forecasting and replenishment
- When supply chains become integrated. CPFR seeks cooperative mgmt. of inventory through joint visibility and replenishment of products throughout the supply chain.
How do you categorise and evaluate supply partners? What are the challenges for partnership building in terms of collaboration, government and sustainability
Categorise existing and potential suppliers as:
Strategic
Suppliers important for the buying firm in the sense that they provide the buying firm with essential material and capabilities that cannot be substituted
Preferred
Suppliers that could be replaced, with some effort, in the long-term.
Transactional
Suppliers that can be easily replaced in the short-term
Evaluation criteria: price, delivery, quality, production capability, localisation etc.
What is procurement?
Procurement is an auction:
- Requirements for the next performance period
- Communicate to suppliers (bidders)
- Suppliers submit a bid (first price, sealed bids)
- The procurement team chooses the winning bidder
Procurement, logistics, inventory mgmt. and production control are tightly linked
In some markets, 80% of product revenues is directed to suppliers for labour, material and equipment
Explain the importance of supplier evaluation in procurement and draw the procurement iceberg
- Market requires product and service quality at reasonable prices. Depends highly on production and suppliers.
- Suppliers are being selected based on their value-added capabilities.
- The buying firm has to determine
- Product/service attributes
- Expected requirements and
- Right quality at reasonable price
the process:
- Identify key purchasing
- Determine puchasing strategy
- Identify potential sources
- Limit supplier in pool
- Determine method of evaluation
- Make selection
Explain the different methods of supplier evaluation (procurement)
- Process-based evaluation
- Evaluation based on suppliers’ production or service processes.
- Performance-based evaluation
- Evaluation based on (objective) performance measures
- Examples:
- Categorical
- Cost Ratio
- Weighted point (linear averaging)
- Value based sourcing:
- Can the supplier decrease our risk (e.g., reducing bottlenecks/critical parts purchasing; disruption response; exchange rates)?
- Can the supplier provide some other competitive advantage (e.g., differentiating factor; new product variant)?
- Can the supplier help expand the portfolio to address new customer needs?
Categorical method
- Categorization of every supplier, in specific areas, based on a pre-defined list of performance variables.
- Categorical assessment, e.g. ‘good’, ‘neutral’, ‘unsatisfactory’.
- Easy to implement, minimal data required, low-cost
- Lacks reliability, subjective, manual process
Cost ratio method
- Categorization of every supplier by standard cost analysis.
- Rating performance at each performance factor.
- Specific underperformance areas are identified, objective supplier ranking, long-term improvement potential, comprehensive assessment
- Cost-accounting required, complex process, information technology resources required
Weighted-point method
- Categorization of every supplier by weights on a list of performance variables.
- Flexible system, supplier ranking, moderate capital costs, combines qualitative and quantitative factors
- Tendency to focus on price, information technology resources required
What are the key concepts that make up supply chain risks?
Key concepts that make up supply chain risks
Events:
- Occurrence happening at a determinable time and place, with or without the participation of human agents
- Financial shock, trade dispute, geopolitics, natural disaster, disease
Vulnerability
- Inability to withstand the effects of an event.
Uncertainty
- Uncertainty related to a known event (risk) and uncertainty related to an unknown event (pure uncertainty)
Risk
- Chance of event happening that will have negative or positive consequences
- Risk is made up of uncertainty, impact, context and nature
- Probability of an event x impact of that event
Resilience
- Ability to recover from network failure, which is achieved by continuously changing supply networks in response to risks by using risk mitigation approaches, such as adopting new processes and /or practices or by reconfiguration
Explain why a changing world creates supply chain risks? Give examples of supply chain risks
OEM:
- Vertical integration vs specialisation
- Integral products vs modular assembly
- Centralised vs dispersed
Unpredictable environment
Changing technology landscape
- faster life cycles
Increasing dependence on suppliers and subcontractors
Implications for future
- Value chains are increasingly fragmented and complex
- Competition between global supply chains
- Managing uncertainty is a key requirement
- Emergence of new business models
What are the different types of supply chain risks?
- R&D risk
- Management
- Product /process design and technology
- Skill set
- Procurement risk
- Supplier relationship
- Raw material
- Location
- Production risk
- Management
- Product, process technology
- Location
- Distribution risk
- Management
- Product
- Location
- Sales and marketing risk
- Management
- Demand projection
- Location
What are the two approaches for supply chain risk evaluation and management?
