EXAMPLES OF PRODUCTION DYNAMICS CONTROL FOR COST EFFICIENCY

The paper focuses on the principal issue of production control, i.e. t o manage the cumulative effects of individually insignificant factors which together contribute to the difficulties to allocate resources ef ficiently. In the communication between all actors in the value adding chain there are delays and distortions which affect how the industria l enterprise perceives its business environment. The consequences of t hese delays and distortions can be substantial; end consumption is sev erely distorted and the factory gets caught in a vicious circle where false information feeds a capacity load situation that appears nearly chaotic. The phenomena causing the unmanageable situation are commonly known as Forrester's demand amplification effect and the Burbidge's l oad surge effect. It is proposed that the control methods of the enter prise and the reliability of the communicated information directly aff ect how successfully the enterprise is able to avoid the aforementione d situation. The discussion is founded on results from a number of ope rations development projects in the automotive, sweets, electronics an d textile industry. The paper describes the effect of demand distortio n and control surges in a number of enterprises and presents ways of s olving the problems occurring. In conclusion, the significance of the results for directing development efforts in manufacturing operations is discussed.