Monday, September 16, 2013

Fast Ride, Lean Production

As "Factory Efficiency Comes to the Hospital" illustrated, lean production has moved far beyond its roots of car manufacturers looking to produce low cost cars without sacrificing quality. However not many would guess that supply chain strategy has also found its way into the production of the high end, renowned Ducati motorcycles.

"Ducati's Lean & Mean Supply-Chain" details the process the company undertook to implement the manufacturing process within its facilities. This included outsourcing all of its activities except R&D and assembly, redesigning assembly lines, spreading lean production to its suppliers, and selecting an Oracle software product to allow it to achieve its lean goals. This production improvement has significant reduced the production costs to the company and reduced assembly defects by 70% from baseline measures. The article finished by noting Ducati's desire to move to a flexible demand-driven supply network that would allow customers to receive their Ducati's faster.

Unlike the situation Dell faces ("Living in Dell Time"), Ducati customers would likely be willing to wait longer for their purchase before turning to a competitor product than a Dell customer since there are more substitutes for a Dell than for a Ducati. How does this potential cushion effect the supplier relations and contingency plans of luxury brands such as Ducati and Ferrari as opposed to products with many substitutes and competitors?

"Ducati's Lean And Mean Supply-Chain. (Cover Story)." Logistics & Transport Focus 7.9 (2005): 10-13. Business Source Premier. Web. 16 Sept. 2013. (available through the CMU library)

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