“Engineer to Order mass and extended production systems

Engineer to Order mass and extended production systems improvement in the Construction industry based on GRAI Methodology: an empirical study Ander Errasti and Javier Santos Tecnun University of Navarra, Spain Raul Poler CIGIP-UPV, Spain

ABSTRACT The aim of the following research is to investigate the adoption of some good practices in the Construction Sector, based on developed practices in other sectors,that could be helpful to gain competitive advantage. These practices (GRAI Methodology to improve the operational performance of the supply chain) are already known and have been studied by researchers, however the development of these techniques in the field of Construction has not been so deep.

The proposed research method is based on Action Research, in which the researchers are involved in the changing process. This method has been chosen because it is a theory extension or refinement.

In the last three years the researchers have been involved in using an experimental model for the diagnosis, strategy formulation and deploy of these practices to improve the performance of one top firms related to Construction sector.

The conclusion is that the benefits of integrating and improving the planning and control system of the extended enterprise aided by GRAI methodology, as well as Action Research utility for this type of Research are completely demonstrated.

1 Introduction 1.1 Paper introduction This paper starts with the origins of the research, goes on with Literature Review about Construction Sector Supply Chains, Mass Customization principles in project based production systems and supplier integration. Then, it shows up the Research Questions and expose the method how the researcher has conducted the Research Objectives.

This paper also presents the company which have taken part into the Action Research, and the main characteristics of the projects carried out. Finally the main conclusions and future research questions are exposed.

1.1 Origins of the research The possibility of transferring good practices from Manufacturing to the construction industry has been identified in the literature (Ngowi, 2000)(Anumba et al, 2002), in particular Ngowi (2000) has suggested that: ‘‘Supply Chain Management and time compression techniques which require close interfunctional cooperation have been successfully implemented in the Manufacturing Industry and there is a possibility that they can be used to integrate the various disciplines of the construction at project level’’. Moreover, it has been argued that the implementation of these principles might usefully be extended beyond the boundaries of organisations to include their suppliers (Gunasekaran, 2000) (Towill, 1998). Indeed, an increasingly large number of publications are concerned with inter-firm projects (Soderlund, 2004).

Even if there have been some practices developed by main subcontractors ( Errasti et al, 2006) (Errasti et al, 2008) there are few evidences (Errasti et al, 2007) of development of these principles to Engineer to Order mass and extended production systems in the Construction Sector.

2 Literature review

2.1 Construction Sector Supply Chains In the construction industry, design consultants will produce a product specification, costing and bill of quantities based on a client’s brief. Thereafter, the project will be passed to a contractor who will take responsibility for the overall construction of the facility. The contractor will typically subcontract packets of work to Subcontractors with specialist skills and expertise (Fig. 1).

Client

Design identifies client´s requirements

Initial design & documentation Buiding contract

Design team

Design concept used for detailed design

Detailed design & documentation

Contractor Design for construction Sub-contracts

Main Subcontractors /Subcontractors

Outsourced Activity Suppliers

Materials Suppliers

Materials Suppliers

Fig. 1. Agents involved in design and construction projects and their relationships adapted from Thomas (2002).

These subcontractors are subject to tremendous pressures in terms of quality, service and cost (Chan et al, 1999). In the construction industry the environment in which construction projects are delivered is often adversarial and contractual in nature; each member of the project team accepting consequential penalties for failure to deliver (Haque, 2003), i.e. to meet contractual obligations which are frequently defined in terms of the above competitive priorities.

Subcontractors are therefore, obligated to create value if they want to survive in a competitive environment, which is increasingly global in its scope, and dependent on the performance of the supply network. Value in this context is defined as ‘‘the amount buyers are willing to pay, for what a firm is able to provide them” (Porter, 1980).

Thus, some authors (Porter, 1985) have argued that value analysis should not be restricted to the value added by the company itself, but should also consider the extended enterprise, i.e. include suppliers, Design teams, contractors, subcontractors, contractors and other stakeholders. Consequently, the value chain concept (Porter, 1985) must be extended beyond the value system of the focal company concerned and encompass all the agents in the supply network that contribute to the value proposition. In this regard, the development of a supply chain strategy that provides a holistic perspective of the value chain is critically important as it will ensure that the strategies of the different agents are aligned with the overall objectives of the project and the value opposition of the supply network.

