Optimal investment policies in premature manufacturing technologies

Abstract

Mass customisation, increasing complexity and variety of new products as well as ongoing global competition force companies to use innovative manufacturing technologies. However, the way from a new and premature manufacturing technology towards its application in series production at the level of operational excellence is challenging. Recent examples in the automotive industry, such as alternative powertrains and new body concepts for lightweight design, have shown the necessity to integrate production research into the very early phase of product development – going far beyond established approaches of simultaneous engineering. This paper presents an optimisation method which enables companies to find the best point in time to start investing in a new premature manufacturing technology during product development. Therefore, a dynamic and stochastic model is used based on a Markovian decision process. Finally, the method is applied in an example of a manufacturing technology for the automotive industry.

Keywords:

• technology management
• manufacturing strategy
• Markov decision rules
• new technology management
• optimisation
• dynamic programming