This study aimed to apply DEA(data envelopment analysis) method to analyze the development and operations efficiencies of product lines in an automotive components manufacturing company. DEA method was primarily used to evaluate relative efficiencies ...
This study aimed to apply DEA(data envelopment analysis) method to analyze the development and operations efficiencies of product lines in an automotive components manufacturing company. DEA method was primarily used to evaluate relative efficiencies of not-for-profit organizations or programs. However, this study has show that DEA is successfully applicable to the manufacturing companies. As for DEA input factors, production line space and number of workers were selected to reflect operations management. Development lead time, total development investment, and the newness of development technology employed were selected to reflect development effort. Yearly sales amount, production capacity, number of different cars the product lines fit, quality cost claimed and line stop hours at the auto makers assembly lines due to the unsatisfactory deliveries were selected as for DEA output performance factors. 30 product lines were investigated and 12 of them turned out to be inefficient, and 7 of those 12 were under 80% efficiency. However, we could make a conclusion that most of the product lines performed their best or near best technical efficiencies. Those inefficient product lines were distinguished with the reference of efficient dominant product lines. In addition, the amount of slacks for each input factor was computed by the sensitivity analysis of DEA. All these DEA results were utilized to improve the production effciencies of the inefficient product lines. Cost reduction, quality improvement, development ability improvement, and specialization were recommended for each inefficient product lines. Also, those results can be benchmarked for the new product development project in planning lead time, investment amount and new technology to employ. Solvers in Microsoft Excel was used to solve many LP problems in DEA method. We should note here that Excel Solver was very convenient in data manipulation solving LP problems.