Thus, where appropriate, subcontractors must develop manufacturing strategies that take account of the position of the manufacturing facility in the value chain (Thomas et al, 2002). Contractors and subcontractors work within a project based system and the trend in subcontractors’ project management is toward closer organisational integration (Schemerhorn, 1993). The opportunities for repetition are usually limited, in other words, it is a ‘‘low volume – high variety” environment (Slack, 1993) in which the workforce, equipment and materials must be taken to the site where the finished product is to be assembled. Consequentially, construction projects are frequently characterised by a great deal of operational uncertainty (Kolveit, 2004). They can take many weeks or months, to complete and involve the assembly of large numbers of components and subsystems that are made off-site. This

process fragmentation is partly because construction projects usually require contributions from suppliers with specialist skills that span a broad range of construction and manufacturing disciplines. The result is that the design and execution of a project is normally separated economically, organizationally and geographically.

2.2 Mass Customization principles: beyond low volume project based production system paradigm Encapsulated in this concept of value is the notion that organisations must compete on a range of competitive dimensions. Haque´s (2003) states that the reasons to start up with a improvement programme in a subcontractor are improve product quality, reduce time to market, reduce product cost and improve human resource efficiency. One of these is ‘time to market’, which is increasingly being seen as an important source of competitive advantage (Mahmoud-Jouini et al, 2004). However, the rise of lead time as a critical competitive priority is not limited to the construction industry. Another important differentiator on how customers valued the products is customization.

Creating unique products is only possible if the customer can influence the properties, meaning that the product to some extend is engineered to order. In this context, some parts of the logistics activities are performed as the customer is waiting but also, that some preceding activities may have to performed on speculation due to the fact that the production lead time is longer that the required delivery time ( Rudberg & Wilkner, 2004). A concept frequently used to capture this aspect of operations strategy is the customer order decoupling point (CODP), that decouples operations in two parts ( Hoekstra and Romme, 1992). Upstream of the CODP the activities are performed to forecast and downstream they are performed to customer order. Tipically four CODPs are defined Engineer to Order, Make to Order, Assemble to Order and Make to Stock (Olhager, 2003). In the Construction Sector as a project based production system usually the Engineer to Order production system is used. That means that the order or project will be built to order, The Build to Order concept captures the idea that value-adding activities- manufacturing, even assembly- are triggered by orders, rather than forecasts. By performing value-adding activities to order, a company would avoid incurring the risks of forecasting uncertain events (Salvador et al, 2006). Some Build to Order production systems integrating the above mentioned value proposition, have to customize the product, thus an engineering Design Stage should be integrated before manufacturing. Rudberg (2004) introduce the engineering dimension to the CODP. Once the product is designed could be interpreted as if the product design is already “in stock” or “Virtual stock” ready to be manufactured and assembled when needed.

These production systems called Engineer to Order (EOPS) are usually project based production systems, where the element of repetition is usually limited, in other words “low volume – high variety” (Slack et al, 2004).

Nevertheless the Mass Customization could allow increasing the production volume. In this case we could have “high volume-high variety” project based production systems. Thus, the Mass Customization concept implementation could aid companies to both short lead times and providing customer value in terms of unique products in a high volume production system.

2.3 Supplier integration in the Construction Industry In the construction industry, no project can be undertaken by a single organisation without some degree of outsourcing, even Design and Build Method (Anumba et al, 2000). A single company can rarely claim to possess the entire technical expertise, resource base, or investment capital required to fully accomplish it. “Main subcontractors and suppliers should be introduced into this phase so that downstream activities of the construction process can be addressed” (Gunasekaran, 1999).

Suppliers are usually devoted to manufacture and some components or subsystems that should be then supplied and assembled in the manufacturing or assembly sites. Some subcontractors could have expertise in some

components or subsystems. Therefore, they are required to supply these components and subsystems or variations of them in more than one project.

The design and detailing of components are usually planned to overlap with the manufacturing period. This creates multiple and parallet processes. Parallel operations are at the same time interdependent and can therefore be expected to interrupt and disturb the manufacturing and assembly processes.

Main subcontractors Manufacturers respond to these challenges by working more closely with their suppliers and customers and by building extended enterprise across the value chain. That means linking in terms of coordination in the design, development and costing independent manufacturing enterprises (Jagdev et al, 1998). The extended enterprise concept is also in tune with the concept of core-competences (Prahalad, 1990). The firm must concentrate on Core-Competences and try to outsource non Core-business activities gaining a more flexible business design.

