Modeling of the Competitive Management Efficiency

DANIELA GHELASE, LUIZA DASCHIEVICI

“Dunarea de Jos” University of Galati

ROMANIA

Abstract: - The dynamic changes and the overall progress of society are reflected at company level by many orders in

number, small in volume, very diverse, obtained through frequent auctions with short- term response, which leaves no

time for a relevant analysis of said orders. As a result, a long-term management is not appropriate. A sort of fluctuating

(just like the market) on-line, fastly responsive, prompt and rapid, however, ephemeral management is called for.

In this paper it is considered that a solution for this situation is competitive management. The conventional

management is based on the minimum cost, while the competitive management is based on the market success of

manufacturing product. The paper presents a numerical study of the competitive management efficiency by

comparison to the conventional management.

Key-Words: - Competitive management, manufacturing system, management efficiency, cutting process, econometric

control, market-manufacturing system assembly.

1 Introduction

According to the literature, a company is competitive

on a certain market when it succeeds to reach, up to an

acceptable level, some economic indicators: turnover,

profit, market share comparable or superior to that of

other competing companies acting on the same market.

Many approaches to the problem of competitiveness

[1], [2] show that, today, competitiveness is defined by

the economic factors and indicators and is more a

suggested/induced notion than a numerically evaluated

one.

However, approaches are of economic and managerial

nature, while the relationship with the technical

aspects of competitiveness is less noticeable. At this

point there is no algorithm to evaluate the technical and

economic competitiveness, moreover, the technical

factors are not considered, although consumption and

costs incurred by the manufacturing processes are

generated by technical actions.

In this context, the notion of competitiveness gains

new valences, including factors and policies that

determine the ability of the enterprise to get a favorable

place on the market, to maintain that place and to

continuously improve its position. Only in this way the

competitiveness fully and synthetically characterizes

the enterprise viability.

In this paper, competitiveness will be understood as

the capacity (potential) to provide performance

(compared with other similar elements), in a very

punctual way, within a macroeconomic concrete context

and at a certain time.

The manufacturing system performance depends on

how it is controlled. In more specialized papers [3]

references are made to the relationships between the

parameters of the cutting processes and the technical

performance of the manufacturing system (i.e. purely

technical aspects), while in others, equally numerous

[4], references are made to the relationship between the

product made by the manufacturing system and the

market (i.e. economic relations) [5].

In the literature no attempt to approach the whole

market - manufacturing system assembly is reported,

despite there are significant resources to improve

performance which are not used because the technical

and economic aspects are dealt with separately.

Also, it is not known an algorithm for the management

of the market – manufacturing system assembly, but

only algorithms for the technical control of the

manufacturing system [6] and tools of economic

management of the relationship between the enterprise

as a whole and the market.

Nowadays, the manufacturing systems are controlled

by means of numerically programmed machine tools

which are part of the system [7], [8]. The control is

exclusively technical because there is no economic

variable, although this is actually the ultimate goal of

any manufacturing process. The dynamic changes and

the overall progress of society are reflected at company

level by many orders in number, small in volume, very

diverse, obtained through frequent auctions with short-

term response, which leaves no time for a relevant

analysis of said orders. As a result, a long-term

management is not appropriate. A sort of fluctuating

(just like the market) on-line, fastly responsive, prompt

and rapid, however, ephemeral management is called

for [9], [10].

The above considerations underline the relevance of

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DOI: 10.37394/23205.2022.21.10

Daniela Ghelase, Luiza Daschievici

E-ISSN: 2224-2872

Volume 21, 2022

introducing of the new concept - the concept of

competitive management – it is proposed by this paper.

This concept will have the following core features:

1. an essential character, promptness, accuracy and

completeness in assessing how the manufacturing

system operates at the current moment so as to ensure

responsiveness and dynamism in its current relationship

with the market;

2. behavioural modeling of the market-manufacturing

system assembly to substantiate the strategic component

of the competitive management thus ensuring the

extension in time of the current performance;

3. possibility of changing consumptions in terms of level

and structure (cost-productivity - process relationship),

under equivalent technical conditions, by the

intervention on the technology components to

implement the tactics component of the competitive

management, thus tailoring manufacturing system to the

current market requirements;

4. use to the full the amounts invested in the system

operation to ensure the management optimization;

5. possibility to act proactively on the manufacturing

system to ensure the management adaptability;

6.possibility to anticipatorily evaluate the

manufacturing system to ensure the management

predictability.

It is obviously that, when applied to manufacturing

systems, the concept of competitive management can

offer solutions to make it more competitive and develop

even the enterprises as a whole.

