What can a company do to make its production of a complex product more efficient and cheaper?

What can a company do to make its production of a complex product more efficient and cheaper?

• A. This can also be done by using a flexible manufacturing system (modular cell production)
• B. Outsource all production
• C. Increase the number of suppliers
• D. Buy in standardised components and sub assembled parts

Answer: (D)

Standardising components and using sub-assembled parts reduces the number of custom parts the factory has to produce, which lowers complexity, setup time, and overall cost. When you buy in standard parts and modules, suppliers can produce at scale, bringing down unit costs and improving consistency. This approach also speeds up assembly because the product can be built from ready-made modules, and it makes it easier to manage variants without retooling the entire line. Other options can help in certain situations, but they don’t address the cost drivers as directly. Outsourcing all production shifts responsibility to external parties and can introduce risks and hidden costs. Increasing the number of suppliers adds management overhead and potential quality and coordination problems. A flexible manufacturing system can improve efficiency, but it often requires significant upfront investment and may not be the best fit for very complex, highly customized products.

Standardising components and using sub-assembled parts reduces the number of custom parts the factory has to produce, which lowers complexity, setup time, and overall cost. When you buy in standard parts and modules, suppliers can produce at scale, bringing down unit costs and improving consistency. This approach also speeds up assembly because the product can be built from ready-made modules, and it makes it easier to manage variants without retooling the entire line.

Other options can help in certain situations, but they don’t address the cost drivers as directly. Outsourcing all production shifts responsibility to external parties and can introduce risks and hidden costs. Increasing the number of suppliers adds management overhead and potential quality and coordination problems. A flexible manufacturing system can improve efficiency, but it often requires significant upfront investment and may not be the best fit for very complex, highly customized products.