There must be a close relationship with the suppliers of the activities outsourced trying to integrate them. For Collaborative relations, commitment between manufacturers and suppliers based on an effective exchange of information could have better performance in both partners (Jagdev et al, 1998)(Neng et al, 1995)(Childe, 1998) (Yu et al, 2001).

Even if many enterprises are sacrificing cost effectiveness and customer satisfaction because they are unable to work effectively across the firms, not all the trading relationships should be collaborative (Spekman, 1998). Buyers are far more sceptical about the benefits afforded through such close integration, because they are aware of dependency on a smaller number of suppliers.

In the construction industry the advantages of closer collaboration could be that: - Cost and quality savings on the project may be found during the design of the process (Thomas, 2002).

- Project execution could be more efficient if the operational coordination avoids misunderstandings in the manufacturing process - Project execution could be more efficient if manufacturability of the project and ease of assembly were taken into account (Anumba, 2000).

It would appear therefore that provided appropriate working relationships can be developed amongst the parties involved, may have a particularly valuable contribution to make to the value creation capabilities of the construction supply chain. Moreover, there is a growing body of evidence that suggests that these linkages have not been entirely satisfactory and that performance for both parties could have been better (Childe, 1998) whilst others have attributed some of the causes of poor performance: quality failures, increased costs, and delays in the project delivery process, to misunderstandings and a lack of communication among the participants (Boddy, 2000) Some authors (Caron et al, 1995) add that the lack of supply chain and logistics related management in a project environment have a significant influence on the manufacturing systems.

Clearly, to exploit the advantages and control the risks, collaborative partnerships in which organisations agree to work in a more cooperative manner are needed. This means Companies must re-design their business operational processes to facilitate improvements in the exchange of information, the development of closer cooperative relationships and ultimately, mutually beneficial project collaboration.

2.4 GRAI Methodology

As a result, the internal functions such as engineering, purchasing, manufacturing, and external suppliers have to coordinate the decision points and the action points to ensure the smooth functioning of the manufacturing system.

Enterprise Modelling is an important instrument to structure this complexity. Enterprise Models help us to reengineer business processes related to a single company or to a supply chain. Concerning decision models, one of the outstanding architectures is the GRAI Integrated Methodology. GIM (Doumeingts, 1984) aims to give support to users and designers of industrial systems, from the user requirements definition to the design phase after the analysis phase (Doumeingts et al, 1992).

The basic principles of the GIM approach are to support the Analysis/Design stage, which is divided into two parts: 1.

The Building of the Conceptual Model of the Current System (Analysis stage) and its conversion into the Conceptual Model of the Future System (Design stage).

2.

The second part provides technology-oriented specifications: this allows to translate the Conceptual Model of the Future System into three categories of specifications: a.

Information technology ( hardware and software specifications)

b.

Manufacturing technology ( tools and equipment specifications)

c.

Organisation (physical system and management structure)

At conceptual level, the GRAI Model is made up of three systems: the physical System, the Decision System and the Information System (Figure 2).

DECISION SYSTEM

INFORMATION SYSTEM

Period-driven subsystem

DU C

TS

PHYSICAL SYSTEM

PR O

RA CO W M MA PO TE NE RI NT ALS S

Event-driven subsystem

Figure 2: The GRAI Model

The Decision System is divided into levels of decision-making. Thus, GRAI Method proposes a hierarchical structure to define the Decisions Systems in the company. The GRAI Method original formalism to represent the decision centres containing the decision processes is the GRAI grid. With the objective of incorporate the simulation to the models of decision systems, DGRAI Model was developed (Poler et al., 2002). DGRAI allows the decision processes from a finite capacity point of view to simulate (Poler and Lario, 2001) due to the incorporation of the human resources as activities’ executioners and it also highlights the problems related to the decision coordination from a dynamic point of view.

