Product–machine qualification using a process flexibility strategy considering capacity loss

Due to uncertainties in future demands regarding product variety, manufacturers must maintain a balance between capacity investment costs and future demand satisfaction levels, which makes capacity management challenging for a high-value asset industry. Product–machine qualification, which is an essential process in configuring machines to produce new products, plays an important role in allocating appropriate capacity to different products. Motivated by the challenges presented by this real-world trade-off problem, this article develops effective “product–machine” production structures by introducing new process flexibility strategies. The product–machine qualification process is complex and very time-consuming, which generally causes processing machines to experience massive capacity loss. The more flexible a machine is, the more product–machine qualification steps are required and the more capacity will be lost. Traditional process flexibility strategies, such as the long chain strategy, cannot be used directly for product–machine qualification decisions because they all assume that the capacities of machines are constant and that only product demands vary. This article promotes the traditional process flexibility theory by introducing capacity loss into the model. The proposed strategies for balancing process flexibility and capacity loss have proven effective in satisfying uncertain demands by cost-effective capacity-demand matching structures.