DAF Trucks is based in Oevel, in Westerlo, Belgium. It was established in 1966, and the size and facilities in the manufacturing plant have been developed gradually over the past 50 or so years with the aim of increasing production, efficiency, and responsiveness to customer needs. The company produced its 2 millionth axle in 2011 and its millionth cab in 2014. In 2015, the company completed the construction of a new cab paint shop, making it arguably the most technologically advanced facility of its kind in Europe and ensuring that production could be increased by 50 percent.

All of the cabs and axles are manufactured sequentially so that they can be delivered to the Eindhoven (Holland) assembly plant or to the UK-based Leyland Trucks facility exactly when they are needed and in the correct sequence to match customer orders. All of these companies are now owned by the US-based PACCAR corporation and use a common PACCAR Production System. This system recognizes that it is the employees on the production lines who know most about their job roles. The employees are encouraged to come up with ideas to complete tasks in a more intelligent and efficient manner. 

DAF only ever produces cabs, axles, and finished trucks once they have been sold; in other words, they follow a build-to-order, just-in-time production strategy. When a customer confirms the order for a truck, DAF gives the customer a delivery date. This is to allow the customer to make all necessary preparations for the arrival of the truck on that date. DAF refers to this as delivery reliability. DAF needs to  ensure that production runs smoothly and quickly, so this incorporates a short supply and production chain. The physical speed of the production is achieved by having a large number of small deliveries of components from suppliers and frequent deliveries of cabs to the truck assembly plants in Holland or the United Kingdom. This is achieved through methods such as EDI and direct-order entry.

1. How would you evaluate DAF’s layout strategy? Be specific.
2. What potential challenges do you see for DAF as it continues to scale up their production levels? How would you recommend overcoming these challenges?
3. If you were DAF, what other changes to the production would you try to implement?