'The flexible landscape': A model for explaining operational mix and volume flexibility

Abstract

This paper is a description of a model for visualization of operational effects caused by tactical changes regarding volume and mix flexibility. The work is based on 'A framework for analysing manufacturing flexibility' (Upton 1994). The model is calculated and visualized using a Microsoft Excel spreadsheet. Due to focus on learning before realistic analysis, the modelling is based on an idealized production situation. Typical inputs include the number of operators, wages, prices, process times, set-up times, limits for regular working hours and overtime, learning curve exponent, and fixed costs. The profit is calculated and presented visually as a function of production volume and the number of batches. The result is 'the flexible landscape'. The model visualizes the range where the production system will make profit, and where it will run at a loss. The model is not meant to compete with production simulation tools for the analysis of actual production systems, but to communicate qualitatively what happens when different changes and decisions regarding flexibility and productivity are made. Consequently, the user can observe immediate changes in the 'landscape' when input data are altered. This gives a powerful visual opportunity to sense cause-and-effect relationships. The model accelerates learning.