Interactions of production strategies and a production system's performance - An analysis of the influence of production strategies on the final unit costs of lithium-ion batteries

摘要

Future-oriented industrial companies are reliant on the continuous expansion and adjustment of their business units to new markets. The profitability of such new business units is therefore often linked with high investments and characterized by high uncertainty regarding the competitiveness of the produced product and the company's production system. In this context, a company's production strategy plays a crucial role because it can be seen as a blueprint for the development of the production system. A production strategy consists of four sub-strategies that address the location of a production system, the way capacities are increased, the product portfolio manufactured and the depth of vertical integration. Any modification or combination of these sub-strategies affects the production system at multiple places and in different ways, making it extremely difficult to predict the overall effect on the performance of the production system. Similarly, the resulting unit costs of a product produced by this production system are difficult to predict and it is hard to say whether the company would be competitive in a new market. This article analyzes the interactions between different production strategies and their impacts on the final unit costs of lithium-ion batteries. A stock and flow model is constructed based on a qualitative system dynamics model that describes these interactions. The model shows the impacts of the analyzed production strategies in different scenarios. Finally, first insights into the benefits and disadvantages of specific sub-strategies can be given that depend on the overarching market for electric vehicles.