High Mix Low Volume from High Volume Low Mix - which model is better?
Manufacturers of electronic equipment must constantly look for a golden means that combines high reliability, low production costs, high quality and shorter production time. In practice, we distinguish two basic approaches to production that try to put the above factors in an appropriate hierarchy. We distinguish between two types of production: High Mix Low Volume and High Volume Low Mix.
What is the Low Mix High Volume model?
It is still a dominant model in most electronics manufacturing companies. It is a serial production, which focuses on producing a large number of copies in the shortest possible time. Such a model is primarily concerned with high quality, but it places lower production prices over the reliability of its products. At the same time, this model ignores individual customer needs. Smaller orders requiring changes to the production line are relegated to the background as the company focuses primarily on mass production.
Of course, such companies can boast more customers. All thanks to the shorter time needed to produce the next series of products. Changes are introduced much less frequently here, which translates into lower reliability resulting from less frequent removal of observed errors and production imperfections. Classic mass model.
What is the High Mix Low Volume model?
In this model, individual customer’s needs are put first. Therefore, the company often introduces changes to the production process in order to adapt its products to the needs of customers. This, however, translates into a much smaller quantity of products in one series. As in the LMHV model, high-quality workmanship is a priority here. The difference is that the HMLV model puts reliability in second place at the expense of higher production costs. Thanks to this, High Mix Low Volume companies are famous for their long-lasting and failure-free products.
Taking care of greater satisfaction of all customer groups has its limitations. In such companies, it is difficult to maintain the production rate typical of the LMHV system. Lower product volumes combined with higher production costs translate into lower profits. However, it is a model aimed at building a reliable brand that attracts regular customers for years.
HMLV or LMHV - which model is better?
From the manufacturer's perspective, the Low Mix High Volume model seems better, as it allows you to maximize profits and reduce production costs. From the customer's perspective, companies operating in the High Mix Low Volume model are better, as they limit the mass production in order to obtain greater equipment reliability. In practice, companies should of course aim for the High Mix High Volume system, but in practice, it is extremely difficult, if not impossible. There is always a situation in which you have to make a decision - focus on fast production or limit the effort in order to introduce further changes and improvements.