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The Management of Specifications in Engineer-to-Order Capital Goods Companies

The Management of Specifications in Engineer-to-Order Capital Goods Companies. Chris Hicks & Paul Braiden, Mechanical, Materials & Manufacturing Engineering Tom McGovern, School of Management. http://www.staff.ncl.ac.uk/chris.hicks/presindex.htm. chris.hicks@ncl.ac.uk. Background.

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The Management of Specifications in Engineer-to-Order Capital Goods Companies

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  1. The Management of Specifications in Engineer-to-Order Capital Goods Companies Chris Hicks & Paul Braiden, Mechanical, Materials & Manufacturing Engineering Tom McGovern, School of Management. http://www.staff.ncl.ac.uk/chris.hicks/presindex.htm chris.hicks@ncl.ac.uk

  2. Background • Majority of research in supply chain management in automotive and electronics industries. • Investigated supply chain management in ETO capital goods companies. • Configuration of ETO companies along continuum from vertically integrated to design and contract. • General work on the varying configurations of processes in ETO companies. • Used SSADM functional modelling methodology to model internal processes and interactions with customers and suppliers.

  3. Typology of ETO Companies (International Journal of Logistics: Research and Applications 4(1), April 2001)

  4. Insert FourTypes.doc

  5. IEEE Tranasactions on Engineering Management 47(4), November 2000, pp1-11.

  6. (International Journal of Logistics: Research and Applications, 2(2), April 1999 pp147-159)

  7. (International Journal of Logistics: Research and Applications, 2(2), April 1999 pp147-159)

  8. (International Journal of Logistics: Research and Applications, 2(2), April 1999 pp147-159)

  9. (International Journal of Logistics: Research and Applications, 2(2), April 1999 pp147-159)

  10. Outcomes • Difficult to forecast demand • Tendering success rate low. • Many companies had ad-hoc procedures for selecting which invitations to tender should be responded to. • Relationship marketing becoming increasingly important. • Common requirement to release value from supply chains.

  11. Observations • Majority of cost and planning commitments occur during the tendering process. • Variety of relationships: adversarial, partnerships, strategic alliances, joint ventures etc. • Functional versus technical specifications an important issue.

  12. Research Agenda • Specification, Risk and Value Streams • Human Resource Management in ETO companies. • Knowledge Management • Project planning and optimisation

  13. Specifications • “A written description of a product to guide the development process” (Smith and Reinertsen 1992). • Limited research on specifications • Nellore investigated “black box” specifications in the automotive industry. • CRINE initiative in offshore industry

  14. Aims • Aim is to understand the wider process, significance and dimensions of specifications. • Effective supply chain management requires the matching of specifications with suppliers’ capabilities and capacities. • To develop a model that is applicable throughout ETO supply chains.

  15. Objectives • To understand and model the specification process and its impact on: • Costs • value streams • lead-times • Flexibility • Risk • Innovation • product development. • To identify current alternative and best practices in ETO supply chains. • To facilitate learning within and across sectors.

  16. Method • Analyse various ETO specifications in terms of document content. • Analyse the specification process involved in creating, interpreting and decomposing specifications. • Develop models of the above.

  17. Analysis of Specification Documents • Analyse the language and content of specifications. • Purpose of content: • Performance, technical, functional, commercial and through-life requirements • Risk minimisation • Compliance with legal, regulatory and customer requirements. • Project management, quality assurance and financial control. • Legal liability, arbitration arrangements etc.

  18. Analysis of Specification Process • Analyse the process of producing specifications for different types of supplier and systems. • Analyse the process of interpreting customer specifications • Functional models • Tacit / Explicit knowledge of requirements • Identifying and mitigating risk • Decomposition into internally and externally sourced subsystems • Investigate the transmission of specification information within the internal and external supply chains.

  19. Models • Produce: • Functional models • Decision models • Mismatch models • Value stream models • Match specification processes to different types of ETO supply chains / companies.

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