3 Research questions and objectives

Even if some authors argue that few companies are actually engaged in such extensive supply chain integration (Fawcett et al, 2002), the authors of this paper state that GIM approach could be useful to accomplish an integration reengineering project in order to improve overall supply chain performance. The improvement of an Engineer to Order mass and extended production systems requires an updated approach to planning and control operational system including design process and evaluating the coordination needs in the extended supply chain that allows order promising to secure reliable delivers with shorter lead times. GRAI grid and DGRAI Model would also allow the simulation of the decision systems in order to validate the TO BE model. These tools have already been applied successfully while integrating Make to Stock production systems (Errasti et al, 2006) and partially in Engineer to Order Production systems ( Errasti et al, 2007). More over, the need of coordination and synchronization has not been studied in depth in case studies of “high volume-high variety� EOPS. Thus, this paper explores the method in which the redesign of internal and external integrated processes should be carried out; aided by GRAI grid and DGRAI Model, in order to improve the overall performance of the supply chain in EOPS in mass and extended supply chain environment.

This research has also conducted a case study answering the difficulties mentioned above.

4 Research Methodology The research methodology behind the work presented in this paper, consists of a theory-building phase, a theory testing phase and a synthesis phase: Theory-building: started with an extensive literature review to identify the issues/factors to be considered in the implementation of the GIM approach in a supply chain.

Theory Testing: the theory-testing phase of the research was designed around action research principles.

Action Research can be seen as a variation of case research (Yin, 1994), in which the action researcher is not an independent observer (Westbrook, 1995)(Rowley, 2004) (Zuber Skerritt, 2002)(Vignalli, 2003)..

Conclusions/Synthesis: in the synthesis phase the conclusions of the case studies and the findings are shown, which increase the understanding of the reengineering process and the techniques based on Enterprise Decisions Systems Analysis and Design Models to integrate the supply chain.

5 Theory building: issues/factors to be considered while implementing the GRAI Method to a supply chain Given the implications of redesigning a supply chain decision system, the decision to do so and how, should be considered a strategic issue for the firm. Thus, the concepts identified in the literature were set around the steps that are typically needed in a strategy development process. Authors like Acur (2000), state that for a dynamic strategy development process four stages (inputs, analysis, strategy formulation, strategy implementation and strategy review) are needed and that management and analytical tools can be used for this purpose.

The authors of this paper have accepted this approach; nevertheless this research simplifies this process and adapts it to the business units´ operational strategy (Platts, 1990) considering the following factors: The methodology/guide takes into account the position of the Business unit in the Value Chain (Browne, 1995) and sets the stages which should help value creation (Porter, 1980). A diagnosis or input stage is used to analyse the factors (Gunn, 1987). In this stage GRAI Grid (Doumeingts, 1992) and DGRAI (Poler et al, 2002)

analytical tools support the analysis of the Current System and the Future System. The diagnosis contributes to choosing the content of the strategy (Gunn, 1987) and defining or formulating the strategy (Platts, 1990). The diagnosis also contributes to monitoring the advantages/disadvantages of the future decision system related to Information technology (hardware and software specifications), manufacturing technology (tools and equipment specifications) and organisation (physical system and management structure).

After that, a deployment stage of the formulated strategy is set (Feurer, 1990).The deployment is a projectoriented task (Marucheck et al, 1990), where a process of monitoring and reviewing to facilitate the alignment of the organisation to the strategy is set (Kaplan et al, 2001). The full framework is illustrated in Figure 3.

Change drivers: Value Creation ( Porter, 1980) Scope: The Business Unit ( Kaplan et al, 2001) considering the position in the Value Chain (Browne, 1995) Purpose: Better performance through process reengineering (Hammer et al, 1993)

Dynamic strategy management process (Acur, 2000) Operational Strategy Formulation (Platts,1990)

Diagnosis (Gunn, 1987)

Strategy Deployment (Feurer, 1995) -Project oriented task (Marucheck et al,1990)

GRAI Method (Doumeingts,1992) -Analysis of Current/Future decision system through GRAI Grid (Doumeingts, 1992) and DGRAI ( Poler et al, 2002) - Future System specifications

Monitoring/Reviewing (Kaplan et al, 2001) -Balanced scorecard system (Marucheck et al,1990)

Figure 3: Schematic representation of the methodology/guide and factors to be considered

6 Theory testing: empirical study Supply Chain Presentation and methodology/guide adapted for the case studies The Main Subcontractor, which led the supply chain improvement, belongs to a Spanish industrial group devoted to design, manufacturing and assembly of lifts and escalators. In order to ease the comprehension of the case study, the main characteristics of the external supply chain (distributors´ and suppliers´ network) and the internal supply chain (materials warehouses and manufacturing plants) are described (Figure 4) in this section:

External Supply Chain

Manufacturing Suppliers Plant

Warehouse

Internal Supply Chain

External Supply Chain

Main Subcontractor

Distributors Assemblers

Warehouse

Plant

Construction Site

Engineer to Order Replenishment Planning and Inventory system

Figure 4: Internal and external supply chain considered in the case study

External distributors´ Supply Chain: the modules and subsystems of the lifts are delivered by distributors to the construction site where they are assembled.

