VARIABILITY REDUCTION THROUGH OPERATIONS REVERSAL

Products with high product variety are often made in a manufacturing p rocess (or a supply chain) consisting of multiple stages, with product s taking certain features or ''personalities'' at each stage. The prod uct may start as a common single engine. As the product moves along ma nufacturing process, more features are added, and the product assumes more identities of the final end product. When demands of the end prod ucts are variable from period to period, the production volumes of the intermediate stages in the manufacturing process are also variable. I t is widely recognized that variabilities of production volumes may ad d cost to the process. This paper is motivated by our observations in industry, where some companies have reengineered the manufacturing pro cess by reversing two consecutive stages of the process. Such changes could lead to variance reduction, thereby improving the performance of the process. We develop formalized models that characterize the impac t of such changes: operations reversal. These models are used to deriv e insights on when such reversal would be advisable.