ValuePole Reports

Period 1 Progress Report (October 2008 - October 2009)

The work in the first project period focused on delivering a beta-prototype of the ValuePOLE tool; validating the concepts with all SME end-users and implementing a Beta-prototype with one SME end-user partner.

The main work completed in P1 included:

Capturing the main requirements from SMEs in the consortium and the marketplace (WP2).

A cross-sectoral survey was conducted on a sample of 106 small Irish firms operating in a range of manufacturing industries delivering both industrial and consumer products. Respondents were asked to reply to the questionnaire with respect to the new product they had most recently introduced to the marketplace. This study examined the relationships among market orientation, new product performance, and organizational performance. Market Orientation was studied under three headings customer orientation, competitor orientation and interfunctional co-ordination. Measures of new product success were grouped into five categories: (1) market-level measures; (2) financial measures; (3) customer-acceptance measures; (4) product-level measures; and (5) timing measures. Organizational Performance was studied under six headings (1) sales growth , (2) profitability, (3) new product success, (4) sales share new products, (5) market share, (6) ROI or IRR. All variables were studied using a Likert scale.

Key Finding: A model was developed linking market orientation, new product performance, and organizational performance in small firms.

Development of the Market Demand Response Model (WP3)

Most design theories for Manufacturing Planning and Control (MPC) systems focus on the design of pure MPC systems for Make-To-Order or Make-To-Stock. In actuality most companies are both at the same time, specifically the End-Users in ValuePOLE, at the same time. Based on a literature review it is concluded design frameworks for mixed MTO-MTS MPC systems are lacking in current-state. It is recognized that in all likelihood it will be impossible to develop normative guidelines for the design of mixed MTO-MTS MPC systems due to an uncountable number of potential unique manufacturing environment /product /market /supplier combinations. Instead we must develop conceptual models contributing to a better understanding of the implications for planning system addressing both MTO- and MTS-style planning. This research presents a first step towards a framework for designing mixed MTO-MTS MPC systems. This is done through the development of a conceptual model for the impact of an individual customer order on a given planning level. The presented conceptual model can be used both to achieve a better understanding of a given MPC system and to aid in the design of MPC systems. The conceptual model is used to give general insight into the design problem of mixed MTO-MTS MPC systems. By using this conceptual model it is possible to design a MPC system by matching the MTO and MTS planning approaches in a situational manner.

In P2 the conceptual model will be extended to include both a capacity and material side and guidelines for the choice of planning approach. Furthermore a formalized scale for assessing the impact of an individual customer order on a particular planning level will be developed, so that the model contains both qualitative and quantitative measures for assessing and designing MPC systems for MTO-MTS, that can be validated through case studies.

Secondly: From the literature review of Hierarchical Demand Planning it has been established that the current methods are based on assumptions regarding aggregate customer ordering behaviour that may not be true. To investigate this we developed a diagnostics method for establishing the inter-period dependencies of accumulated demand. The method is based on analyzing historic customer ordering behaviour. Based on the developed method it is now possible to establish whether or not accumulated demand profiles are influenced by previous periods demand. From the tested case we establish that there is a significant inter-period dependency between successive periods.

Key Finding: With this diagnostics tool in hand it is now possible to diagnose whether or not the in-period demand profile is independent as assumed in theory, or in fact depends on previous accumulated demand profiles.

Development of an Ex-Ante Predictive Performance Modeller Tool (WP4)

Given the current economic climate, SMEs need to both cut costs and boost revenues. Given that SMEs have limited resources, they need to know before they invest in either New Products or improvement projects what the likely impact will be on a key performance indicator: Revenue. The solution proposed was that the SMEs needed a method of predicting the additional revenue contribution of the proposed new product or process improvement project. They need for a method and a tool to define the economic benefit for completing an NPD or a PIP project as an alternative to not completing the proposed project. A key concern of the SMEs was that they would make an investment in a particular new product or process improvement project but not see the benefit.

This work represents a considerable advance on the state of the art. It is a significant science and technical challenge both within the individual science and technical disciplines as well as collectively across the disciplines of enterprise modelling, optimisation and visualisation.

A key result for ValuePOLE in P1 is that we have developed and implemented (at one end-user) a technical prototype of an ex-ante predictive performance tool for a critical KPI: Revenue.

Development of a Performance Improvement Project (PIP) Model and Optimisation Tool (WP5) and a New Product Development Project (NPDP) Portfolio Model & Optimiser (WP6)

Substantial technical progress has been made against these deliverables, validated in the technical literature. The infrastructure (modelling and optimisation) has been integrated with the ValuePOLE tool, to be deployed in P2.

Deployment of a High Credibility Demonstrator of the ValuePOLE Model, Methodology & Tool (WP7)

The primary focus of the consortium has been the delivery of a prototype tool that meets the needs of the SME end-user partners. A collaborative work approach has been adopted. Given the nature of research projects for the benefit of SMEs, significant collaboration was required in getting to this first P1 milestone:

  • Understanding both the expressed and unexpressed needs of the end-user SMEs from WP2;
  • Expressing and integrating the solutions proposed by the RTD partners from WP4, WP5 and WP6 in a software solution, and
  • Iteratively developing the software solution to balance the user requirements for simplicity with the necessary complexity required by the RTD partners to solve the problem in WP7.

Moving forward to P2, the consortium is satisfied that it has made the necessary science and technical breakthroughs to develop a tool that will meet the needs of the SME end-users. The challenge for P2 is to integrate the various breakthroughs in Market Demand Modelling, ex-ante performance prediction, NPD modelling and optimisation and PIP modelling and optimisation.