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An economic analysis of investment in an assembly line: Case study at Ericsson Mobile Communications AB, Linköping, Sweden
Linköping University, Department of Management and Engineering, Assembly technology. Linköping University, The Institute of Technology.ORCID iD: 0000-0003-1646-5817
Linköping University, Department of Management and Engineering, Assembly technology. Linköping University, The Institute of Technology.
2001 (English)In: Proceedings of ICPR-16 / [ed] Daniel Hanus, Jaroslav Talácko, 2001Conference paper, Published paper (Refereed)
Abstract [en]

During the last four years the global annual production of mobile telephones has increased four times. To Ericsson Mobile Communications AB's supply unit in Linköping, Sweden, this has been a tremendous challenge. The supply unit has increased the produced volume of mobile telephones six times during this period at the same premises. The strategy for the production-engineering depattment was to change the manual assembly line into an automated assembly line. The automated assembly line was built up with SONY smart cells. During 1998 the volumes increased rapidly and the automation strategy where copied to the test stations for the mobile telephones.

This paper discusses the importance of how to link a manufacturing strategy to economical calculations. A case study at Ericsson Mobile Communications AB shows how financial calculations was used when changing from manual testing to automated testing of mobile telephones. Even though all benefits were not accounted for. the studied automation project for automated board test had a calculated pay back period of 7 months. The decreasing production volumes for mobile telephones made that the real yearly cost for the investment increased dramatically compared to the calculated investment cost. The decision-makers need to analyze the risks in an investment calculation due to the uncettai.nty in data used in the calculations. For example, it can be difficult to analyze the risks depending on the difficulty to predict the development for the product market and the future product volumes. The investment calculation result can also differ depending on who is delivering the numerical data that are included in the calculations.

Place, publisher, year, edition, pages
2001.
Keyword [en]
Manufacturing strategy, Production economy
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:liu:diva-14108OAI: oai:DiVA.org:liu-14108DiVA: diva2:22650
Conference
ICPR-16: 16th International Conference on Production Research, 29 July-3 August 2001, Prague, Czech Republic
Available from: 2006-11-01 Created: 2006-11-01 Last updated: 2016-09-26
In thesis
1. Collaborative Product Introduction within Extended Enterprises
Open this publication in new window or tab >>Collaborative Product Introduction within Extended Enterprises
2005 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The trend of outsourcing within the electronic industry has contributed to the creation of new types of extended enterprises. These extended enterprises must be able to manage a challenging situation with shorter product life cycles and increased collaboration between companies during the vital product introduction process. For the electronic industry, which is currently acting in an “era of hyper-competition”, it is a challenge to implement an efficient and flexible collaboration within an extended enterprise during the product introduction process. In the product introduction process, a product design is prepared for and transferred into production.

During the course of this research, the electronic industry has changed continuously. Empirical data were first collected within an Original Equipment Manufacturer (OEM) that was responsible for its own production. Based on a strategic decision at the OEM, a new extended enterprise was established. In general, these new extended enterprises within the electronic industry consist of: a “product owner” in the form of an OEM that owns the product design and its brand; a “producer” in the form of an Electronic Manufacturing Services (EMS) company that is responsible for the production; and suppliers of services, material, components, equipment etc. However, in the later stages of this research the studied EMS was responsible for the product introduction, production and distribution of the product to the end user. In order to compare and contrast trends and lessons learned in similar industries, case studies within the mechanical engineering and aerospace industries also were performed.

The dissertation primarily describes the process of collaborative product introduction (PI) within the electronic industry, and presents among other things a number of general conditions for efficient collaborative PI within an EE in that industry. First, a clearly communicated definition of what is included in product introduction is needed. A second condition is that early participation from all involved partners in the EE’s product introduction process supports efficient collaboration. Third, clear communication and information handling within the extended enterprise – both internally and externally – was found to facilitate collaboration. Fourth, business approaches should be built on trust, reliability and respect for each other’s competence. Finally, the importance of cultural awareness, both between different companies and countries, cannot be ignored. This research also presents a framework for supporting collaborative product introduction within an extended enterprise, which serves to both synthesize and summarize much of the research.

Place, publisher, year, edition, pages
Institutionen för konstruktions- och produktionsteknik, 2005
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 943
Keyword
Technology, Outsourcing, Electronic industry, Original Equipment Manufacturer (OEM), Electronic Manufacturing Services (EMS), Product Introduction (PI), Product introduction, Industrialization, Collaboration, Extended Enterprises, Company networks, Production Engineering, TEKNIKVETENSKAP
National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-7668 (URN)91-85297-94-1 (ISBN)
Public defence
2005-06-10, C3, Hus C, Campus Valla, Linköpings universitet, Linköping, 10:15 (English)
Opponent
Supervisors
Note
On the day of the public defence the status of article VIII was Accepted and the title was "Coordination in Collaborative Manufacturing Mega-Networks: Observations from a Case in the Commercial Aerospace Industry".Available from: 2006-11-01 Created: 2006-11-01 Last updated: 2016-09-26
2. Product introduction within extended enterprises : description and conditions
Open this publication in new window or tab >>Product introduction within extended enterprises : description and conditions
2002 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

The trend of outsourcing within the electronic industry has contributed to the creation of new types of extended enterprises. These extended enterprises must be able to manage a challenging situation with shorter product life cycles, increased co-operation between companies during product development, more individualized products, etc.

In general, these new extended enterprises consist of: a "product owner" in the form of an Original Equipment Manufacturer (OEM) that owns the product design and its brand; a "producer" in the form of an Electronic Manufacturing Services (EMS) company that is responsible for the manufacturing; and suppliers of services, material, components, equipment etc. In some cases the producer has the responsibility for the product introduction process. In the product introduction process a product design is prepared for and transferred into production. The product introduction includes the design of the production system.

The challenging situation in the electronic industry demands an efficient and flexible manner of work during the product introduction process within an extended enterprise. The objective for this thesis is therefore to explore and describe, on a general level, factors, parameters, and conditions that are of importance for an efficient product introduction within an extended enterprise.

In the research empirical data were. first collected within an OEM that was responsible for its own manufacturing. Based on a strategic decision at the OEM a new extended enterprise was founded. This new extended enterprise consists of the original OEM as a product owner, an EMS as a producer with responsibility for product introduction and manufacturing, and their suppliers. After this strategic decision, further empirical data were collected within this newly founded extended enterprise.

The analysis of the empirical data made it possible to explore and describe a generic product introduction process. Furthermore, a generic structure of an extended enterprise is presented and the main conditions to fulfill in order to achieve an efficient product introduction within an extended enterprise are described. These main conditions are:

  1. A clear defmition of what is included in product introduction.
  2. Early participation from Production System Design in the product development project.
  3. Clear communication and information handling within the extended enterprise - both internally and externally.
  4. Business approaches built on trust, reliability and respect for each other's competence.
Place, publisher, year, edition, pages
Linköping: Linköpings universitet, 2002. 58 p.
Series
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 978
National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-39880 (URN)51571 (Local ID)91-7373-457-8 (ISBN)51571 (Archive number)51571 (OAI)
Available from: 2009-10-10 Created: 2009-10-10 Last updated: 2016-09-26

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Johansen, KerstinBjörkman, Mats

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