Internal Supply Chain: The production of the Main Subcontractor is planned when the design team has finished the engineering stage of each customized lift or escalator. Thus, the manufacturing plants work as EOPS. The manufacturing plants processes are based on mass customization concepts, which try to exploit the advantages of mass production with the customization of the product for each customer. For this purpose the product and the process have high modularity and commonality that allows a high customization, combining different parts or modules in the final part of the process (assembly).

External suppliers´ Supply Chain: The suppliers are classified taking account of logistic volume or weight per supply unit, number of references, supplier distance and value per supply unit, as J.I.T. volume suppliers, J.I.T. module suppliers, traditional Make to Order suppliers and traditional Make to Stock suppliers (Figure 5).

SUPPLIER J.I.T. VOLUME CLASIFICATION SUPPLIER

J.I.T. MODULE SUPPLIER

FACTORS

TRADITIONAL MAKE TO ORDER SUPPLIER

TRADITIONAL MAKE TO STOCK SUPPLIER

LOGISTIC VOLUME OR WEIGHT PER SUPPLIED UNIT NUMBER OF SUPPLIED REFERENCES DISTANCE TO THE O.E.M. LOCATION

VALUE PER SUPPLIED UNIT

Figure 5: Suppliers´ classifications taking into account some logistics factors

The company of the industrial group tried to gain a sustainable competitive advantage. For this purpose, the research group aided them to apply the methodology/guide to the companies or Business Units (Figure 6). In the diagnosis stage the GRAI grid and DGRAI tools to analysis the Current System and design the Future System were used. The Operational Strategy defined was to improve customer service (reduce delivery date and increase order fulfilment) and improve the total cost of the chain through a redesign of the production and inventory planning system of the Main Subcontractor and suppliers´ network. The implementation of the future system was monitored with key performance indicators of Customer Service (Delivery date, Order fulfilment) and Cost (Stock).

Change Drivers: Service quality and cost competitive factors Scope: Main Subcontractor manufacturing plants and suppliers Purpose: Better performance through process reengineering

Dynamic strategy management process: managementprocess Diagnosis

Operational Strategy: Quality service improvement Total cost reduction

GRAIMethod

StrategyDeployment - Future Operational planning System implementation MonitoringReviewing

- Analysis of Current/Future Operational Planning System and suppliers/customers integration Through GRAI Grid and DGRAI - Future System specifications

-Key performance indicators: Product delivery date Customer Order Fulfilment Stock Turnover Logistic and production total lead time

Figure 6: Schematic representation of the methodology/guide adapted to the Case Studies

Supply Chain Current system analysis (As IS) and Future System design (To BE) To analyze the production and inventory/material planning current system of the internal supply chain and the suppliers´ network (As IS), the decision system was monitored using GRAI Grid. The GRAI Grid showed the main characteristics (decision levels, decision centres, planning periods, planning frequency, decision alternatives, information,).

The production and inventory/material planning is concerned with balancing supply and demand. It tries to keep the material flow and the value added activity in manufacturing going on without interruptions. In the case study, the production and material planning system worked as make to order once the engineering stage was done. It was a every two days based fix order point system called “D+20:2”, because the O.E.M. manufacturing plants supply to the distributors the orders received in the day “D”, 20 days later. Thus, the planning period was of two days and the planning horizon of twenty days. When monitoring the GRAI Grid a policy constraint was detected. The whole flow of materials was limited by the master production scheduling (MPS) decision level. In this decision level, the planning period and planning horizon of the master production scheduling had a great impact on the system lead time and consequently on the delivery date and on stocks needed to go on without interruptions.

Thus, the analysis and design stage of the future system was set around the alternatives of reducing the planning period and the planning horizon of the MPS. In particular, “D+13; 2” planning system, with a planning period of two days and a planning horizon of thirteen days, was analysed. The other alternative was “D+13:1”, with a planning period of one day and a planning horizon of thirteen days. These replenishment systems could be expected to perform better, because the period and planning horizon were reduced. In theory, the new system could work with less work in process, because it supposed a quicker response of the manufacturing plants to the construction site.