Two approaches for supply chain risk evaluation and management
1. Traditional
- Identify supply chain characteristics
- Identify risks linked to these
- Evaluate risks (impact and probability)
- Choose mitigations
- Evaluate impact of mitigations
- Plan mitigations
- Monitor risks and risk mitigation
Risk:
- Identification
- Assessment
- Mitigation
- Monitoring
2. Configuration approach
Mapping SC:
- Network structure
- Process flow
- Value structure
- Product characteristics
Event:
- Characteristics
- Database
Identifying risks
- Overlaying event data on SC map
- Identification of vulnerability led risk
Mitigations
- Change in network structure
- Alternative process flow
- Adjusting value structure
- Product redesign
Draw the supply chain resilience framework
Describe using examples, the terms vulnerability, risk and resilience in the context of supply chains.
- The supply chain risk and resilience framework explains the concept of event, vulnerability, risk and resilience.
- At its centre is ‘event’ (such as climate change, war, new regulation or financial crisis), which might have significant impact on supply networks.
- Next is ‘vulnerability’, which is associated with structure of supply network and particularly its lack of flexibility.
- ‘Risk’ appears when key events and vulnerability interacts with each other, which leads to supply network failure.
- Next is ‘risk mitigation’, which is an action or set of actions taken by companies to minimise either impact or changes (probability) of risk.
- ‘Resilience’ is an ability to recover from network failure, which is achieved by continuously changing supply networks in response to risks by using risk mitigation approaches, such as adopting new processes and /or practices or by reconfiguration
What are the different supply chain risk mitigation strategies?
Risk mitigation strategies:
- Increase capacity
- Acquire redundant suppliers
- Increase responsiveness
- Increase inventory
- Increase flexibility
- Pool or aggregate demand
- Increase capability
How do you calculate population and sample:
Mean
Standard deviation
How do you find the outliers when cleaning data?
What are the assumptions of the mean square linear regression model?
Model assumptions:
Mean of zero: at any given value of x, the population of the error term values has a mean equal to zero
Constant variance assumption: at any value of x the population of the potential error term values has a variance that does not depend on the value of x
Normality assumption: At any given value of x, the population of potential error term values has a normal distribution. If this assumption holds, a histogram of residuals should look bell and symmetric
Independence assumption:Any one value of the error term is statistically independent of another.
What are the different types of machine learning?
Machine learning
- Supervised learning
- Here is the data set where the right answers are given for each example. Please produce more right answers.
- Classification
- Unsupervised learning
- Here is the unlabelled data. Please find peculiarities, similarities or structures (clusters) in the data yourself
- Association rule learning
- Clustering
- Reinforcement learning
- Learn to do something by maximising your reward
Explain classification: give examples
- Aim: to label data
- Create a model that predicts what class label new data should have
- Model must first be trained by providing examples
- Examples: classify suppliers, predict condition of engineered parts, classify customers purchasing habits
Various different algorithms for classification:
- Tree induction
- Bayesian
- Rule based
What does a neural network look like?
How do you calculate weights in a neural network?
What is the activation function?
How do we assess the performance of a neural network and how do we improve that performance for each iteration
- Evaluation: How do we assess how well the network performs?
- Initialise with random weights and biases
- Show the network a training example
- Network calculates the activations of all neurons of all layers (using initial weights and biases)
- And then we can compare the value of each output neuron with the value we actually wanted and compute the squared error for each neuron
- This is done for all neurons in the output layer and sum up the squared errors
- So far this was the error for a single image. So, we do the whole process for ALL thousands of training examples
- Then we take the average error for each training example
- Optimisation: How do we tell the network how it can improve its performance?
- We know how to find the minimum
- We calculate the derivative, set it to zero
- Then we get the point and check if it is a global minimum or not
Gradient descent
- You start anywhere on the (multi-dimensional) cost function: random initialisation
- You “look” into all directions from the point of where you are and determine the direction with the steepest descent: you calculate the negative Gradient (the direction of steepest descent)
- You then move one step into that direction
- The step size (or “learning rate”) matters
- The negative gradient of the cost function tells us how to adjust our weights to take the next step
How do you develop a simulation model?
- Understand model goals
- System analysis
- Model and simulation specification
- Model verification and validation
- Design and run experiments
- Draw inferences
Why is manufacturing servitising?
