Principles of Logistics Management

Level Production Strategy

A pure service industry, such as a law firm may use this strategy in legal process outsourcing, where growth comes from new client markets through development of low-cost efficient solutions for new segments in the legal marketplace. Moreover, outsourcing may help produce the aggregate plan to sustain a steady production rate of the service thus ensuring that customer demand is met. If the amount of work level is low, then the firm may shelf outsourcing until demand goes up (Arlbjørn, Freytag, & de Haas, 2011).

However, the peculiarity of services poses a problem in applying the level production strategy. It becomes difficult to ascertain a unit of a given service and its cost. Moreover, the pricing of services is based on value rather than on cost. Customers and competition determine the value of the service. In service delivery, there is no inventory and unused capacity is lost out and cannot be recovered back whatsoever (Arlbjørn et al., 2011).

Lean Production and Six Sigma Quality Tools

These tools are systematically used in the analysis of processes to mitigate process variation. Capability analysis could thus be used to maintain suitable production specifications as well as predicting the actual results. Capability analysis improves supply chain management by removing variations from the production process through defects and waste elimination (Oakland, 2014). Further, it enables the production team to understand what suppliers produce what parts and to simulate scenarios to find out the effects of disruptions, delays and material shortfalls to output.

The production team thus decides to increase or adjust redundancy or capability across the supply chain partners. Moreover, capability analysis improves supply chain management by allowing gap and vulnerabilities identification before an adverse event can occur thus laying in place contingency plans and controls to avoid the undesired results (Oakland, 2014). Product durability and reliability is thus enhanced reducing the frequency of product replacement as well as reducing the environmental effects experienced in meeting the consumer need.

 

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