Models currently used in the management of the

manufacturing systems, whether analytical, numerical

or neural (or, in general, algorithmic), refer to the

components of the systems. Building models in all

cases is based on off-line experimental investigation of

an element, making up a set of experimental data and

using it to select, out of a given family of models, the

most appropriate model.

There are no cases reported in literature of behaviorly

modeled systems where, by monitoring the current

operation of the manufacturing system concerned, to

extract on-line knowledge which relates to the

interactions taking place in said manufacturing system,

although, for a competitive management, it is in fact

required to model the interaction between the system

components. The competitive management of the

manufacturing systems will be developed based on

behavioral modeling, which will describe the

interaction between elements, namely machining

system, manufactured products and market.

In the model proposed by this paper, the market

behaviour is considered unchanged. The manufacturing

system receives contracts after the tenders

(competitions) generated by the market requests and

antreprised offer.

In this paper it is proposed a numerical study of the

competitive management efficiency by comparison to

the conventional management.

The paper has the following structure: section 2

presents the proposed econometric modelling, section 3

contains the results of simulation and section 4

summarizes the main conclusions achieved.

2 Modeling of the Competitive

Management Efficiency

The conventional management is based on the minimum

cost, while the competitive management is based on the

success of manufacturing product on the market.

The competitive management is more efficient

according as the profit increases. This management

exploits the efficiency resources of the manufacturing

system. In this context, the model of the competitive

management efficiency was carried out.

The econometric model has as input the process

characteristics, as outut the “service” characteristics,

while as parameters the machining system-market

relationship characteristics. In figure 1 it is presented

the generic econometric model, where the cutting speed

v is the process characteristic, the cost c, the time τ, the

profit rate r (for three levels of the price - P1, P2, P3) are

the service characteristics while the machining

operation price P is the model parameter. In this figure,

R curve is the maximum profit rate versus the price P.

Fig. 1 Econometric model of the manufacturing system

Service characteristics of the econometric model

developed in this paper are:

- cost c;

- time τ;

- profit rate r;

The cost, c, is defined as

[Euro/cm2] (1)

where:

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DOI: 10.37394/23205.2022.21.10

Daniela Ghelase, Luiza Daschievici

E-ISSN: 2224-2872

Volume 21, 2022

C – it is the expenses of manufacturing process:

salaries, tool cost, tooling allowance cost, energy cost

and machine-tool cost;

S - the machined surface area.

Consequently, the cost is given by the following

relation:

γ−β−α

ττ

⋅

+τ

tsv

K10

vs10000

cK 10

Tvs10

vs10

matssr

[Euro/cm2] (2)

where:

cτ – it is the sum of all expenses directly proportional

with the time;

τsr- time needed for the tool change and adjustment of

the tool [min];

cs- tool cost between two successive reshaping;

cmat – tooling allowance cost;

ce – cost of 1Kwh electric energy;

Ke- energy coefficient [wh/min];

KM - machine-tool coefficient;

CM - machine-tool cost [Euro];

v – cutting speed [m/min];

s – feed rate [mm/rot];

t – depth of cut [mm];

α, β, γ – coefficients;

T – tool durability, given by the Taylor relation.

The necessary time, τ, for 1 cm2 surface area

machining is calculated with the formula:

Tvs10

τ+

=τ

[min/cm2] (3)

Another service characteristic is the profit rate, r, and

it is defined by the following relation:

−

=cp

[Euro/min], (4)

where p is specific price, [Euro/cm2].

As shown in figure 1, if the cutting speed v is constant

in time, getting the value vct, then it will be optimum for

a certain price (P1) because the obtained profit will be

maximum. For another price (P2 or P3), v = vct is not

optimum, resulting a profit difference E, which

represents the competitive management efficiency.

Appling the competitive management, we’ll take into

consideration that the product price is P3 and changing

the value of the cutting speed v = vct with v = v0, then an

additional profit E will be obtained.

3 Simulations and Discussions

Fig. 2 Econometric model for a turning process and

system: a) cost c; b) time τ; c) profit rate r, where: p1 =

0.0104 Euro/cm2, p2 = 0.0142 Euro/cm2, p3 = 0.0242

Euro/cm2, cτ = 0.45 Euro/min, τsr = 10 min, cs = 20, cmat

= 0.008 Euro/cm3, ce = 0.23 Euro/Kwh, Ke = 150

wh/min, KM = 5400000 min1/3cm, CM = 100000 Euro, s

= 0.15 mm/rot, t = 3 mm, α = β = γ =0.5.

By means of relations presented above, an example of

updated econometric model was carried out (Fig. 2).

