Development of parts manufacturing strategy based on identification of manufacturing capabilities, resources and make-or-buy analyses

Abstract

This thesis examines Konecranes' spare parts operations in Finland and seeks to create the preconditions for developing the spare parts manufacturing strategy further. The research consists of two entities: identification and analysis of existing manufacturing capability, and the current make-or-buy process identification and the process development. As a mixed-method case study, the thesis examines the underlying phenomena as part of the Konecranes spare parts organization. The research is based on various interviews, observations and numerical product and manufacturing data analyzes. Based on the data analyses, it is possible to answer the questions what the organization’s existing manufacturing capabilities are to maintain a successful spare parts business and what are the factors that based on the make-or-buy decisions are done in the organization. The term of manufacturing capability includes essentially the concepts of speed and punctuality of the deliveries, flexibility, quality and cost. The overall performance of an organization's manufacturing system depends on how well the above-listed performance objectives are met. In addition, the organizing of the manufacturing resources must take into account the specific features of the particular business being carried out. In connection with this research of spare parts business, the specific features are related to the urgency of the customer needs and to the punctuality of deliveries. Hence, make-or-buy decisions must also be made by focusing on these features. From these starting points, this research identified the optimal products for Konecranes Finland’s spare part manufacturing unit. On the other hand, the challenging products for the spare part manufacturing unit were identified. In addition, based on the analysis of current operating models, the strategical make-or-buy decision process was developed.