Definition of high variety, low volume
This problem concerns the lack of a clear
definition of what exactly constitutes HVLV.
It can be argued, for example, that both aircraft
and heavy earth-moving equipment
manufacture are HVLV in character. However,
a brief analysis will reveal that there are
fundamental differences between these sectors.
The most obvious are volume and product
complexity. Generally, there are marked
differences both in aggregate volumes and
product complexity for typical manufacturers
of these products. Aircraft are generally made
in far lower volumes and thought to be more
complex than earth-moving equipment. Also
significant are the differences in industry
structure which determine both customer and
supply chain relationships.
As noted in Table I, the degree of vertical
integration can vary from low to high within
the same sector. This may be either as a result
of strategic choice or through the inherent
structure of the industry. This is well illustrated
by the aircraft industry which has evolved such
that there now exist specialist engine manufacturers
and avionics providers who supply to
airframe makers and final assemblers. Equally,
there are earth-moving equipment and tractor
manufacturers who have chosen consciously to
retain core component manufacturing capabilities
since these are seen as levers for competitive
advantage. Collectively, therefore, these
subtleties of volume, product complexity,
industry structure and supply chain relationships
make the task of devising generally
applicable lean manufacturing strategies for
HVLV situations all the more complicated.