In figure 2, a it is represented the curve of cost c.

It is important to note that the minimum cost cmin =

0.00978 Euro/cm2 is obtained for the optimum cutting

speed v’op = 84 m/min.

Based on the relation (3), in the figure 2, b it is

represented time τ. The minimum value of time τmin =

0.007 min/cm2, corresponds to a cutting speed v”op =

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DOI: 10.37394/23205.2022.21.10

Daniela Ghelase, Luiza Daschievici

E-ISSN: 2224-2872

Volume 21, 2022

176 m/min.

Figure 2, c presents the curves of the profit rate r

calculated with the relation (4) for three levels of the

price.

As shown in figure 2, c, there is a maximum R0 =

1.8679 Euro/min for the specific price p3 = 0.0242

Euro/cm2 and corresponds to a cutting speed v0 = 136

m/min (optimal operation point). Also, on the diagram,

there are negative values of the profit rate r. The cutting

speeds associated with maximum profit rates are

situated between v’op = 84 m/min and v”op = 176 m/min.

According as the price increases, the maximum of the

profit rate goes to right, as shown in figure 2, c.

On the basis of the econometric model and above

considerations, the comparative numerical study of the

competitive management efficiency reported to the

conventional management was carried.

We have considered a reference case having a cutting

speed v = 84 m/min. As it can see in figure 2, a, the cost

c is minimum for that cutting speed. We may say that,

from the viewpoint of the conventional management,

that cutting speed is even optimum cutting one.

Analyzing figure 2, c and table 1, it can observe that

at cutting speed v = 84 m/min, for specific price p1 =

0.0104 Euro/min, the profit rate r1 = 0.068646 Euro/min

is very closed to maximum profit rate (0.069486

Euro/min), the difference E1 is approximate null, but the

profit rate is different of the maximum one for the

specific prices p2 = 0.0142 Euro/min and p3 = 0.0242

Euro/min.

In those cases, the cutting speed can not be considered

as being optimum one.

The competitive management efficiency is given by

the differences E1, E2, E3 (Fig. 2).

Table 1

v r

[m/min]

[Euro/min]

-0.17255

0.02397

0.541124

-0.14798

0.064659

0.624231

-0.12445

0.104101

0.705548

44 -0.10203 0.142205 0.784925

-0.04813

0.236645

0.986052

-0.00355

0.319586

1.169942

0.04438

0.420172

1.409101

84 0.068646 0.490351 1.600102

0.069486

0.529687 1.740743

116

0.023281

0.530565

1.865522

136 -0.07147 0.462569 1.867933

176

-0.34678

0.192472

1.611568

On the basis of the data from the table 2, in figure 3 is

represented the curve of the competitive management

efficiency depending on the specific price p. Six

product prices were considered in simulations (column

1 of the table 2) and the corresponding profit rates

(columns 2, 3).

Table 2

[Euro/cm

]

[Euro/min]

max

[Euro/min]

E=r

max

-r

[Euro/min]

E/r

[%]

0.0104

0.068646

0.069486

0.000840

1.22

0.0142

0.490351

0.530565

0.040214

8.20

0.0242

1.600102

1.867933

0.267831

16.73

0.0342

2.709853

3.273298

0.563445

20.79

0.0442

3.819604

4.678662

0.859058

22.49

0.0542

4.929355

6.084027

1.154672

23.42

Fig. 3 Competitive management efficiency

As may be seen in figure 2, according as the price

increases, the competitive management efficiency

becomes higher. Note that, it can begin from zero.

The management is efficiently, according as the

competitiveness is higher. As seen in figure 3, the

competitive management efficiency can reach 23.4 %.

4 Conclusion

In this paper a numerical study of the competitive

management efficiency by comparison to the

conventional management was achieved.

In the case of the products which have’t market

success, the decrease of the cost is the most efficient

method, appling the conventional management.

If the market success of the products is important,

then the cost minimization don’t provide maximum

efficiency. In this case, the increase of the productivity

is more important then the decrease of the cost.

According as the market success of the products

increases, the competitive management efficiency

increases continuously. So, in the simulation case

presented in this paper, management efficiency reaches

25%.

WSEAS TRANSACTIONS on COMPUTERS

DOI: 10.37394/23205.2022.21.10

Daniela Ghelase, Luiza Daschievici

E-ISSN: 2224-2872

Volume 21, 2022

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WSEAS TRANSACTIONS on COMPUTERS

DOI: 10.37394/23205.2022.21.10

Daniela Ghelase, Luiza Daschievici

E-ISSN: 2224-2872

Volume 21, 2022