Valuation of strategic production decisions

Article Abstract:

The value chains in industry need to be competitively organised to enable them to meet market expectations. This involves identifying the critical strategic decisions for production and subjecting them to a valuation process to establish their economic effectiveness. It is obvious that strategic production decisions include many valuation problems. In the first place, a production system is a widely branching value chain with many interrelations. Changes in one area have effects in other areas. Secondly, in production, one never makes an isolated strategic decision. It will always be a bundle of interconnected measures. To tackle both problems at once, it might be useful to represent the production processes by a model, based on petri nets. With their help one can achieve an overall schematic representation of linked production processes, in which the input data can be derived from the case in point. The model is capable of evaluating alternative production strategies. Real situations and potentials decisions can be represented. Their effect on the production system will be calculated and an economic analysis provided. The data output from the model can be combined with external data from market sources so that a process value indicator (PVI) is derived. The PVI is then a performance indicator for both current and potential production systems. Its value can be used mathematically as an aggregated figure in valuation and decision-making. [C] 2001 Elsevier Science B.V. All rights reserved. Keywords: Model design; Strategic production decision; Petri net theory; Process value indicator; Ratio system; Decision making

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Integration of production and logistics--in principle, in practice and in education

Article Abstract:

Integration of material processes within and between companies is one of the most fundamental trends in business these days. An integrated view of these processes includes all traditional areas of supplier-buyer relationships and the production of goods and services: generally (and somewhat loosely) speaking, production and logistics. In the paper the issue of integration of production and logistics will be examined from three different but connected points of view. In the first part the conceptual background of the integrated processes will be analyzed, mostly based on the approach of new institutional economics. In the second part an analysis of the actual state and level of integration in practice will be examined, using several recent company surveys. In the third part of the paper a discussion of the current contents of university and management development programs will be given. Finally, conclusion about the connection of handling integration of production and logistics in the three spheres: theory practice and education will be drawn. [C] 2001 Elsevier Science B.V. All rights reserved. Keyword: Integration; Logistics; Institutional economics; Education program

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Coherence analysis methods for production systems by performance aggregation

Article Abstract:

This paper aims at describing methods for the coherence analysis in production systems. This coherence between the various objectives of the decision system is analysed in order to ensure that the achievement of local performances allows the achievement of the global ones, assigned to the whole enterprise. The coherence analysis methods are usable for quantitative objectives, whatever the kinds of performance which is concerned (cost, quality, lead time, flexibility, etc.). The coherence analysis is based on the aggregation and comparison of expected performances (objectives) between the various decision levels. Various methods are developed in the frame of the concepts of the GRAI Model. [C] 2001 Elsevier Science B.V. All rights reserved. Keywords: Performance; GRAI Model; Coherence; Objectives; Aggregation

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