Nevertheless, in order to analyze the feasibility of the future system, the information technology, manufacturing technology and organisations of the internal and external suppliers/customers´ network critical factors and other efficient supply systems ( cross docking, milk run,...) were monitored (Figure 7) D+20:2 vs D 13:2 D+20:2 vs D13:1

INTERNAL SUPPLY CHAIN

EXTERNAL SUPPLY CHAIN

INFORMATION TECHNOLOGY

•Production order generation in Main Subcontractor • Purchasing order generation and submission to suppliers

•Suppliers order reception

MANUFACTURING TECHNOLOGY

•Lot or Batch size in the production system •Bottlenecks efficiency •Work in process

•Lot or Batch size in the suppliers´ production system

ORGANISATION

•Plant Manufacturing Pull System •Parts and Raw materials stored in Main Subcontractor warehouses •Efficiency of the Planning System.

Management time •Efficiency of the Inventory System.

Management time

•Parts stored in suppliers´ finished products warehouses •Efficient supply system from suppliers (Milk Run with third party logistics)

Figure 7: Critical information technology, manufacturing technology and organisation factors taking into account when implementing the Future system

When analyzing the efficiency to operate with the future planning and inventory/material system, DGRAI tools allowed monitoring, if there were bottlenecks or capacity problems in the production planning and inventory/material management teams and also the total quality of the future system. In order to compare the dynamic behaviour of both systems, a simulation of one year was performed. The conclusions were: - Both planning systems were correct from the point of view of supply coordination. The simulation did not evidence synchronization problems between internal and external supply chain.

- Regarding the manpower consumption, “D+13:2” planning system used a every two days recalculation of the Master Program (consequently the same period for programming and ordering), versus the “D+13:1” planning system that used a daily recalculation. The simulation showed that the “D+13:1” uses a 40% more of hours of decision makers than the “D+13:2”. Therefore D+13:1 was more expensive than D+13:2 from the point of view of manpower cost.

- Concerning the impact of the human resource capacity in the decision system performance, an interesting indicator is the quantity of decisions in the queue of decision makers over the time. Both planning systems had a similar behaviour concerning the maximum number of decisions in queue, but the queue time was higher in “D+13:1”, the average number of decisions in queue is a 50% higher in “D+13:1” than in “D+13:2”. In particular the Planning Chief of the internal supply chain was overloaded all the time in “D+13:1”.

- With regard to the evolution of the Total Quality of Decision System (TQDS) indicator, “D+13:1” was a 4% better in mean than “D+20:2”. But the most important was that “D+13:1” is a 15% better in minimum than “D+20:2”.

TQDS was calculated as the weighted mean of the quality of decisions at a given moment. The quality of a decision depends on the quality of information used and the quality of the decision maker and decreases with time (until its regeneration).

Results in terms of effectiveness

The Escalators and Lifts business units´ managers balanced the advantages/disadvantages shown by the GRAI tools and decided to implement the new production and inventory/material planning system. The performance of the future production and material/inventory planning system were set in quantitative planning parameters such as days of stock reduction and customer service. Two years after the starting up of the reengineering process, due to the new production and material/inventory planning system the outstanding changes were: -

35% of delivery date reduction and 10 % increase of order fulfilment to the assembly site

-

30% of work in process reduction in Main Subcontractor

-

30% of stock reduction in J.I.T. module suppliers’ warehouses in Main Subcontractor

-

20% of stock increase in Make to order suppliers forced to work as assemble to order from a new decoupling point

-

30% of stock reduction of Make to Stock suppliers parts in Main Subcontractor warehouses.

7 Conclusions The main conclusions related to the aim of the paper are:

•

The multidisciplinary team involved in the reengineering project have found that GRAI grid and DGRAI management tools are very useful for the Supply Chain improvement in EOPS environment

•

Related to the operational integration between suppliers and Main Subcontractor the profits from stock reduction could be obtained in suppliers/customers warehouses or in Main Subcontractor warehouse. Thus, a benefits/efforts analysis and negotiation is needed in both cases.

