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Management - Essay Example

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Therefore the relationship between product-mix flexibility and capacity utilization is that the two factors are directly related. A higher degree of product-mix flexibility leads to a higher degree of capacity utilization. Because the company is able to vary output according to demand, idle capacity is minimized. As a result capacity utilization is maximized. By implementing the strategy of product-mix flexibility, the company is able to manufacturing a range of different products by using the same equipment. As a result the management is able to recoup the maximum return from the investment made in the equipment. In this manner the utilization rate of the production line is maximized. Thus product-mix flexibility is directly related to capacity utilization. Higher levels of product-mix flexibility reduce the production lines’ sensitivity to demand fluctuations. By implementing a flexible manufacturing system (FMS), the production line is able to maintain a mix of products that is able to adapt to any changes in the demand structure. In order to implement the strategy of product mix flexibility, the management has to introduce the technology of the flexible manufacturing system. The FMS facilitates the building of a production line that can produce a range of different products with minimal changes required in the same. ...
This was the innovation introduced by Fiat’s management. By implementing the Robogate technology, Fiat aimed to create a flexible production system which would be able to achieve product-mix flexibility according to market demand. The technology was developed in-house. It was deployed in the spot-welding shop and was so named because the nine welding stations were called gates. The deployment of Robogate signaled Fiat’s quest for increasing production flexibility. The production limit for Robogate technology deployed at Rivalta and Cassino was set at 1400 cars per day. However it could vary the output levels between different models, Uno and Ritmo at Rivalta, Regata and Ritmo at Cassino. By allowing production managers to process a range of cars in a random sequence, the Robogate technology aimed to incorporate market-driven fluctuations into capacity utilization. However whether this innovation enabled the company to maximize capacity utilization is questioned by the author in this article. The technology was certainly able to minimize the cycle-time of finishing but capacity utilization still fluctuated as before in the traditional system. The problem with implementing the technology was that the production philosophy was still defined according to the traditional system of cycle-time minimization rather than flexibility maximization. As a result, the Robogate technology failed to increase the rate of capacity utilization. But aside from that question, the superiority of the Robogate technology over other techniques was overwhelming. The Robogate itself was flexible. However because the platform and body welding lines upstream were still ...Show more
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Product-mix flexibility refers to the process of customizing the output structure to demand. Thus product-mix flexibility enables the management to minimize the effects of demand segmentation and segment share volatility by varying production capacity to manufacture varying levels of output…
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