Title: A cost-benefit comparison of build-to-order and hybrid build-to-order/build-to-stock assembly for automotive modules

Authors: Emrae Jung

Addresses: HBPO Asia Ltd., 35F Tower A, New Caohejing International Business Centre No. 391, Guiping Road, Xuhui District, Shanghai 200233, China

Abstract: Transition from mass production to mass customisation in automotive industry has been forcing vehicle manufacturers and their suppliers to find ways to cope with the new demanding environment through more flexible and efficient processes. Just-in-time delivery, modular design and assembly, synchronous production, build-to-order (BTO) and just-in-sequence delivery are some of the concepts that have been implemented in the automotive industry to be more efficient. Modularity has evolved as a concept enabling effective customisation by dividing products into smaller sub-assemblies and as a result, modular production is currently being applied by increasing number of vehicle and part manufacturers to manage the ever-changing orders of the industry. The objective of this study is to compare two different production strategies implemented by two different tier-1 module suppliers operating in automotive industry. One of the suppliers implements synchronous BTO assembly concept as it is widely used by tier-1 module suppliers while the other supplier prefers a hybrid approach. Both concepts were examined by evaluating operational cost of each one compared with the other and by considering benefit in terms of responsiveness offered in return.

Keywords: modular assembly; synchronous production; build-to-order; BTO; build-to-stock; BTS; automotive module.

DOI: 10.1504/IJIR.2023.130365

International Journal of Inventory Research, 2023 Vol.6 No.2, pp.103 - 115

Received: 18 Dec 2020
Accepted: 22 May 2021
Published online: 18 Apr 2023 *

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