The authors of this paper suggest that future research could be done in the following areas: •

The best contracting practices that allow better collaboration among subcontractors and suppliers in a project based production system that covers a range of goods or services to be provided and the type of agreements of suppliers¨capacity levels

•

The impact of suppliers location when supplying complex modules in sequence and synchronize production to meet short response times and the alternatives to decouple the suppliers with longer transit periods

•

Orders smoothing and levelling in Engineer to Order Production systems. Once the orders are designed they could be “buffered” and try to satisfy different customer delivery date needs ( export orders, regional orders, ..) while levelling the capacity of the manufacturing plant.

•

Extending the GRAI Method to other Engineer to Order production systems analysis

REFERENCES Acur, N. and Biticci, U. (2000), Active assessment of strategy performance in proceedings of the IFP WG 5.7, International Conference on Production Management, Tromso, Norway.

Anumba CJ, Baugh C, Khalfan MA. Organisational structures to support concurrent engineering in construction. Ind Manage Data Syst 2000;102:260–70.

Anumba CJ, Siemieniuch CE, Sinclair MA. Supply chain implications of concurrent engineering. Int J Phys Distrib Logist 2000; 30 (7/8):566-97 Badr Haque. Problems in concurrent new product development: an in-depth comparative study of three companies. Integrat Manufact Syst 2003;14(3):191–207.

Browne, J. Sackett, P.J. and Wortmann, J.C. (1995), Future Manufacturing Systems-towards the extended enterprise, Computers in Industry, Vol.25, pp.235-254.

C. Prahalad y G. Hamel. “ The Core Competence of the corporation” 1990 Harvard Business Review Chan Albert PC, Fan Linda CN, Yu Ann TW. Construction process reengineering: a case study. Logist Inform Manage 1999;12(6):467–75.

Christopher M, Towill Denis. An integrated model for the design of agile supply chains. Int J Phys Distrib Logist Manage 2001;31/4:235–46.

Doumeingts, G. (1984), Méthode GRAI: Méthode de conception des systémes en productique, Thése d'état : Automatique: Université de Bordeaux .

Doumeingts, G. (1984), Méthode GRAI: Méthode de conception des systémes en productique, Thése d'état : Automatique: Université de Bordeaux .

Doumeingts, G. Vallespir, B. Zanettin, M. and Chen, D., (1992), CIM: GRAI integrated methodology a methodology for designing CIM systems, GRAI/LAP, Universite Bordeaux, Version 1.0.

Doumeingts, G. Vallespir, B. Zanettin, M. and Chen, D., (1992), CIM: GRAI integrated methodology a methodology for designing CIM systems, GRAI/LAP, Universite Bordeaux, Version 1.0.

Errasti A, Oyarbide A, and Santos J. How to gain competitive advantage through construction process reengineering. In: Proceedings of FAIM 05 international conference on flexible automation and intelligent manufacturing, June 2005, Bilbao, Spain.

Errasti A, Oyarbide A, Beach R, Santos J. A process for developing partnerships with subcontractors in the construction industry: an empirical study. Int J Project Manage 2006.

Errasti A., Oyarbide A., Eguren JÁ. And “ Engineer to Order Production Systems improvemente based on GRAI Methodology: an empirical Study » Proceedings of 14th Euroma International Conference 2007, Ankara, Turkey Errasti A, Beach R and Apaolaza U “ Close coupling value chain functions to improve subcontractor manufacturing performance “ Int J Project Manage 2008.

Errasti A., Poler R., Oyarbide A. and Santos J. “Supply chain improvement based on GRAI Method: an empirical study” Proceedings of 13th Euroma International Conference 2006, Glasgow, Great Britain Feurer, R. Chaharbaghi, K. and Wargin, J. (1995), Analysis of strategy formulation and implementation at Hewlet Packard, Management Decision, Vol.33, No.10, pp.4-16.

Gunasekaran A, Love PED. Concurrent engineering a multi-disciplinary approach for construction. Logist Inform Manage 1998;11(5):295–300.

Gunn, T.G. (1987), Manufacturing for Competitive Advantage: Becoming a World Class Manufacturer, Ballinger Publishing Company, Boston M.A. Hoekstra S. and Romme J. “Integrated Logistics Structures: Deveolping Customer Oriented Goods Flow” (1992) Mc Graw-Hill, London H.S.Jagdev and J.Browne.” The extended Enterprise-a context for manufacturing”.1998 Production Planning and Control Vol 9 No 3 pp. 216-229 Huan Neng Chiu – “The integrated logistics management system: a framework and case study” 1995 International Journal of Physical Distribution & Logistics Management, Vol. 25 No. 6 4-22 Int J Project Manage 2002;20:119–26.