Economic rationale:
- Manufacturing firms in developed countries cannot compete on cost
- Installed base argument
- for every new car sold there are already 13 in operation, 15 to 1 for civil aircraft and 22 to 1 for trains
- Stability of revenues – service vs products
Strategic rationale:
- Lock in customers
- Lock out competitors
- Increase the level of differentiation
- Customers demand it
- Service as a pre-sale activity
Environmental rationale:
- Environmental rationale
What are the seven principles of service design?
What are the phases of service design thinking?
What are the seven principles of service design?
- Bias toward action
- Embrace experimentation
- Radical collaboration: bring together innovators from varied backgrounds
- Show don’t tell: communicate by creating experiences
- Focus on human values: understand the people you are designing for and get feedback
- Craft clarity: produce a coherent vision
- Be mindful of process: know where you are in the process and what your goals are
The phases of service design thinking
Empathize
- Observe, engage, immerse
Define
- Define your point of view
- Provides focus, reference for evaluating ideas, fuels brainstorming
Ideate
- Ideate to step beyond the obvious solutions and drive creativity
Prototype
Test
Show the examples of servitisation for Zoelis, GEA and Pearson and compare them
Explain the key facts about the service journey
Findings show that the service journey occurs:
- Small, careful and incremental changes
- At different organisational levels
- The 4th year is crucial. Two concurrent steams of service development:
- Continue to build up on current basic and intermediate services
- Exploration and piloting of more complex services
What are the seven critical success factors for service transistion?
Seven critical success factors:
Assess market and internal readiness
Creating the strategic and cultural context:
- Design service vision
- Define customer mindset and engage partners
- Develop service culture
Structures and governance
- Define leadership, set organisational structure
Resources
- Define company and individual resources
Engagement and trust
- Engage customer mindset, partners
- Enable change
Service processes
- Design and plan service model
- Pilot and model
- Portfolio mgmt.
- Commercial execution
Optimise and communicate best practices
What technologies are impacting Digital Manufacturing today?
What technologies are impacting DM today?
Sensing: non industrial sensing, network many devices, vision, AR, VR, crowd sourced data
Analysis: cloud computing, mobile computer, clustering algos
Decision: Machine learning, smart products, optimisation, low cost computing
Actuation: Cobots, customers in the loop, AM, FPGAs
What is industry 4.0 what is the rationale what are the dimensions?
Industry 4.0
What is it:
framework for enabling the intelligent integration of physical and digital resources, services and humans resources in manufacturing in real time.
Rationale:
strong individualisation of products, flexible production, hybrid (servitisation)
Dimensions:
Vertical integration and networked manufacturing systems
Horizontal integration through value networks
End-to-end digital integration of engineering across the en3re value chain
Describe an example of a digitally-enabled solution that could expand your firm’s offerings and increase customer loyalty.
- Basic answer will draw upon some of the new digital service solution examples that have been presented in the servitisation lectures,
- e.g. Rolls-Royce Total Care, CAT fleet services, etc.
- that illustrate how data captured from clients can be used to improve service (e.g. reliability) and offer additional services:
Stronger answers should describe the value proposition and value capture (revenue streams) of these new models, and specifically how these lead to both an expanded offering and increased loyalty.
E.g. CAT demonstrates its value proposition – by clients providing access to data from use of their assets leads to increased value capture, i.e. clients are willing to pay for the benefits gained (preventative maintenance, improved asset utilisation, and assigning jobs).
Your firm realises that it is losing revenues from the sale of parts and servicing to independent maintenance firms often using replacement parts from third-party suppliers. Discuss how you can use the phases of service design thinking to introduce a service to solve this problem.
Basic answers introduce a solution for the firm structured around the phases of service design thinking:
An example solution could be the company can contact the garage and offer them a service to help fix the vehicle including:
- a. Information about the equipment and the problem including diagnostics data
- b. Shipment of spare parts to fix the problem
- c. Installation instructions”
This will lead to win-win results:
- The company secures the parts sale
- Garages more likely to recommend Finning for large, complex jobs because of their closer relationship
- Independent garages can reduce stock levels
- Diagnostic information helps garages to fix the vehicle quickly and provide a better service to the customer
- Vehicle fixed with certified parts, improving the quality of maintenance for Caterpillar equipment owners
Stronger answers would describe not just the possible solution but show how these could be developed step-by-step for each phase of the service design process, and to link this explicitly to the challenges being faced by the firm due to the changing commercial context.
