2-F-2 Manage ramp-up strategy and implementation to full-scale production for new product or service introductions
Time-to-market has been perceived as a critical source of competitive advantage that enables organizations to achieve fast payback on their new product development and production investments, and to gain a market leading position from early entry. However, these advantages depend on time-to-volume, or "ramp-up". Ramp-up is the period during which the manufacturing process makes the transition from zero to full-scale production at targeted levels of cost and quality. It may take weeks or even months to reach this point as operators must learn the new process and process problems are identified and fixed.
1 ) Sales projections
Sales projections are critical to achieve effective ramp-up. Poor forecasting can lead to involuntary down time as suppliers cannot, or have not, supplied enough of the critical components. Other times, the supply management professional may rely on the supplier to handle problems caused by poor sales forecasts.
2) Staffing requirements
Ramp-up projects operate most effectively within a cross-functional and cross location team structure. As production moves from the pilot environment to volume production, cooperation among people and departments is critical.
3) Operations capacity and capabilities
A) Operations flexibility and response time – Ramp-up is characterized by high variability and uncertainty, with conflicts in managing short cycle times and fast throughput increases. Operations flexibility to achieve a fast entry strategy may be achieved through mechanisms such as computer-aided-design/ computer-aided-manufacturing (CAD /CAM), design for manufacturing and aggregate project planning.
B) Equipment and labor capabilities - During ramp-up, new equipment needs to be delivered, hooked-up, installed and aligned with the right process. For first time production, this may also require detailed experiments and analyses to prove process capability prior to release of product. Similarly, skilled labor in production engineers is required to undertake rapid problem solving to build knowledge of the process and improve yield rates.
4) Logistics/distribution capabilities
Efficient logistics networks are key to rapid ramp-up and ensure that materials arrive on production lines on the desired schedule. Rapid logistics may also help keep the schedule when supplier shortages occur as components may be shifted from locations in surplus to another in deficit.
5) Supplier capability/capacity analysis
Although a supplier may have an innovative technology, it may not be able to meet the requirements for capacity, delivery, quality and cost. !'-.Jew, innovative suppliers are typically small and have limited production capacity. In some cases, the buyer may represent 50 percent or more of a small supplier's annual revenue. Supply management professionals must be mindful of not only the technological aspects of product design but also comn1ercial issues of capacity and ramp-up.
A) Tooling -Tooling and capacity investment decisions typically have long lead times and as such must be made early. Once made, they have a lasting impact. A decision to invest too little in tooling and capacity can take a long time to correct, which carries a high opportunity cost. A decision to invest too much in tooling a1_1d capacity can significantly increase the per-unit cost of the component or module. Organizations may review the tooling capacity of their sup- pliers prior to launch to ensure that all production tooling is in place to meet expected demand for the new product.
B) Prototype qualification -Testing and evaluation of prototypes for minimal technical requirements is critical for meeting long term cost and performance targets. Qualification prototype refers to building and verifying the product, per final design prints.
6) Lead time and inventory planning
A key challenge of ramp-up is ensuring that the supply chain maintains pace with the volume growth. Particularly in a global production network, organizations may continue having to source from existing suppliers with longer lead times in order to meet planned inventory levels.