Jennifer Rowley “ Using Case Studies in Research” 2002.Management Research News Vol 25 No 1 Kaplan, R.S. and Norton, D.P. (2001), The Strategy Focused Organization, Harvard Business School Press, Boston Massachussets.

Kolltveit BJ. The importance of the early phase: the case of construction and building project. Int J Project Manage 2004;22:545–51.

Mahmoud-Jouini SB, Midler C, Garel G. Time-to-market vs. time-todelivery: managing speed in engineering, procurement and construction projects. Int J Project Manage 2004;22(5):359–67 Marucheck, A. Pannesi, R. and Anderson, C. (1990), An exploratory study of the manufacturing strategy in practice, Journal of Operations Management, Vol.9, No.1, pp.101-23.

Ngowi AB. Construction procurement based on concurrent engineering principles. Logist Inform Manage 2000;13(6):361–8.

Paul Coughlan and David Coghlan “ Action Research: Action research for operations management”.2002.International Journal of Operations and Production Management Vol 22 No 2 pp. 220-240 Olhager J « Strategic positioning of the order penetration point » (2003) International Journal of Production Economics, Vol 85 No 3 pp. 319-29 Platts, K.W. (1990), Manufacturing audit in the process of strategy formulation, PhD dissertation, University of Cambridge, Cambridge.

Poler, R. and Lario, F.C. (2001), Simulation using the Dynamic Model of Decision Systems, International Conference on industrial Engineering and Production Management (IEPM), Quebec IEEE Press, pp.1004-1012.

Poler, R. Lario, F.C. and Doumeingts, G. (2002), Dynamic Model of Decision Systems (DMDS), Computers in Industry, Vol.49, pp.175-193.

Poler, R. Lario, F.C. and Doumeingts, G. (2002), Dynamic Model of Decision Systems (DMDS), Computers in Industry, Vol.49, pp.175-193.

Porter ME. Competitive advantage. New York: The Free Press; 1985.

Porter ME. Competitive strategy: techniques for analyzing industries and competitors. New York: The Free Press; 1980.

Robert E.Spekman, John W.Kamauff jr and Niklas Myhr.” An empirical investigation into supply chain management a perspective on partnerships” 1998.International Journal of Physical Distribution and Logistics Management Vol 28 No 8 pp.630-650 Roy Westbrook “ Action Research: a new paradigm for research in production and operations management”.1995.International Journal of Operations and Production Management Vol 15 No 12 pp. 6-20 Wikner J. And Rudberg M. (2005) « Integrating production and engineering perspectives on the customer order decoupling point ».

2005 International Journal of Operations and Production Management Vol 25 Np7 pp. 623-640 S.J.Childe. “ The extended enterprise-a concept of cooperation”1998 Production Planning and Control Vol 9, No 4 320-327 Salvador, F., Rungtusanatham, M., Forza, C. And Trentin, A., Understanding synergies and trade-offs between volume flexibility and mix flexibility in Build-to-Order strategies. Proceedings of 12th Euroma International Conference 2005, Budapest, Hungary Schermerhorn J. Management for productivity. New York: Wiley; 1993.

Slack N, Chambers S, Johnston R. Operations management. London: Sage; 1994.

Slack, N., Chambers, S. And Johnston, R.(2004) “Operations Management”, 4th ed., Pearson, London Söderlund J. On the broadening scope of the research on projects: a review and a model for analysis. Int J Project Manage 2004;22:655–67.

Thomas S. Contractors risk in design, novate and construct contracts.

Vignalli “The marketing management process and heuristic devices: an action research investigation”.2003.Marketing Intelligence and Planning Vol 21 No 4 pp-205-219 Voss, C., Tsikriktsis, N. and Frohlich, M. (2002) “ Case Research in operations management”. International Journal of Operations and Production Management Vol 22 No 2 pp.195-219 Yin, R.K. . Case Study Research: Design and Methods. Sage Publications, London, 1994 Zhenxin Yu, Hong Yan & T.C. Edwin Cheng – “Benefits of information sharing with supply chain partnerships” 2001 Industrial Management & Data Systems 101/3 114-119