Nowadays, there can be an increase development for globalization. The companies are trying to expand their creation and distribution globally. This makes an enormous challenge for every organization to check out up on the market changes. Thus it is very complex decision to find the right production technique for appropriate customer characteristics as predictability, and distributor behavior in terms of lead time. Interconnection between your Riga Lumber upstream and downstream analyses can show hot to secure the downstream with available upstream. It is very vital to find the right production strategy for all products Riga Hardwood is producing, to gain as much profit as is possible.
In our globalized developing world, every company is analyzing and continuously looking for improvements because of their production strategies. Thus, when the business is producing diversified products, diversified strategies can be applied. In this manner, the business can apply the most likely strategy for each and every specific product (Christopher, 2005).
Long lead time
Plan and optimize
De-coupe through postponement
Short lead time
One way to identify the most suitable strategy is through the use of ''Martin Christopher common supply string strategies'' portfolio. The company can already summarize which strategy type they are using right now, which will be mentioned later. When determining the source and demand characteristics, you'll be able to find out, which strategy could be the most useful for the current production.
As it could be seen in table xx, there are four different production strategies which can be used. In order to locate the most appropriate strategy type, Riga Lumber has to assess their source characteristics and demand characteristics. These analyses will lead to the most likely strategy type, according to the current upstream and downstream behavior.
It is important to ascertain dealer characteristics, in regard of Riga Hardwood supplier lead time frame, due to the fact Lignums production place is running a day 7 days weekly. Riga Real wood therefore must define forestry lead time for birch supplies, in one side as there are many small forestry models who are providing Riga Solid wood within birch resources, company have to keep up with the problem in the forest what exactly are facing these forestry models. Hence leverage and strategic provider, like forestry's, where lead time shortening should be the main target for purchasing departments, normally where non-critical and bottleneck provider e. g. glue and packing materials have a low impact on company's revenue (Krajlic P. , 1983).
On other palm, demand characteristics are even more vital to determine, the business has to explain their market predictability. For defining the market as predictable or either unstable, the company has to evaluate customer behavior and ability of buying. For Riga Timber producing made to order only, unstable market should apply, however in the same time as Riga Wood are limited with factories production capacity, it also show predictability. Therefore further analyze is completed, to see which strategies meets the best for Riga Real wood.
To offer with unpredictable demand characteristics, ''Hybrid'' and ''Agile'' strategies are the most suitable. Hybrid strategy can be intricate, since it is performing as postponement of de-coupling point between made to stock (MTS) and MTO. Hence ''The goal of any hybrid strategy should be to build an agile response after a LEAN program by wanting to fallow LEAN concepts up to the de-coupling point and agile procedures from then on point. '' (Christopher, 2005) p. 120.
A strategy type for unpredictable market with long lead time is ''Hybrid''. Because of this strategy type, MTO-based creation can be used, offering company's customers a wide variety of products. Hence in once in is approach to have a long lead time, what's best suited with current situation in Riga Real wood. The current lead time is set up from 8 till 12 weeks; hence lead time can transform through the seasonality and customer demand variance. Through the high customer's demand and buffer capacity of development supply in Lignums factory, in other words demand overtakes creation capability.
In other hand a strategy type for unstable market with brief supplier business lead time is ''Agile''. Also here MTO creation can be applied. Thus this type of creation required the power of changing and changing very fast to market changes - quite simply viewed as quick response.
The part of MTO production requires fast changeover times; products are being given and fine-tuned to customer needs and would like. Hence the whole production has to be agile as is possible when working with MTO development. When contemplating Riga Timber position and situation on the market constrained by company principles, you can therefore conclude that Riga Wood presently could stand into ''Hybrid'' strategy as market could be unstable and lead time leave long, hence company could striving towards ''Agile'', to achieve reduced lead time and faster reaction to customer demand.
For predictable demand characteristics ''Slim'' and ''Kanban'' strategies might apply. Lead time signifies the key different between these forms of demand characteristics based mostly supply string strategies. This intuitively has a primary effect on inventory-levels, due to covering time when buying, leading to increased probability of efficiency.
Riga Lumber in presently from other aspect is interacting with LEAN creation. Furthermore doing ongoing planning and optimizing, because of their production, Riga Solid wood is wanting to improve the efficiency in creation and transportation. This plan suits best for predictable marketplaces and long resource lead time
Contrary with MTO development, MTS manufacturing are with few, brief- striving, changeovers, this the changeover costs are residing in the same level or even being reduced. MTS development is based on producing the products for future sale, resulting in high volume packages and among the most commons production strategies. When increasing volume sets, it'll reduce the production costs per item. Therefore you don't have for Riga Hardwood determined towards MTS bases production.