Production ramp up in built‐to‐order supply chains

Purpose – This paper aims to focus on production ramp up modeling on built‐to‐order (BTO) manufacturers facing customized demand. The general purpose is to present a novel approach to managing collaboration, by considering information exchange between the manufacturer and the supplier. Design/methodology/approach – The methodology applies feedback control mechanism to analyze supplier responsiveness and customer order decoupling point to represent the need for collaboration. A two‐stage game is applied ahead of control system application to optimize the capacity decision, with the ultimate goal being profit maximization. Findings – The results show that a higher product commonality degree gives more opportunity for quick response BTO supply chains, which are managed by feedback control, and at the same time to possibly mitigate the bullwhip effect caused by demand information noise. Research limitations/implications – The analytical model here focused on one product family development, so the applicability of the proposed model to the whole product portfolio should be investigated in the future. Practical implications – This paper helps the manufacturer to act optimally by considering the possibility of information exchange with the supplier and deciding on the product commonality degree, in taking into account the customer's lead time requirement. Originality/value – A control system model of “BTO Supply Chain” is proposed by including product commonality and response analysis in the simulation model. Furthermore, a contribution to collaborative supply chains is shown by applying a synchronized supply model to represent supplier and manufacturer communication.